Second Amendment to HPA — Alabama 

TAMPA/139512.1

SECOND AMENDMENT TO 

COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT 

and 

HFA PARTICIPATION AGREEMENT 

This Second Amendment to Commitment to Purchase Financial Instrument and HFA 

Participation Agreement (the “Second Amendment”) is entered into as of the date set forth on 

Schedule A attached hereto as the Second Amendment Date (the “Amendment Date”), by and 

among the United States Department of the Treasury (“Treasury”), the undersigned party 

designated as HFA whose description is set forth in Schedule A attached hereto (for 

convenience, a “state housing finance agency” or “HFA”) and the undersigned institution 

designated by HFA to participate in the program described below (“Eligible Entity”). 

Recitals 

WHEREAS, Treasury, HFA and Eligible Entity entered into that certain Commitment to 

Purchase Financial Instrument and HFA Participation Agreement (the “Original HPA”) dated as 

of the Closing Date, as previously amended by that certain First Amendment to Commitment to 

Purchase Financial Instrument and HFA Participation Agreement (the “First Amendment”; and 

together with the Original HPA as amended thereby, the “Current HPA”), dated as of the First 

Amendment Date, all as set forth on Schedule A attached hereto, in connection with Treasury’s 

federal housing program entitled the Housing Finance Agency Innovation Fund for the Hardest 

Hit Housing Markets (the “HHF Program”), which was established pursuant to the Emergency 

Economic Stabilization Act of 2008 (P.L. 110-343), as amended, as the same may be amended 

from time to time (“EESA”); 

WHEREAS, HFA and Eligible Entity submitted a request to Treasury to make certain revisions 

to their Service Schedules and Permitted Expenses and Treasury has agreed to the same; 

WHEREAS, HFA, Eligible Entity and Treasury wish to enter into this Second Amendment to 

document all approved modifications to the Service Schedules and Permitted Expenses; 

Accordingly, in consideration of the representations, warranties, and mutual agreements set forth 

herein and for other good and valuable consideration, the receipt and sufficiency of which are 

hereby acknowledged, Treasury, HFA and Eligible Entity agree as follows. 

Agreement 

1. Amendments

A. Definitions. All references in the Current HPA to the “Agreement” shall mean the 

Current HPA, as further amended by this Second Amendment; and all references in the 

Current HPA to Schedules A, B or C shall mean the Schedules A, B or C attached to this 

Second Amendment. All references herein to the “HPA” shall mean the Current HPA, as 

further amended by this Second Amendment. 
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TAMPA/139512.1

B. Schedule A. Schedule A attached to the Current HPA is hereby deleted in its entirety 

and replaced with Schedule A attached to this Second Amendment. 

C. Schedule B. Schedule B attached to the Current HPA is hereby deleted in its entirety 

and replaced with Schedule B attached to this Second Amendment. 

D. Schedule C. Schedule C attached to the Current HPA is hereby deleted in its entirety 

and replaced with Schedule C attached to this Second Amendment. 

2. Representations, Warranties and Covenants

A. HFA and Eligible Entity. HFA and Eligible Entity, each for itself, make the 

following representations, warranties and covenants to Treasury and the truth and accuracy 

of such representations and warranties and compliance with and performance of such 

covenants are continuing obligations of HFA and Eligible Entity, each as to itself. In the 

event that any of the representations or warranties made herein cease to be true and correct or 

HFA or Eligible Entity breaches any of its covenants made herein, HFA or Eligible Entity, as 

the case may be, agrees to notify Treasury immediately and the same shall constitute an 

Event of Default under the HPA. 

(1) HFA and Eligible Entity each hereby certifies, represents and warrants as of the 

date hereof that each of the representations and warranties of HFA or Eligible Entity, as 

applicable, contained in the HPA are true, correct, accurate and complete in all material 

respects as of the date hereof. All covenants of HFA or Eligible Entity, as applicable, 

contained in the HPA shall remain in full force and effect and neither HFA, nor Eligible 

Entity is in breach of any such covenant. 

(2) Eligible Entity has the full corporate power and authority to enter into, execute, 

and deliver this Second Amendment and any other closing documentation delivered to 

Treasury in connection with this Second Amendment, and to perform its obligations 

hereunder and thereunder. 

