B-1-1

HHF North Carolina March 9, 2020

SERVICE SCHEDULE B-1

North Carolina Housing Finance Agency’s 

Mortgage Payment Program (MPP-1) 

Summary Guidelines

1. Program Overview Because unemployed homeowners are not eligible for most 

loss mitigation programs, NCHFA proposes to use a majority 

of our first round HFA Hardest Hit Funds (HHF) to create the 

Mortgage Payment Program (MPP-1).

This program will provide loans to unemployed homeowners 

and others who, through no fault of their own, are financially 

unable to make their mortgage payments and are in danger of 

losing their homes to foreclosure.

Loan proceeds will be used to pay mortgage and mortgagerelated expenses (i.e. property taxes, homeowner insurance, 

homeowner dues) for eligible homeowners.

2. Program Goals To assist 10,372 homeowners. The following types of 

assistance will be provided:

Job Search Assistance

To help homeowners while they look for a new job or have 

experienced a temporary reduction in income.

Job Training Assistance

To help homeowners while they complete a job 

training/education program to help secure a new job including 

veterans who are honorably or medically discharged from the 

military.

Reinstatement Only or One-time Assistance

To help homeowners who can resume future payments but 

need help to bring their mortgage current.

3. Target Population/ 

Areas

Homeowners who are unemployed, underemployed, suffered 

another temporary hardship, and/or are able to resume future 

payments but need help bringing their mortgage current.

This Program will be available in all North Carolina counties.

4. Program Funds 

(Excluding

Not applicable. Program Funds may be disbursed under any 

program included in Schedule B.
B-1-2

Administrative 

Expenses)

5. Borrower Eligibility 

Criteria

Homeowners who are unemployed, underemployed, or have 

suffered another eligible temporary hardship, who, through no 

fault of their own, are unable to make their mortgage payments 

and are at risk of a foreclosure. Homeowners will be required 

to provide a financial hardship affidavit with appropriate 

documentation on the cause of their hardship, per program 

guidelines.

Homeowners who are delinquent because of a prior job loss or 

other program eligible hardship but who can resume future 

payments without additional assistance.

Satisfactory mortgage payment history.

All principal, interest, taxes, homeowner insurance, mortgage 

insurance, homeowner association dues, and the cost of utilities 

> 25% of household income after job loss/loss of income.

Borrowers must meet program underwriting criteria.

Eligibility for program assistance will be determined 

primarily by participating foreclosure prevention partners.

Funds will be allocated on a first come/first ready, first served 

basis.

6. Property/Loan 

Eligibility Criteria

Existing single-family homes, duplexes or condominiums 

(attached or detached) including manufactured homes on 

foundations permanently affixed to real estate owned by the 

borrower.

North Carolina owner-occupied, primary residences only.

7. Program Exclusions Total Unpaid Principal Balances > $300,000.

Manufactured homes not considered real property. 

Non-legal U.S. resident.

8. Structure of 

Assistance

10 year, 0% interest, non-recourse, deferred-payment 

forgivable subordinate loan. A forgiveness clause will reduce 

the loan amount by 20% each year beginning on the six (6)

year anniversary of the closing date. The balance of the loan
B-1-3

will be forgiven 20% per year annually thereafter. At the end 

of the 10 years, the note will be considered satisfied, and 

NCHFA will release the lien securing the note.

All or a portion of the unforgiven loan funds are due and 

payable to NCHFA if the home is sold, refinanced or no 

longer owner occupied (unless otherwise prohibited under 

applicable federal law). Proceeds from a sale or refinance will 

be used to pay off any liens recorded prior to NCHFA’s lien, 

and usual and customary closing costs. Loans are repayable 

only from proceeds to the borrower from a sale or refinance. 

If the property is sold or refinanced and has not increased in 

equity to the degree necessary to repay the loan, all or a 

portion of the loan remaining unpaid after the proceeds are 

applied will be forgiven.

NCHFA reserves the right to subordinate lien position in 

accordance with program guidelines. All deferred,subordinate 

mortgages will be evidenced by a promissory note and 

secured by a deed of trust on the property.

Any funds returned according to established program 

guidelines will be recaptured and used to assist additional 

homeowners in accordance with the Agreement.

9. Per Household 

Assistance

The average loan amount will be $20,000 per borrower.

Effective for all loans closed after January 31, 2012: 

Maximum assistance up to $36,000 and not to exceed 36 

months per household.

10. Duration of 

Assistance

Effective for all applications submitted on or after August 1, 

2018:

 Up to 18 months for those in job training/education program.

 Up to 18 months for those in a job search.

Effective for all applications submitted prior to August 1, 2018:

 Up to 36 months for those in a job training/education 

program

 Up to 18 months for those in a job search program.

11. Estimated Number of 

Participating 

Households

10,394 homeowners.

Estimated number served based on average loan amount of

$20,000 per homeowner.
B-1-4

12. Program Inception/ 

Duration

Program began October 18, 2010. Recaptured funds shall be 

recycled and used in the program in accordance with the 

Agreement.

13. Program Interactions 

with Other Programs 

(e.g. other HFA 

programs)

Borrowers can access more than one of our HHF programs, if 

needed and appropriate. For example, a borrower can receive 

MPP-1 assistance while they look for a new job and then 

receive Second Mortgage Refinance Program or Modification 

Enabling Pilot Program assistance once they can resume future 

payments without additional assistance. Homeowners who 

continue to struggle with unaffordable mortgage payments 

may be eligible to participate in the Principal Reduction 

Recast/Lien Extinguishment for Unaffordable Mortgages 

Program.

