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TWELFTH AMENDMENT TO

COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT

and

HFA PARTICIPATION AGREEMENT

This Twelfth Amendment to Commitment to Purchase Financial Instrument and HFA

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

Schedule A attached hereto as the Twelfth 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 set forth on Schedule A attached hereto, as previously amended by those

certain Amendments to Commitment to Purchase Financial Instrument and HFA Participation

Agreement dated as of their respective dates as set forth on Schedule A attached hereto (each, 

an “Amendment” and together with the Original HPA as amended thereby, the “Current

HPA”), 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 (12 U.S.C. 

5201 et seq.), as amended, and as the same may be amended from time to time (“EESA”);

WHEREAS, on February 19, 2016 Treasury announced that it would (i) extend the HHF 

Program through 2020, and (ii) make $2 billion of additional assistance available under the HHF 

Program (the “Fifth Round Funding”) to help prevent foreclosure and stabilize housing markets

in certain states that had previously received HHF Program funding for such purposes; and

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

memorialize the extension of the HHF Program, increase the amount of HHF Program funds

available to Eligible Entity hereunder, and make certain other changes to the terms of the Current 

HPA and the Exhibits and Schedules attached thereto.

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. End of Term. The definition of End of Term in Section 2(A)(14) of the Current 

HPA is hereby deleted and replaced with the following: 
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“End of Term” shall mean the last day of the calendar month in which the Eligible Entity 

makes the last disbursement of HHF Program funds in furtherance of the Services, which

shall occur no later than December 31, 2021 (or such later date as Treasury may 

determine in its sole discretion with written notice to Eligible Entity and HFA). For the 

sake of clarity, Capital Draws shall not be permitted after the End of Term other than for 

payment of Permitted Expenses.

B. Bring Down Certificate. Section 2(A)(15) of the Current HPA is hereby amended 

by (i) striking “on each anniversary of the Effective Date during the Term (as defined 

below)” and replacing it with “on each anniversary of the Effective Date through

September 30, 2016, and from and after October 1, 2016, no later than one hundred 

twenty (120) days after the end of each of their respective fiscal years”, and (ii) by adding 

to the end “A final certification shall be delivered by each of HFA and Eligible Entity on 

the Final Repayment Date (as defined in the Financial Instrument).”

C. Program Participation Cap. Section 3(D) of the Current HPA is hereby deleted in 

its entirety and replaced with the following: 

D. The value of this Agreement is limited to the amount set forth in Schedule A as the 

Program Participation Cap, as may be adjusted from time to time as set forth on Schedule 

F attached hereto (the “Program Participation Cap”). Notwithstanding anything to the 

contrary contained herein, the aggregate Purchase Price payable to Eligible Entity under 

this Agreement with respect to all Services described on the Service Schedules may not 

exceed the amount of the Program Participation Cap.

D. Performance Reports. Section 4(A) is hereby amended by (i) striking the third 

sentence and replacing it with “HFA shall submit the Performance Report to Treasury or 

its designee no later than forty-five (45) days after the end of each calendar quarter and 

otherwise as requested by Treasury. After Treasury has communicated in writing that the 

Performance Report is in a form acceptable to Treasury, HFA shall promptly post the 

Performance Report to its website”; and (ii) adding to the end “A final Performance 

Report shall be delivered no later than forty-five (45) days after the end of the calendar 

quarter in which the End of Term occurs.”

E. Financial Reporting. Section 4(G) of the Current HPA is hereby deleted in its 

entirety and replaced with the following:

G. Each of HFA and Eligible Entity shall provide annual audited financial 

statements to Treasury no later than one hundred twenty (120) days after the end of 

its respective fiscal year, commencing with the first fiscal year ending after the 

Effective Date, and concluding with the fiscal year in which the End of Term occurs. 