(3) HFA has the full legal power and authority to enter into, execute, and deliver this 

Second Amendment and any other closing documentation delivered to Treasury in 

connection with this Second Amendment, and to perform its obligations hereunder and 

thereunder. 

3. Miscellaneous

A. The recitals set forth at the beginning of this Second Amendment are true and 

accurate and are incorporated herein by this reference. 

B. Capitalized terms used but not defined herein shall have the meanings ascribed to 

them in the HPA. 

C. Any provision of the HPA that is determined to be prohibited or unenforceable in any 

jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or 

unenforceability without invalidating the remaining provisions of the HPA, and no such 
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TAMPA/139512.1

prohibition or unenforceability in any jurisdiction shall invalidate such provision in any other 

jurisdiction. 

D. This Second Amendment may be executed in two or more counterparts (and by 

different parties on separate counterparts), each of which shall be deemed an original, but all 

of which together shall constitute one and the same instrument. Facsimile or electronic 

copies of this Second Amendment shall be treated as originals for all purposes. 

[SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE 

INTENTIONALLY LEFT BLANK] 
[Signature Page to Second Amendment to HPA — Alabama] 

In Witness Whereof, HFA, Eligible Entity and Treasury by their duly authorized officials 

hereby execute and deliver this Second Amendment to Commitment to Purchase Financial 

Instrument and HFA Participation Agreement as of the Amendment Date. 

HFA: TREASURY: 

ALABAMA HOUSING FINANCE 

AUTHORITY 

UNITED STATES DEPARTMENT OF THE 

TREASURY 

By: /s/ Robert Strickland By: 

Name: Robert Strickland Name: Timothy G. Massad 

Title: Executive Director Title: Acting Assistant Secretary for 

 Financial Stability 

 

ELIGIBLE ENTITY:

ALABAMA HOUSING FINANCE 

AUTHORITY 

By: /s/ Robert Strickland 

Name: Robert Strickland 

Title: Executive Director 

 

TAMPA/139512.1

EXHIBITS AND SCHEDULES

Schedule A Basic Information 

Schedule B Service Schedules 

Schedule C Permitted Expenses 
TAMPA/139512.1

SCHEDULE A

BASIC INFORMATION

Eligible Entity Information: 

Name of the Eligible Entity: Alabama Housing Finance Authority1

Corporate or other organizational form: a public corporation and instrumentality of 

the State of Alabama, established and 

existing under the Code of Alabama 1975 

§24-1A-1 pursuant to Act No. 80-585 of the 

Alabama Legislature

Jurisdiction of organization: Alabama

Notice Information: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 References in the Agreement to the term "HFA" shall mean the Alabama Housing Finance Agency ("AHFA") in 

its capacity as an HFA as such term is used in the Agreement; references in the Agreement to the term "Eligible 

Entity" shall mean AHFA, in its capacity as Eligible Entity as such term is used in the Agreement. 
TAMPA/139512.1

HFA Information: 

Name of HFA: Alabama Housing Finance Authority 

Organizational form: a public corporation and instrumentality of 

the State of Alabama, established and 

existing under the Code of Alabama 1975 § 

24-1A-1 pursuant to Act No. 80-585 of the 

Alabama Legislature 

Date of Application: August 31, 2010 

Date of Action Plan: September 1, 2010 

Notice Information: Same as Notice Information for Eligible 

Entity. 

Program Participation Cap: $162,521,345.00 

Portion of Program Participation Cap 

Representing Original HHF Funds: N/A 

Portion of Program Participation Cap 

Representing Unemployment HHF Funds: $ 60,672,471.00 

Permitted Expenses: $ 27,024,240.00

Closing Date: September 23, 2010 

First Amendment Date: September 29, 2010 

Second Amendment Date: December 16, 2010 

Eligible Entity Depository Account Information: See account information set forth in the 

Depository Account Control Agreement 

between Treasury and Eligible Entity 

regarding the HHF Program. 
TAMPA/139512.1

SCHEDULE B

SERVICE SCHEDULES

The Service Schedules attached as Schedule B to the Current HPA are hereby deleted in their entirety and 

replaced with the attached Service Schedules (numbered sequentially as Service Schedule B-1, Service 