Maximum total assistance amount per household is $75,000 if 

participating in multiple HHF programs.

14. Program Interactions 

with HAMP

Prior to the conclusion of Making Home Affordable programs, 

eligible homeowners could access Federal programs including 

HAMP and HAMP UP. Homeowners could utilize HAMP UP 

before or after the MPP-1 Program.

15. Program Leverage 

with Other Financial 

Resources

None
B-2-1

SERVICE SCHEDULE B-2

North Carolina Housing Finance Agency’s 

Mortgage Payment Program (MPP-2) 

Summary Guidelines

1. Program Overview The North Carolina Housing Finance Agency (NCHFA) 

Mortgage Payment Program (MPP-2) will provide loans to 

unemployed or substantially underemployed homeowners who, 

through no fault of their own, are financially unable to make their 

mortgage payments and are in danger of losing their homes to 

foreclosure.

Loan proceeds will be used to pay all mortgage and mortgagerelated expenses (i.e. property taxes, homeowner insurance, 

mortgage insurance and homeowner association dues), including 

subordinate mortgage loans, until the homeowner secures 

employment or completes training for a new career.

2. Program Goals To assist 13,869 homeowners. The following types of assistance 

will be provided:

Job Search Assistance

To help homeowners while they look for a new job.

Job Training Assistance

To help homeowners while they complete a job 

training/education program to help secure a new job.

Reinstatement Only or One-time Assistance

To help homeowners who have found a new job but need help to 

bring their mortgage current due to arrearages accumulated 

during a period of unemployment.

3. Target

Population/Areas

Homeowners who are unemployed, or substantially 

underemployed, and/or reemployed but need help bringing their 

mortgage current.

This Program will be available in all North Carolina counties.

4. Program Funds 

(Excluding 

Administrative 

Expenses)

Not applicable. Program Funds may be disbursed under any 

program included in Schedule B.

5. Borrower Eligibility 

Criteria

Unemployed or substantially underemployed homeowners who,

through no fault of their own, are unable to make their mortgage
B-2-2

payments and are at risk of a foreclosure. Homeowners will be 

required to provide a financial hardship affidavit with appropriate 

documentation of unemployment, per program guidelines.

Homeowners who are delinquent due to arrearages accumulated 

during a period of unemployment but who can resume future 

payments without additional assistance.

Satisfactory mortgage payment history.

All principal, interest, taxes, homeowner insurance, mortgage 

insurance, homeowner association dues, and the cost of utilities > 

25% of household income after job loss/loss of income.

Borrowers must meet program underwriting criteria. 

Eligibility for program assistance will be determined primarily 

by participating foreclosure prevention partners.

Funds will be allocated on a first come/first ready, first served 

basis.

6. Property/Loan 

Eligibility Criteria

Existing single-family homes, duplexes or condominiums 

(attached or detached) including manufactured homes on 

foundations permanently affixed to real estate owned by the 

borrower.

North Carolina owner-occupied, primary residences only.

7. Program Exclusions Total Unpaid Principal Balances > $300,000. 

Manufactured homes not considered real property.

Non-legal U.S. resident.

8. Structure of 

Assistance

10 year, 0% interest, non-recourse, deferred-payment, 

forgivable, subordinate loan. A forgiveness clause will reduce 

the loan amount by 20% each year beginning on the six (6) year 

anniversary of the closing date. The balance of the loan will be 

forgiven 20% per year annually thereafter. The remainder of the 

loan will be forgiven 20% per year annually thereafter. At the 

end of the 10 years, the note will be considered satisfied, and 

NCHFA will release the lien securing the note.

All or a portion of the unforgiven loan funds are due and 

payable to NCHFA if the home is sold, refinanced or no longer 

owner occupied (unless otherwise prohibited under applicable
B-2-3

federal law). Proceeds from a sale or refinance will be used to 

pay off any liens recorded prior to NCHFA’s lien, and usual and 

customary closing costs. Loans are repayable only from 

proceeds to the borrower from a sale or refinance. If the 

property is sold or refinanced and has not increased in equity to 

the degree necessary to repay the loan, all or a portion of the 

loan remaining unpaid after the proceeds are applied will be 

forgiven.

NCHFA reserves the right to subordinate lien position in 

accordance with program guidelines. All deferred, subordinate 

mortgages will be evidenced by a promissory note and secured 

by a deed of trust on the property.

Any funds returned according to established program guidelines 

will be recaptured and used to assist additional homeowners in 

accordance with the Agreement.

9. Per Household 

Assistance

The average loan amount is expected to be $20,000 per 

borrower.

Effective for all loans closed after January 31, 2012:

Maximum assistance up to $36,000 and not to exceed 36 months 

per household.

10. Duration of Assistance Effective for all applications submitted on or after August 1, 

2018:

Up to 18 months for those in job training/education program. 

Up to 18 months for those in a job search.

Effective for all applications submitted prior to August 1, 2018:

 Up to 36 months for those in a job training/education 

program

 Up to 18 months for those in a job search program.

11. Estimated Number of 

Participating 

Households

13,869 homeowners.

Estimated number served based on average loan amount of

$20,000 per homeowner.