Eligible Entity shall provide quarterly unaudited financial statements to Treasury no 

later than forty-five (45) days after the end of each quarter, commencing with the 

first full quarter ending after the Effective Date and concluding with the quarter in 

which the End of Term occurs.
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F. Term. Section 5(A) of the Current HPA is hereby deleted in its entirety and 

replaced with the following:

(A) The term of this Agreement (“Term”) shall begin on the Effective Date and 

extend to the End of Term, or earlier termination of this Agreement by Treasury 

pursuant to the provisions hereof, or earlier suspension or termination of the Services 

by Treasury. Subject to the foregoing, new Services may be undertaken (e.g., 

approval of assistance actions with respect to unique homeowners or properties, 

including, where applicable, final underwriting decisions and payment schedules), 

through and including December 31, 2020 (or such later date as may be determined 

by Treasury in its sole discretion upon prior written notice to Eligible Entity). It is 

understood and agreed that certain administrative, monitoring, reporting, compliance 

and oversight obligations and requirements set forth in this Agreement and the 

Financial Instrument survive the expiration or termination of this Agreement or the 

End of Term, and that funds are to be reserved as set forth in Schedule C to pay for 

the cost of the same, through and including the Final Repayment Date.

G. Modifications. 

(a) Section 9(A) of the Current HPA is hereby amended by inserting “and except as 

expressly set forth herein,” after “Subject to Section 9.B.,”

(b) Section 9(B) of the Current HPA is hereby amended by adding the following at the 

end: 

Notwithstanding anything to the contrary contained herein, Treasury may approve 

revisions proposed by Eligible Entity and HFA to any Schedule or Exhibit attached 

hereto, by written notice to Eligible Entity and HFA, pursuant to a procedure 

established by Treasury in its sole discretion and provided to Eligible Entity and 

HFA. The applicable Schedule or Exhibit shall be deemed modified for all 

purposes hereunder as of the date such written notice is received pursuant to 

Section 8 hereof.

(c) Section 9(C) of the Current HPA is hereby amended by deleting the last sentence 

in its entirety.

H. Exhibit A. Exhibit A attached to the Current HPA is hereby deleted in its entirety 

and replaced with Exhibit A attached to this Amendment.

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

entirety and replaced with Schedule A attached to this Amendment.

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

entirety and replaced with Schedule B attached to this Amendment.

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

entirety and replaced with Schedule C attached to this Amendment.
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L. Schedule F. A new Schedule F is added to the Current HPA in the form attached 

to this Amendment as Schedule F.

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

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

to the “Financial Instrument” shall mean the Second Amended and Restated Financial 

Instrument in the form attached to this Amendment as Exhibit A; and all references in the 

Current HPA to Exhibit A or Schedules A, B, C or F shall mean the Exhibit A or 

Schedules A, B, C or F attached to this Amendment. All references herein to the "HPA" 

shall mean the Current HPA, as further amended by this Amendment.

2. Substitution of Financial Instrument. 

Eligible Entity shall deliver to Treasury on the date hereof a Second Amended and 

Restated Financial Instrument in the form attached to this Amendment as Exhibit A. By 

executing this Amendment, Treasury, HFA and Eligible Entity authorize The Bank of 

New York Mellon to cancel the Financial Instrument previously delivered under the 

Current HPA against delivery of such Second Amended and Restated Financial 

Instrument and direct The Bank of New York Mellon to return the cancelled Financial 

Instrument to (or at the direction of) the Eligible Entity.

3. 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 Amendment, the Second Amended and Restated Financial 

Instrument, and any other closing documentation delivered to Treasury in connection

therewith, and to perform its obligations hereunder and thereunder.

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

this Amendment and any other closing documentation delivered to Treasury in 

connection therewith, and to perform its obligations hereunder and thereunder.
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4. Miscellaneous

A. The recitals set forth at the beginning of this 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 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 Amendment, the Second Amended and Restated Financial 

Instrument, and any other closing documentation delivered in connection therewith, shall be

treated as originals for all purposes.

