Seventh Amendment to HPA — Kentucky

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SEVENTH AMENDMENT

TO

COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT

and

HFA PARTICIPATION AGREEMENT

This Seventh Amendment to Commitment to Purchase Financial Instrument and HFA

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

Schedule A attached hereto as the Seventh 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 

as further amended by that certain Second Amendment to Commitment to Purchase Financial 

Instrument and HFA Participation Agreement (the “Second Amendment”), as further amended 

by that certain Third Amendment to Commitment to Purchase Financial Instrument and HFA 

Participation Agreement (the “Third Amendment”), as further amended by that certain Fourth 

Amendment to Commitment to Purchase Financial Instrument and HFA Participation Agreement 

(the “Fourth Amendment”), and as further amended by that certain Fifth Amendment to 

Commitment to Purchase Financial Instrument and HFA Participation Agreement (the “Fifth

Amendment”), and as further amended by that certain Sixth Amendment to Commitment to 

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

together with the Original HPA as amended thereby and by the First Amendment, the Second

Amendment, the Third Amendment, the Fourth Amendment, and the Fifth Amendment, the 

“Current HPA”), dated as of their respective dates 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, as applicable, and Treasury has agreed to the 

same;

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

to document all approved modifications to the Service Schedules and Permitted Expenses, as 

applicable;

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.
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Agreement

1. Amendments

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

Current HPA, as further amended by this Seventh 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

Seventh Amendment. All references herein to the "HPA" shall mean the Current HPA, as

further amended by this Seventh Amendment.

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

and replaced with Schedule A attached to this Seventh 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 Seventh 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 Seventh 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 Seventh Amendment and any other closing documentation delivered to 

Treasury in connection with this Seventh 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 

Seventh Amendment and any other closing documentation delivered to Treasury in 

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

thereunder.
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3. Miscellaneous

A. The recitals set forth at the beginning of this Seventh 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 

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

jurisdiction.

D. This Seventh 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 Seventh Amendment shall be treated as originals for all purposes.

[SIGNATURE PAGE FOLLOWS;REMAINDER OF PAGE 

INTENTIONALLY LEFT BLANK]
[Signature Page to Seventh Amendment to HPA – Kentucky]

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

execute and deliver this Seventh Amendment to Commitment to Purchase Financial Instrument and 

HFA Participation Agreement as of the Amendment Date.

HFA: TREASURY:

KENTUCKY HOUSING CORPORATION UNITED STATES DEPARTMENT OF THE 

TREASURY

By: /s/ Brenda Walker By:

Name: Brenda Walker Name: Timothy J. Bowler

Title: Managing Director Title: Deputy Assistant Secretary for 

Financial Stability

ELIGIBLE ENTITY:

KENTUCKY HOUSING CORPORATION

By: /s/ Brenda Walker

Name: Brenda Walker

Title: Managing Director
EXHIBITS AND SCHEDULES

Schedule A Basic Information

Schedule B Service Schedules

Schedule C Permitted Expenses
A-1

SCHEDULE A

BASIC INFORMATION

Eligible Entity Information:

Name of the Eligible Entity: Kentucky Housing Corporation1

Corporate or other organizational form: independent, de jure Municipal Corporation

Jurisdiction of organization: Kentucky

Notice Information:

HFA Information:

Name of HFA: Kentucky Housing Corporation1

Organizational form: independent, de jure Municipal Corporation

Date of Application: September 1, 2010

Date of Action Plan: September 1, 2010

Notice Information:

Program Participation Cap: $148,901,875.00

Portion of Program Participation Cap

Representing Original HHF Funds: N/A

Portion of Program Participation Cap 

Representing Unemployment HHF Funds: $55,588,050.00

Permitted Expenses: $17,868,225.00

Closing Date: September 23, 2010

First Amendment Date: September 29, 2010

Second Amendment Date: December 16, 2010

Third Amendment Date: March 31, 2011

 1 References in the Agreement to the term "HFA" shall mean the Kentucky Housing Corporation (“KHC”) in

its capacity as HFA as such term is used in the Agreement; and references in the Agreement to the term