12. Program Inception/ 

Duration

Program began November 7, 2011. Recaptured funds shall be 

recycled and used in the program in accordance with the 

Agreement.

13. Program Interaction 

with Other HFA 

Programs

Borrowers can access more than one of our HHF programs, if

needed and appropriate. For example, a borrower can receive MPP2 assistance while they look for a new job and then receive
B-2-4

Second Mortgage Refinance Program or Modification Enabling 

Pilot Program assistance once they secure a new job.

Homeowners who continue to struggle with unaffordable 

mortgage payments may be eligible to participate in the 

Principal Reduction Recast/Lien Extinguishment for 

Unaffordable Mortgages Program.

Maximum total assistance amount per household is $75,000 if 

participating in multiple HHF programs.

14. Program Interaction 

with HAMP

Prior to the conclusion of Making Home Affordable programs, 

eligible homeowners could access Federal programs including 

HAMP and HAMP UP. Homeowners could utilize HAMP UP 

before or after the MPP-2 Program.

15. Program Leverage 

with Other Financial 

Resources

None
B-3-1

SERVICE SCHEDULE B-3

North Carolina Housing Finance Agency’s 

Second Mortgage Refinance Program (SMRP) 

Summary Guidelines

1. Program Overview Government officials have estimated about 50% of troubled 

borrowers have a second mortgage. Homeowners are frequently 

unable to make their second mortgage payment and are in danger 

of losing their homes to foreclosure.

The Second Mortgage Refinance Program (SMRP) will 

benefit homeowners with second mortgages who, through no 

fault of their own, are financially unable to make their mortgage 

payment because of a prior job loss, reduced income, or other 

program-eligible hardship.

This program will provide a more affordable housing expense 

by refinancing the second mortgage to a 0%-interest, nonrecourse, deferred-payment subordinate loan.

2. Program Goals To assist 258 homeowners facing foreclosure in all 100 North 

Carolina counties.

The goal of this program is to extinguish the existing second 

mortgage and replace it with a 0%-interest, non-recourse, 

deferred-payment subordinate loan. This will reduce the 

borrower’s monthly mortgage payment and in some instances 

may expedite movement of a qualified applicant into a HAMP 

first mortgage modification process.

3. Target Population/ 

Areas

Our target population will be homeowners facing foreclosure in 

all 100 North Carolina counties who have a 1st and 2nd mortgage 

whereby the total mortgage payment is causing the home to be 

unaffordable under program guidelines.

4. Program Funds 

(Excluding 

Administrative 

Expenses)

Not applicable. Program Funds may be disbursed under any 

program included in Schedule B.

5. Borrower Eligibility 

Criteria

Eligible homeowners must be those facing foreclosure due to 

recent unemployment, loss of income, reduction in income, or 

other demonstrated financial hardships. Homeowners will be 

required to provide a financial hardship affidavit with

appropriate documentation on the cause of the hardship.

Satisfactory mortgage payment history.
B-3-2

All principal, interest, taxes, homeowner insurance, mortgage 

insurance, homeowner association dues, and the cost of 

utilities > 25% of household income after job loss/loss of 

income.

Extinguishment of second loan with SMRP will only occur if 

the first mortgage loan is current.

Borrowers must meet program underwriting criteria.

Funds will be allocated on a first come/first ready, first served 

basis.

6. Property/Loan 

Eligibility Criteria

Existing single-family homes, duplexes or condominiums 

(attached or detached) including manufactured homes on 

foundations permanently affixed to real estate owned by the 

borrower.

North Carolina owner-occupied, primary residences only.

7. Program Exclusions Total Unpaid Principal Balances > $300,000.

Manufactured homes not considered real property.

Second Mortgage Refinance will not be available to a 

homeowner that is eligible or participating in 2MP.

Non-legal U.S. resident.

8. Structure of Assistance 30 year, 0%-interest, non-recourse, deferred-payment 

subordinate loan.

All loan funds are due and payable to NCHFA if the home is 

sold, refinanced or no longer owner occupied (unless otherwise 

prohibited under applicable federal law). Proceeds from a sale 

or refinance will be used to pay off any liens recorded prior to 

NCHFA’s lien, and usual and customary closing costs. Loans 

are repayable only from proceeds to the borrower from a sale or 

refinance. If the property is sold or refinanced and has not 

increased in equity to the degree necessary to repay the loan, all 

or a portion of the loan remaining unpaid after the proceeds are 

applied will be forgiven.

NCHFA reserves the right to subordinate lien position in 

accordance with program guidelines. All deferred, subordinate
B-3-3

mortgages will be evidenced by a promissory note and secured 

by a deed of trust on the property.

Any funds returned according to established program guidelines 

will be recaptured and used to assist additional homeowners in 

accordance with the Agreement.

9. Per Household 

Assistance

Under this program, eligible borrowers may receive up to

$50,000 plus all related fees as a subordinate loan.

If $50,000 is insufficient to extinguish the second mortgage, the 

Agency will only offer these funds if the second lien holder is 

willing to take the amount supplied to extinguish the debt 

without a deficiency judgment.

The average loan amount is expected to be $22,900 per borrower.

10. Duration of Assistance Assistance under SMRP is a one-time payment.

11. Estimated Number of 

Participating 

Households

258 homeowners.

12. Program Inception/ 

Duration

The program began June 6, 2011. Recaptured funds shall be 

recycled and used in the program in accordance with the 

Agreement.