Schedule B-2, et. seq.), which collectively comprise Schedule B to the HPA. 
TAMPA/139512.1

SERVICE SCHEDULE B-1

ALABAMA HOUSING FINANCE AUTHORITY

PROGRAM TERM SHEET

SUMMARY GUIDELINES 

 1. Program Overview AHFA will administer HHF to subsidize 100 percent of an 

eligible unemployed homeowner’s current mortgage payments 

and all other mortgage-related expenses (including subordinate 

liens, if applicable) during their time of unemployment. The 

assistance will not exceed a total of 12 consecutive monthly 

payments or $15,000 per household. 

Alabama’s HHF will provide a payment (not to exceed the 

lesser of six monthly payments plus fees and costs or $7,500) to 

a participating homeowner’s servicers to bring the homeowner 

current on his or her delinquent mortgage(s). If the maximum 

amount that AHFA will provide exceeds the total amount 

needed to bring the homeowner current on all existing 

mortgages, the homeowner must cover any shortfall. The 

AHFA payment can cover principal, interest, fees, 

escrow/impound expenses, delinquent taxes and/or escrow 

shortage for taxes and insurance. 

Interested homeowners will apply directly to AHFA via a 

secure website monitored and maintained by AHFA staff. 

Applications will be evaluated and approved by AHFA staff 

members. Approved homeowners will be expected to submit 

certain information documenting their inability to pay their 

mortgage and supporting their mortgage claims. 

Once in the program, homeowners will be expected to re-certify 

their continued unemployment and residence in the home on a 

monthly basis. HHF payments will be distributed to servicers 

by AHFA on a monthly basis, contingent upon homeowner 

recertification and continued eligibility for unemployment 

compensation from the Alabama Department of Industrial 

Relations. 

Assistance will continue for up to 12 consecutive monthly 

payments (including two months following re-employment), not 

to exceed $15,000, or until the property ceases to be the 

homeowner’s primary residence. 
TAMPA/139512.1

 2. Program Goals Provide mortgage payment assistance to unemployed Alabama 

homeowners with a chance of sustaining homeownership. 

 3. Target Population / 

Areas 

This program will assist low- to moderate-income families in 

Alabama. AHFA does not anticipate targeting this assistance on 

a geographic basis. 

 4. Program Allocation 

(Excluding 

Administrative Expenses)

$135,497,105.00 

 5. Borrower Eligibility 

Criteria 

Alabama homeowners who have been declared eligible by the 

Alabama Department of Industrial Relations to receive state 

unemployment compensation benefits may apply for assistance. 

Also, applicants must have a total annual household income of 

less than 140 percent of the state median income. Based on the 

current state median annual income of $54,100, the program’s 

maximum annual income limit, as of August 2010, will be 

$75,740. AHFA may change this income limit annually when 

new income data becomes available from the U.S. Department 

of Housing and Urban Development. 

Homeowners will be required to provide a financial Hardship 

Affidavit attesting to their inability to pay their mortgage. HHF 

will be available to qualified homeowners on a first-come, firstserved basis. 

 6. Property / Loan 

Eligibility Criteria 

The homeowner must currently occupy the property as their 

primary residence, and the residence must be located within the 

state of Alabama. Eligible structures include single-family 

homes, attached or detached, and manufactured housing 

attached to real property. Existing mortgage loans on the 

property must have an unpaid principal balance totaling no 

more than $258,691. Alabama HHF will be available only for 

mortgages executed and recorded on or before September 1, 

2010. 

 7. Program Exclusions Mortgage loans on second homes or investment properties will 

not be eligible for HHF assistance. 

 8. Structure of Assistance Homeowners receiving funds will execute a note and a 

subordinate mortgage lien in favor of AHFA that will be 

recorded in public records against the property. Loans will be 

zero percent and non-amortizing. 
TAMPA/139512.1

Loans originated between the pilot program commencement and 

December 31, 2012, will be forgiven over a five-year term at 20 

percent per year. Loans originated between January 1, 2013, 

and December 31, 2013, will be forgiven over a four-year term 

at 24 percent per year. Loans originated between January 1, 

2014, and December 31, 2014, will be forgiven over a threeyear term at 33.3 percent per year. No loans will be originated 

after December 31, 2014. On or before December 31, 2017, or 

such later date allowed by Treasury, any remaining or 

recaptured funds will be returned to Treasury. 