"Eligible Entity" shall mean KHC, in its capacity as Eligible Entity as such term is used in the Agreement.
A-2

Fourth Amendment Date: September 28, 2011

Fifth Amendment Date: May 3, 2012

Sixth Amendment Date: December 14, 2012

Seventh Amendment Date: October 10, 2014

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.
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.
B-1-1

SERVICE SCHEDULE B-1

KENTUCKY HOUSING CORPORATION

KENTUCKY UNEMPLOYMENT BRIDGE PROGRAM

Summary Guidelines

1. Program Overview The Kentucky Housing Corporation’s (KHC) Kentucky 

Unemployment Bridge Program (UBP) will provide funds to 

lenders and servicers on behalf of qualified homeowners who 

are delinquent on their mortgage payments or anticipate default 

due to a loss of income due to unemployment or a reduction in 

income due to substantial underemployment or a qualifying

disability. Maximum assistance per household is set at $30,000.

There is a time limit of eighteen (18) months for households to 

utilize the assistance – assistance ends at the earlier to occur of 

eighteen (18) months from the loan closing or receipt of $30,000 

in assistance, so long as other conditions of eligibility are met 

and continue. Funds will be available on a first-come firstserved basis.

Borrowers will enter the UBP through the statewide 

Homeownership Protection Center operated by KHC. 

Applications will be processed by housing counseling agencies 

who will return the application to KHC for final underwriting, 

loan closing, disbursements and loan servicing. Borrowers will 

not be required to make any portion of the monthly payment. If 

a household qualifies for the UBP, program funds will be used 

for 100 percent of the monthly payment and reinstatement fees 

to include homeowner’s delinquent balance late fees, penalty 

interest, taxes, insurance, and protective advances.

2. Program Goals To prevent avoidable foreclosure for homeowners who have 

experienced loss of income due to unemployment or a reduction

in income due to substantial underemployment or a qualifying

disability by providing funds to reinstate, pay the household’s 

mortgage payments during the period of 

unemployment/underemployment/disability and for two (2) 

months after re-employment or substantially increased income, 

if needed, up to the maximum dollar threshold for assistance of 

$30,000.

3. Target Population / 

Areas

The UBP will be available statewide. No specific population is 

targeted. During the first twelve (12) months of the UBP, 
B-1-2

$10,000,000 will be set aside to serve rural counties.

4. Total Allocation 

(Excluding 

Administrative 

Expenses)

$131,033,650.00

5. Borrower Eligibility 

Criteria

All borrowers must submit a hardship affidavit 

documenting inability to pay their mortgage.

Housing counselors and KHC will determine eligibility for the 

UBP. Eligible households must meet ALL of the following 

requirements:

• The homeowners must be legal U.S. residents.

• The financial hardship must be loss of employment 

income due to unemployment or a 15% reduction in 

income for the underemployed or qualified disabled

homeowners.

• The homeowner’s cash reserves cannot exceed six (6) 

months, excluding retirement reserves. For purposes of 

the UBP, “cash reserves” is defined as non-retirement 

liquid assets sufficient to pay the household’s monthly 

payment of principal, interest, taxes and insurance (PITI) 

including both first and second lien home mortgage(s). 

• The homeowner must be experiencing a financial 

hardship due to involuntary loss or reduction in 

homeowner’s income documented by an executed 

hardship affidavit. 

• The homeowner must contact KHC or their counselor if 

there is a change in income or employment during the 

eighteen (18) months of UBP participation. 

6. Property / Loan 

Eligibility Criteria

Property/Loan Eligibility Requirements:

• Owner-occupied primary residence located in Kentucky.

• Existing single-family homes or condominiums (attached 

or detached) and manufactured or mobile homes on 

foundations permanently affixed to real estate owned by 

the borrower.

7. Program Exclusions A household is not eligible for the UBP if:

• Borrower’s total unpaid principal balances exceed 
B-1-3

$275,000, including first and second mortgages 

combined.