13. Program Interactions 

with Other Programs 

(e.g. other HFA 

programs)

Homeowners who participate in the Mortgage Payment 

Program (MPP) may be eligible to participate in SMRP if the 

borrower has the ability to resume first mortgage payment yet 

second mortgage payment remains unaffordable. Eligible 

delinquent borrowers will be brought current with MPP OneTime Reinstatement if necessary and then are eligible for 

SMRP. Homeowners struggling with unaffordable mortgage 

payments may be eligible to participate in the Principal 

Reduction Recast/Lien Extinguishment for Unaffordable 

Mortgages Program and SMRP program to achieve an 

affordable mortgage payment.

Maximum total assistance amount per household is $75,000 if 

participating in multiple HHF programs.

14. Program Interactions 

with HAMP

Extinguishing the second mortgage may expedite movement of 

qualified applicants into a HAMP first modification process.
B-3-4

15. Program Leverage 

with Other Financial 

Resources

If $50,000 is insufficient to extinguish the second mortgage, the 

Agency will only offer these funds if the second lien holder is 

willing to take the amount supplied to extinguish the debt 

without a deficiency judgment.
B-4-1

SERVICE SCHEDULE B-4

North Carolina Housing Finance Agency's 

Modification Enabling Pilot Program (MEP) 

Summary Guidelines

1. Program Overview The Modification Enabling Pilot Program (“MEP”) is 

being administered by the North Carolina Housing 

Finance Agency (“NCHFA”) in partnership with National 

Community Capital II LLC (“NCC”). Funding under this 

Pilot Program is designed to provide directed assistance to 

eligible borrowers under the NCC ReStart Program with 

the intent to permanently modify and reduce the 

borrower’s loan amount to an affordable level to achieve a 

monthly total housing payment that does not exceed 35% 

of the borrower’s monthly income. Borrowers meeting 

the eligibility requirements described in Section 5 below 

may be eligible for MEP assistance through the NCC 

ReStart Program.

Eligible loan pools under this MEP Pilot Program include 

loans in North Carolina sold under the Department of 

Housing and Urban Development’s (“HUD”) Distressed 

Asset Stabilization Program (“DASP”) and other loan 

sales that are purchased by NCC.

The NCHFA agreement with the NCC ReStart Program 

will be used to enable and facilitate permanent 

modifications by advancing a forgivable loan to eligible 

borrowers in an amount not to exceed $36,000 to enable a 

loan modification to occur immediately. MEP funding 

may not be used to reduce the principal balance of an 

eligible borrower’s mortgage loan below 100% of the 

current market value of the property. However, the NCC 

ReStart Program may reduce the principal amount of an 

eligible borrower’s mortgage loan below 100% of the 

property’s current market value to achieve a permanently 

modified mortgage loan as long as it uses its own capital 

and not MEP funding. As the funding formula for the

maximum amount MEP assistance expressly states a floor 

of 100% of the property’s current market value the MEP 

assures that its assistance is limited to funding principal 

reduction for eligible borrowers only down to 100% of the 

property’s current market value.
B-4-2

Consistent with the terms of MEP, the NCC ReStart 

Program may permanently modify and reduce the existing 

first mortgage loan to an amount whose net present value 

does not exceed the lesser of:

 A loan amount equal to 100% of the current 

market value of the property; or

 A loan amount with a net present value (using a 30 

year amortization at an interest rate equal to 300 

basis points above the 30 year FHA rate as quoted 

by Wells Fargo Mortgage) that results in a 

monthly total housing payment that does not 

exceed 35% of the borrowers adjusted gross 

monthly income.

In order to make the mortgage payments affordable to the 

borrower, the MEP forgivable second mortgage loan will 

be made to eligible borrowers for up to $36,000 to fund a 

modification of the mortgage loan amount to an amount 

equal to 100% of the current market value (or as close to 

100% of the current market value as the $36,000 in MEP 

assistance will permit and as long as the reduced mortgage 

loan amount results in a total housing payment not greater 

than 35% of the borrower’s adjusted gross monthly 

income).

There is a required dollar-for-dollar private capital match 

under the NCC Restart Program. As a result of this 

private capital match, the final amount of MEP assistance 

will be determined by subtracting the Current Market 

Value of the property from borrower’s Unpaid Principal 

Balance (UPB) times 50% or $36,000, whichever is less.

The structure of the MEP assistance is described in 

Section 8.

2. Program Goals The central goal of MEP is to help homeowners avoid 

foreclosure by permanently modifying a borrower’s 

primary mortgage to achieve a monthly total housing 

payment that does not exceed 35% of the borrower’s 

adjusted gross monthly income.

3. Target 

Population/Areas

The targeted populations are households whose loans 

NCC is able to acquire under the HUD DASP.
B-4-3

4. Program Funds 

(Excluding 

Administrative Expenses)

Not applicable. Program Funds may be disbursed under 

any program included in Schedule B.

5. Borrower Eligibility 

Criteria

Eligible Borrowers under MEP must meet the following 

criteria:

 Must be a legal U.S. Citizen or lawful permanent 

resident

 Demonstrate an ability to maintain a financial 

obligation for the home based upon an affordable 

mortgage with a total monthly housing payment 

equal to or less than 35% of their gross monthly 

income.

 Must meet the LTV requirements described in this 

Section.