Loans will be repayable only if the homeowner sells the 

property before the forgiveness period expires and there is 

sufficient equity to pay all or part of the unforgiven balance of 

the loan. Repaid HHF funds will be re-invested back into new 

homeowner loans until December 31, 2014. 

Ongoing monitoring, repayments and satisfactions will be 

conducted through AHFA. 

 9. Per Household Assistance Assistance per household not to exceed 100 percent of the 

household’s monthly mortgage payments for 12 consecutive 

months (including all payments needed to bring loans current), 

with total assistance per household never to exceed $15,000. 

 10. Duration of Assistance HHF payments will be distributed to servicers by AHFA on a 

monthly basis. Assistance will continue for no more than 12 

consecutive monthly payments (including two months 

following re-employment), not to exceed $15,000, or until the 

property ceases to be the homeowner’s primary residence. 

Assistance will last only as long as the maximum available 

amount (which will be $15,000 less all total due payments 

required to bring homeowner current on eligible mortgage loans 

which are paid by AHFA) covers 100 percent of the 

household’s monthly mortgage payments. Assistance will cease 

two months after homeowner returns to work, regardless of 

whether the maximum available benefits have been received. 

 11. Estimated Number of 

Participating 

Households 

Based upon maximum assistance of $15,000 per household, it is 

projected that an estimated 9,033 households may be assisted. 

If the average assistance per household is $10,000, 

approximately 13,500 households may be assisted. 

 12. Program Inception / 

Duration 

HHF will be available to homeowners after approval by 

Treasury and will last as long as funds are available. After 

successful completion of a pilot program to begin on December 
TAMPA/139512.1

1, 2010, AHFA anticipates that funds will be available 

statewide on or about February 1, 2011. AHFA expects the 

initial funding allocation to be expended within three years, 

though funds will be recycled until December 31, 2014. 

 13. Program Interactions 

with Other HFA 

Programs 

As AHFA has access to the largest concentration of low- to 

moderate-income homeowners in Alabama with an in-house 

servicing portfolio of 21,000 loans, we anticipate that a number 

of existing AHFA customers will use HHF. 

 14. Program Interactions 

with HAMP 

This assistance can interact with any and all loan modification 

programs, including HAMP, provided that the homeowner 

meets the qualifications established by AHFA and Treasury for 

HHF. HHF funds can be utilized before or after assistance from 

HAMP UP. 

 15. Program Leverage with 

Other Financial 

Resources 

None. 

 16. Qualify as an 

Unemployment 

Program 

; Yes      No
TAMPA/139512.1

SCHEDULE C

PERMITTED EXPENSES

Alabama 

 

 One-time / Start-Up Expenses: 

Initial Personnel $1,146,126.00

Building, Equipment, Technology $668,463.00

Professional Services $199,914.00

Supplies / Miscellaneous $131,193.00

Marketing /Communications $346,726.00

Travel $12,494.00

Website development /Translation $50,000.00

Contingency $131,193.00

 Subtotal $2,686,109.00

 

Operating / Administrative Expenses: 

Salaries $7,320,690.00

Professional Services (Legal, Compliance, 

Audit, Monitoring) $1,336,926.00

Travel $24,989.00

Buildings, Leases & Equipment $0.00

Information Technology & Communications $2,592,636.00

Office Supplies/Postage and 

Delivery/Subscriptions $149,935.00

Risk Management/ Insurance $120,000.00

Training $0.00

Marketing/PR $0.00

Miscellaneous $534,145.00

 Subtotal $12,079,321.00

 

 Transaction Related Expenses: 

Recording Fees $693,452.00 

Wire Transfer Fees $53,109.00 

 Counseling Expenses 

File Intake $2,139,707.00 

Decision Costs $0.00 

Successful File $693,452.00 

Key Business Partners On-Going $8,679,090.00 

 Subtotal $12,258,810.00

 

 Grand Total $27,024,240.00

 

% of Total Award 16.63%

Award Amount $162,521,345.00