• Borrower owns other residential or rental property

• Borrower’s hardship is a result of voluntary resignation 

of employment or voluntary reduction in hours or 

income. 

• Borrower’s application is for a second home or 

investment properties. 

• Borrower does not occupy the property as his/her 

primary residence.

The UBP will not fund job training costs.

8. Structure of Assistance All assistance will be structured as a 0% interest, nonamortizing, forgivable, nonrecourse loan, secured by a 

junior lien on the property, which will be forgiven 20 

percent each year over five (5) years.

The loan will only be repayable if the borrower sells the 

property before the period expires and there is sufficient equity 

to pay the loan.

All funds repaid by program participants will be returned to 

UBP for use until December 31, 2017, thereafter they will be 

returned to Treasury.

9. Per Household 

Assistance

Estimated Average - $17,000

Maximum Assistance - $30,000

10. Duration of Assistance Payment of assistance will end on the first to occur of: (1) 

eighteen (18) months from assistance loan closing date, (2) two 

(2) months after re-employment or substantially increased 

employment, (3) the expenditure of the maximum amount of 

assistance ($30,000) or (4) the household no longer complies 

with other required program provisions.

In the case of a new qualifying event of unemployment or 

underemployment or qualifying disability, the household may 

re-apply for assistance. Provided, however that new assistance 

will be made available only to the extent assistance is available, 

up to the maximum total assistance for the household and the 

maximum time period for assistance has not been exhausted.

11. Estimated Number of KHC is estimating that approximately 7,700 households will be 
B-1-4

Participating 

Households

served over the term of the UBP.

12. Program Inception / 

Duration

KHC implemented the UBP in two stages. This first phase of 

the UBP began January 3, 2011 to serve as a pilot period. Full 

implementation to all qualified borrowers statewide began April 

1, 2011. The program will expire December 31, 2017.

13. Program Interaction 

with Other Programs 

(e.g. other HFA 

programs)

The UBP will be leveraged with existing programs including the 

Homeownership Protection Center (HPC), the Homeownership 

Education and Counseling Program funded through HUD and 

KHC and the NeighborWorks Foreclosure Mitigation 

Counseling Program (NFMC). Homeowners who participate in 

the UBP will work with a KHC-approved counselor and utilize 

the Homeownership Protection Center website for their initial 

information.

14. Program Interactions 

with HAMP

KHC and housing counselors will analyze borrowers for their 

eligibility for the Hardest Hit Unemployment Bridge Program as 

well as any other loss mitigation options that may be available to 

them. Where possible, HHF assistance will precede HAMP UP. 

15. Program Leverage with 

Other Financial 

Resources

No investor match is required for this program.

This program will not be combined with other financial 

resources.

16. Qualify as an 

Unemployment 

Program

 Yes  No
C-1

SCHEDULE C

PERMITTED EXPENSES

Kentucky

One-time / Start-Up Expenses:

Initial Personnel $0

Building, Equipment, Technology $115,100

Professional Services $1,900

Supplies / Miscellaneous $1,500

Marketing /Communications $100,000

Travel $0

Website development /Translation $0

Contingency $0

Subtotal $218,500

Operating / Administrative Expenses:

Salaries $7,074,512.78 

Professional Services (Legal, Compliance, Audit, 

Monitoring) $4,323,969.15 

Travel $34,212.50 

Buildings, Leases & Equipment $0.00 

Information Technology & Communications $274,870.00 

Office Supplies/Postage and Delivery/Subscriptions $66,260.57 

Risk Management/ Insurance $0.00 

Training $20,000.00 

Marketing/PR $700,000.00 

Miscellaneous $0.00 

Subtotal $12,493,825.00 

Transaction Related Expenses:

Recording Fees $200,000.00 

Wire Transfer Fees $89,750.00 

Counseling Expenses

File Intake $0.00 

Decision Costs $0.00 

Successful File $4,866,150.00 

Key Business Partners On-Going $0.00 
C-2

Kentucky

Subtotal $5,155,900.00 

Grand Total $17,868,225.00

% of Total Award 12.00%

Award Amount $148,901,875.00