Borrowers with current UPBs equal to or greater than 

105% of the property’s current market value are eligible 

for MEP assistance if they meet one of the following 

financial hardships and provide a financial hardship 

affidavit. Eligible financial hardships include reduced 

income due to:

 Changes in employment

 Medical condition(s)

 Divorce

 Death

Borrowers who are unable to document any of these 

financial hardships may be eligible for MEP assistance if 

their current UPB is equal to or greater than 125% of the 

property’s current market value.

6. Property/Loan 

Eligibility Criteria

 Property must be the borrowers principal residence, 

located in North Carolina and may not be abandoned, 

vacant or condemned.

 The property must be a single family home, duplex, a 

condominium, a townhome, a manufactured or mobile 

home on foundation permanently affixed to real estate 

owned by the mortgagor, or a 2-4 family dwelling unit 

of which one unit is occupied by the mortgagor as 

their principal residence that is owner-occupied with a 

UPB equal to or less than $300,000.
B-4-4

 Mortgage must be a distressed loan with a UPB that 

equals or exceeds the required percentages described 

in Section 5 above. Market value will be established 

by a FIRREA-compliant appraisal completed by an 

appraiser licensed and in good standing under the 

North Carolina statutes for NCC at the time the 

appraisal is performed.

7. Program Exclusions Borrowers whose current loan-to-value is less than 105% 

of the property’s current market value.

Borrowers who are in an active Chapter 7 bankruptcy.

8. Structure of Assistance 10 year, 0% interest, non-recourse, deferred-payment 

forgivable subordinate loan. A forgiveness clause will 

reduce the loan amount by 20% each year beginning on 

the six (6) year anniversary of the closing date. The 

balance of the loan will be forgiven 20% per year 

annually thereafter. At the end of the 10 years the note 

will be considered satisfied and NCHFA will release the 

lien securing the note.

All or a portion of the unforgiven loan funds are due and 

payable to NCHFA if the home is sold, refinanced or no

longer owner occupied (unless otherwise prohibited under 

applicable federal law). Proceeds from a sale or refinance 

will be used to pay off any liens recorded prior to 

NCHFA’s lien, and usual and customary closing costs.

Loans are repayable only from proceeds to the borrower 

from a sale or refinance. If the property is sold or 

refinanced and has not increased in equity to the degree 

necessary to repay the loan, all or a portion of the loan 

remaining unpaid after the proceeds are applied will be 

forgiven.

NCHFA reserves the right to subordinate lien position in 

accordance with program guidelines. All deferred, 

subordinate mortgages will be evidenced by a promissory 

note and secured by a deed of trust on the property.

Any funds returned according to established program 

guidelines will be recaptured and used to assist additional 

homeowners in accordance with the Agreement.
B-4-5

9. Per Household 

Assistance

Under this program, eligible borrowers may receive up to

$36,000. The estimated Median Amount of Assistance is

$18,500.

10. Duration of 

Assistance

Assistance under MEP is a one-time payment on behalf of 

qualified applicants of NCC ReStart Program.

11. Estimated Number of 

Participating Households

It is anticipated that the MEP will assist 49 households in 

avoiding imminent foreclosures.

12. Program 

Inception/Duration

The program will be available approximately in January 

2014 and is anticipated to run for a two-year period of 

time. Recaptured funds shall be recycled and used in the 

program in accordance with the Agreement.

13. Program Interactions 

with Other Programs 

(e.g. other HFA 

programs)

MEP will interact with NCHFA’s MPP-1, MPP-2, and 

SMRP in the following manner. At the time NCC 

assesses the borrower for eligibility under MEP, if it finds 

that the borrower is not eligible for MEP it will then 

assess whether the borrower is eligible for MPP-1, MPP-2 

and/or SMRP assistance. If the borrower is eligible for 

MPP-1, MPP-2 and/or SMRP, the application and 

approval process will be completed in the manner 

prescribed by NCHFA.

Homeowners who have participated in the Mortgage 

Payment Programs may be eligible to participate in MEP 

if the borrower has become reemployed or secured other 

source(s) of fixed income and has demonstrated a 

qualifying hardship.

Maximum total assistance amount per household is

$75,000 if participating in multiple HHF programs.

14. Program Interactions 

with HAMP

None.
B-4-6

15. Program Leverage 

with Other Financial 

Resources

As the NCC ReStart Program will reduce the existing first 

mortgage loan in accordance with the MEP there will be a 

minimum 1:1 private capital leveraged match. However, 

as the NCC ReStart Program will likely fund with private 

capital additional principal reductions for eligible 

borrowers below 100% of the property’s current market 

value in order to achieve a principal reduction it is 

expected that the leveraged match of private funds to MEP 

will be closer to 3 to 1. Lender match amounts shall be 

documented at the time of closing of the modification.
B-5-1

SERVICE SCHEDULE B-5

North Carolina Housing Finance Agency's

Principal Reduction Recast/Lien Extinguishment for Unaffordable Mortgages (PRRLE) 

Program

Summary Guidelines

1. Program Overview The Principal Reduction Recast/Lien Extinguishment for 

Unaffordable Mortgages (PRRLE) will provide eligible 

homeowners a principal reduction and re-amortization (recast) 

of the remaining principal balance or a full lien extinguishment. 

As applicable, PRRLE will also be used to pay all delinquent 

first mortgage and mortgage-related expenses (i.e. property 

taxes, homeowner insurance, homeowner dues) in conjunction 

with the principal reduction and recast or full lien 

extinguishment. Eligible homeowners may receive no more 

than $50,000 to be applied toward principal reduction and recast 

or to a lien extinguishment. Eligible homeowners with a 

delinquent first mortgage may be brought current up to $36,000 

with PRRLE funds not to exceed total assistance of $75,000. 

The program will provide the homeowner an affordable and 

long term sustainable monthly mortgage expense payment.The 

PRRLE program is available to North Carolina homeowners 

who are financially unable to make their mortgage payments 

due to a qualifying hardship event.

2. Program Goals To assist 1,200 homeowners facing foreclosure.

The goal of the program is to decrease the number of home 

owners losing their homes to foreclosure by providing longterm housing payment sustainability. Secondary goals include 

stabilization of neighborhoods and protecting home values of 

surrounding properties.

This program will provide immediate mortgage payment relief 

and stable long term mortgage or mortgage expense payments 

for the homeowner.

3. Target Population/ Areas Homeowners suffering a program eligible financial hardship, 

as defined in the program guidelines, related to reduction of 

income or other demonstrated financial hardship.

This Program will be available in all North Carolina counties.

4. Program Funds 

(Excluding Administrative 

Expenses)

Not applicable. Program Funds may be disbursed under any 

program included in Schedule B.
B-5-2

5. Borrower Eligibility 

Criteria

Eligible homeowners must be those with program eligible 

financial hardship due to unemployment, loss of income, 

reduction of income, or other demonstrated financial hardships 

through no fault of their own. Homeowners will be required to 

provide a financial hardship affidavit with appropriate 

documentation on the cause of the hardship.

All eligible homeowners must meet the following criteria:

 Satisfactory mortgage payments prior to job loss, loss 

of income, reduction in income or other program 

eligible hardship.

 Homeowner has become re-employed or secured a 

fixed income source.

 Current housing debt-to income ratio > 25%.

 Post assistance monthly housing related expenses 

including principal and interest on all liens attached to 

the property, property taxes, homeowners insurance 

and homeowners association dues ≤ 36% of gross 

monthly household income.

Homeowners eligible to receive a full lien extinguishment 

must meet these additional following criteria:

 Primary income source for household is from a fixed 

income source as defined in the program guidelines.

 Gross household income is equal to or lesser than 

125% of the state median income limit in North 

Carolina.

 Post assistance monthly housing related expenses 

including principal and interest on all liens attached to 

the property, property taxes, homeowners insurance 

and homeowners association dues ≤ 36% of gross 

monthly household income.

Homeowners eligible to receive a principal reduction and 

recast and receiving a fixed income source as primary income 

must meet these additional following criteria:

 Primary income source for household is from a fixed 

income source as defined in the program guidelines.

 Gross household income is equal to or lesser than 

125% of the state median income limit in North 

Carolina.

 Post assistance monthly housing related expenses 

including principal and interest on all liens attached to
B-5-3

the property, property taxes, homeowners insurance 

and homeowners association dues ≤ 36% of gross 

monthly household income.

Homeowners eligible to receive a principal reduction and 

recast and not receiving a fixed income source as primary 

income must meet these additional following criteria:

 Pre-assistance LTV >80%.

 Post assistance LTV >80%.

 Post assistance LTV may go below 80% only if no 

more than $10,000 is provided toward a principal 

reduction in order to achieve a post assistance housing 

debt-to-income ratio between 25% and 36%.

 Post assistance monthly housing ratio target is 25% but 

may not exceed 36%.

 Post assistance monthly housing related expenses 

including principal and interest on all liens attached to 

the property, property taxes, homeowners insurance 

and homeowners association dues > 25% of gross 

monthly household income.

Homeowners must meet program underwriting criteria. Funds 

will be allocated on a first come/approved, first served basis.

6. Property/Loan Eligibility 

Criteria

 Existing single-family homes duplexes, or condominiums 

(attached or detached) including manufactured homes on 

foundations permanently affixed to real estate owned by 

the borrower.

 North Carolina owner-occupied, primary residences only.

 Homeowners with a fixed rate or adjustable rate mortgage.

 Homeowners with interest-only or negative amortization 

mortgage can qualify if the recast results in a fully 

amortizing loan.

7. Program Exclusions Total Unpaid Principal Balances > $300,000. 

Manufactured homes not considered real property.

Non-legal U.S. resident.

8. Structure of Assistance 10 year, 0% interest, non-recourse, deferred-payment 

forgivable subordinate loan. A forgiveness clause will reduce 

the loan amount by 20%. A forgiveness clause will reduce the 

loan amount by 20% each year beginning on the six (6) year

anniversary of the closing date. The balance of the loan will
B-5-4

be forgiven 20% per year annually thereafter. At the end of the 

10 years the note will be considered satisfied and NCHFA will 

release the lien securing the note.

All or a portion of the unforgiven loan funds are due and 

payable to NCHFA if the home is sold, refinanced or no 

longer owner occupied (unless otherwise prohibited under 

applicable federal law). Proceeds from a sale or refinance 

will be used to pay off any liens recorded prior to NCHFA’s 

lien, and usual and customary closing costs. Loans are 

repayable only from proceeds to the borrower from a sale or 

refinance. If the property is sold or refinanced and has not 

increased in equity to the degree necessary to repay the loan, 

all or a portion of the loan remaining unpaid after the 

proceeds are applied will be forgiven. NCHFA reserves the 

right to subordinate lien position in accordance with program 

guidelines. All deferred, subordinate mortgages will be 

evidenced by a promissory note and secured by a deed of 

trust on the property.

Any funds returned according to established program 

guidelines will be recaptured and used to assist additional 

homeowners in accordance with the Agreement.

9. Per Household 

Assistance

Under this program, each eligible borrower may receive no 

more than $75,000 structured as a subordinate loan.

Eligible homeowners that have recovered with a fixed income 

may receive no more than $50,000 to be applied toward a 

principal reduction and recast or to a lien extinguishment. In 

addition, a delinquent first mortgage may be brought current 

with up to $36,000 in PRRLE funds.

Eligible homeowners that have recovered through full time 

reemployment may receive no more than $50,000 to be 

applied toward a principal reduction and recast. The principal 

reduction can be no more than $10,000 when the post 

assistance LTV is less than 80%. In addition, a delinquent 

first mortgage may be brought current with up to $36,000 in 

PRRLE funds.

The average loan amount is expected to be $50,000 per 

borrower.

10. Duration of Assistance Assistance under PRRLE is a one-time payment to the 

servicer.
B-5-5

11. Estimated Number of 

Participating Households

We anticipate approximately 1,200 homeowners will be 

helped.

Program will be piloted with select servicers, NCHFA 

portfolio and existing HHF portfolio. Program may be 

expanded to other servicers if pilot is successful and funds are 

available.

12. Program Inception/ 

Duration

The program will be available in July 2015. Recaptured funds 

shall be recycled and used in the program in accordance with 

the Agreement.

13. Program Interactions 

with Other Programs (e.g. 

other HFA programs)

Homeowners who have participated in the Mortgage Payment 

Program (MPP) or the Second Mortgage Refinance Program 

(SMRP) may be eligible to participate in PRRLE if the 

borrower has become reemployed or secured other source(s) of 

fixed income and has demonstrated a qualifying hardship.

Maximum total assistance amount per household is $75,000 if 

participating in multiple HHF programs.

14. Program Interactions 

with HAMP

Lien Extinguishment:

 No HAMP interaction

Principal Reduction and Recast:

 Prior to the conclusion of Making Home Affordable 

programs, eligible homeowners could access Federal 

programs including HAMP and HAMP UP. 

Homeowners could have utilized HAMP before 

PRRLE.

15. Program Leverage with 

Other Financial Resources

We will not require investors to match the contributions that 

are made with the Hardest Hit Funds for the Principal 

Reduction Recast/Lien Extinguishment Program.
B-6-1

SERVICE SCHEDULE B-6

North Carolina Housing Finance Agency’s 

Down Payment Assistance (DPA) Program 

Summary Guidelines

1. Program Overview The Down Payment Assistance (DPA) Program will provide an 

incentive to qualified homebuyers to purchase a primary residence 

in targeted areas in North Carolina. Providing incentives to 

qualified homebuyers in housing markets that have been hardest 

hit by serious delinquency, negative equity, distressed sales, and 

foreclosures will strengthen demand in those areas, stabilize 

housing prices and prevent future foreclosures. This program will 

initially be offered as a pilot that includes five North Carolina 

counties.

2. Program Goals The goal of the DPA Program is to prevent future foreclosures by 

assisting with the stabilization of housing prices in targeted areas. 

NCHFA will identify meaningful indicators that will enable them 

to track and quantify the DPA Program’s impact in the targeted 

areas.

3. Target Population/Areas Targeted areas are the following counties: Johnston, Mecklenburg, 

Guilford, Cumberland, Cabarrus (“Targeted Area”). For these five 

counties, NCHFA evaluated five housing market distress indicators 

across all 100 North Carolina counties—seriously delinquent 

mortgage loans, negative equity, short sales, REO sales, and 

foreclosures—as well as loan origination volume for the NCHFA’s

N.C. Home Advantage Mortgage program. Each Targeted Area 

county contains at least four zip codes that exceeded the statewide 

rate in at least four out of the five distressed housing market 

indicators, and a minimum threshold origination volume was 

achieved in these counties from January 1, 2014 through March 31, 

2015.

4. Program Funds 

(Excluding Administrative 

Expenses)

Not applicable. Program Funds may be disbursed under any 

program included in Schedule B.
B-6-2

5. Borrower Eligibility 

Criteria

Eligible borrowers must qualify for and meet all requirements of a

N.C. Home Advantage Mortgage, with an additional requirement 

of meeting the Mortgage Credit Certificate income and sales price 

limits. Allowable first mortgage loans are 30-year, fixed-rate loans 

from the Federal Housing Administration (FHA), U.S. Department 

of Veterans Affairs (VA), U.S. Department of Agriculture – Rural 

Development (RD), Fannie Mae and Freddie Mac. Eligible 

borrowers must also meet the following criteria:

 Must meet income and sales price limits in the Mortgage 

Credit Certificate program, which reflect income limits 

under IRC Section 143(f)(1). The area median income 

(AMI) for borrowers varies depending on county and 

family size, but in no instance do the limits exceed 140% 

of AMI.

 Must be First-Time Homebuyers. For purposes of the DPA 

Program, a First-Time Homebuyer is someone who has not 

had an ownership interest in their primary residence in the 

past three years, unless qualifying under a Veteran’s 

Exception or purchasing a home in a Federally Designated 

Targeted Area as specified in the DPA Program Guide.

 Must complete a pre-purchase homebuyer education 

course.

 Must be legal U.S. citizens or lawful permanent residents 

or otherwise meet the applicable Agency (FHA, VA,

USDA-RD) or GSE (Fannie Mae or Freddie Mac) 

requirements.

 Borrowers must be able to provide a Dodd-Frank 

affidavit as specified in the DPA Program Guide.

 Borrowers must be credit-worthy and meet minimum 

FICO scores, and have a maximum debt-to-income (DTI) 

ratio no greater than 45%, as specified in the DPA 

Program Guide.
B-6-3

6. Property/Loan 

Eligibility Criteria

 The property must be a single-family home, a condominium 

unit, a townhome, or a two-four family dwelling unit of which 

one unit is to be occupied by the mortgagor as his or her 

principal residence.

 Must be the borrower’s primary residence.

 Property must be located in a Targeted Area.

 Meet all applicable DPA Program, Ginnie Mae (FHA, VA, 

USDA-RD) or GSE (Fannie Mae & Freddie Mac) 

underwriting guidelines.

 Property must be existing construction, not new construction.

 Property must meet the MCC Program purchase price limits 

as established in the DPA Program Guide.

7. Program Exclusions  Borrowers, properties and loans not meeting N.C. Home 

Advantage Mortgage program eligibility requirements as 

specified in the DPA Program Guide or GSE underwriting 

criteria.

 Dodd-Frank exclusion for having been convicted of a 

mortgage-related felony in the past ten years.
B-6-4

8. Structure of Assistance 5 year, 0% interest, non-recourse, deferred-payment forgivable 

subordinate loan. A forgiveness clause will reduce the loan 

amount by 20% a year for every year the borrower stays in the 

home. At the end of the 5 years, the note will be considered 

satisfied and NCHFA will release the lien securing the note.

All or a portion of the unforgiven loan funds are due and payable 

to NCHFA if home is sold, refinanced or no longer owner 

occupied (unless otherwise prohibited under applicable federal 

law). Loans are repayable only from proceeds to the borrower 

from a sale or refinance. If the property is sold or refinanced and 

has not increased in equity to the degree necessary to repay the 

loan, all or a portion of the loan remaining unpaid after the 

proceeds are applied will be forgiven.

NCHFA reserves the right to subordinate lien position in 

accordance with program guidelines. All deferred, subordinate 

mortgages will be evidenced by a promissory note and secured by 

a deed of trust on the property.

Any funds returned according to established program guidelines 

will be recaptured and used to assist additional homeowners in

9. Per Household 

Assistance

$15,000.00

10. Duration of Assistance DPA Program funds will be used to reimburse participating 

lenders who table fund the loan at closing once it is determined 

that all DPA program requirements have been met.

11. Estimated Number of 

Participating Households

It is anticipated that the DPA Program will assist approximately 

3,978 households.

12. Program 

Inception/Duration

The DPA Program will begin in September 2015 and it is projected 

that assistance will be expended through as late as 2021.
B-6-5

13. Program Interactions 

with Other Programs (e.g. 

other HFA programs)

The DPA Program will take advantage of an existing 

infrastructure of participating lenders who are already actively 

originating N.C. Home Advantage Mortgage loans. If the borrower 

has received HHF assistance under any other HHF program, the 

maximum amount of all assistance may not exceed $75,000.

Any borrower receiving funds from the DPA Program will not 

be eligible for other down payment assistance programs offered 

by NCHFA.

14. Program Interactions 

with HAMP

None.

15. Program Leverage 

with Other Financial 

Resources

A borrower who obtains the $15,000 DPA may also be evaluated 

for the Mortgage Credit Certificate Program (MCC) unless the 

first mortgage associated with the DPA is financed with taxexempt bond proceeds. However, they will not be eligible for any 

other down payment assistance offered by NCHFA.
C-1

HHF North Carolina March 9, 2020

Schedule C

Permitted Administrative Expenses

North Carolina

One-time / Start-Up Expenses:

Initial Personnel $216,523.00

Building, Equipment, Technology $101,651.00

Professional Services $3,551.00

Supplies / Miscellaneous $4,764.00

Marketing /Communications

Travel $1,757.00

Website development /Translation

Contingency $0.00

Subtotal $328,246.00

Operating / Administrative 

Expenses:

Salaries $36,798,241.00

Professional Services (Legal, 

Compliance, Audit, Monitoring)

$803,868.00

Travel $90,056.00

Buildings, Leases & Equipment $5,423,672.00

Information Technology &

Communications

$12,115,659.00

Office Supplies/Postage and

Delivery/Subscriptions

$1,100,389.00

Risk Management/ Insurance $226,516.00

Training $682,079.00

Marketing/PR $3,264,686.00

Miscellaneous $399,640.00

Subtotal $60,904,806.00

Transaction Related Expenses:

Recording Fees $351,978.00

Wire Transfer Fees $292,603.00

Counseling Expenses

File Intake

Decision Costs
C-2

Successful File $30,900,629.00

Key Business Partners On-Going $3,029,986.00

Subtotal $34,575,196.00

Grand Total $95,808,248.00

% of Total Award 13.55%

Award Amount $706,938,882.00