[SIGNATURE PAGE FOLLOWS;REMAINDER OF PAGE 

INTENTIONALLY LEFT BLANK]
[Signature Page to Twelfth Amendment to HPA – Michigan]

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

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

Instrument and HFA Participation Agreement as of the Amendment Date.

HFA: TREASURY:

MICHIGAN STATE HOUSING 

DEVELOPMENT AUTHORITY

UNITED STATES DEPARTMENT OF THE 

TREASURY

By: /s/ Kevin Elsenheimer By:

Name: Kevin Elsenheimer Name: Mark McArdle

Title: Executive Director Title: Deputy Assistant Secretary for 

Financial Stability

ELIGIBLE ENTITY:

MICHIGAN HOMEOWNER ASSISTANCE 

NONPROFIT HOUSING CORPORATION

By: /s/ Mary Townley

Name: Mary Townley

Title: V.P. Hardest Hit
EXHIBITS AND SCHEDULES

Exhibit A Form of Second Amended and Restated Financial Instrument

Schedule A Basic Information

Schedule B Service Schedules

Schedule C Permitted Expenses

Schedule F HHF Fifth Round Funding Reallocation Model
EXHIBIT A

FORM OF SECOND AMENDED AND RESTATED FINANCIAL INSTRUMENT

This Second Amended and Restated Financial Instrument is delivered by the undersigned party 

(“Eligible Entity”) as provided in Section 1 of the Commitment to Purchase Financial Instrument 

and HFA Participation Agreement (the “Commitment”), entered into as of the Effective Date, as 

modified by those certain Amendments to Commitment to Purchase Financial Instrument and 

HFA Participation Agreement dated as of the dates set forth on Schedule A to the Commitment

(together, the “Agreement”), by and among the United States Department of the Treasury 

(“Treasury”), the party designated as HFA in the Commitment (“HFA”) and Eligible Entity. 

This Second Amended and Restated Financial Instrument is effective as of April 1, 2016. All of 

the capitalized terms that are used but not defined herein shall have the meanings ascribed to 

them in the Agreement.

Recitals

WHEREAS, Eligible Entity executed and delivered that certain Financial Instrument dated as of 

the September 23, 2010 to Treasury (“Original Financial Instrument”); and

WHEREAS, Treasury and Eligible Entity desire to amend certain terms of the Original Financial 

Instrument regarding repayment of the Purchase Price in connection with the extension of the 

HHF Program through 2020 and availability of additional assistance under the HHF Program

Fifth Round Funding; and

WHEREAS, Treasury and the Eligible Entity desire to restate and replace the Original Financial 

Instrument in its entirety.

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

hereby acknowledged, Eligible Entity agrees as follows:

1. Eligible Entity Obligation; Purchase Price Consideration.

(a) Eligible Entity shall perform all Services described in the Service Schedules in 

consideration for the Purchase Price described in subsection (b) below, in 

accordance with the terms and conditions of the Agreement, to the satisfaction of 

Treasury. The conditions precedent to the payment by Treasury of the Purchase 

Price with respect to the Services are set forth in Section 3(B) of the Agreement.

(b) This Second Amended and Restated Financial Instrument is being purchased by 

Treasury pursuant to Section 3 of the Agreement through the payment by 

Treasury of various payments referred to collectively in the Agreement as the 

“Purchase Price”. This Second Amended and Restated Financial Instrument is 

being purchased by Treasury in connection with Eligible Entity’s participation in 

the Housing Finance Agency Innovation Fund for the Hardest Hit Housing 

Markets program (the “HHF Program”) created under the Emergency Economic 
Stabilization Act of 2008 (12 U.S.C. 5201 et seq.) as amended, as the same may 

be amended from time to time (“EESA”).

2. Repayment of Purchase Price. 

If a recipient of HHF Program funds repays any or all of the funds received from Eligible 

Entity in connection with the Services (“Repaid Funds”), and such repayment occurs on 

or before the Final Repayment Date (hereinafter defined), Eligible Entity shall deposit 

such Repaid Funds in the Depository Account and use such Repaid Funds to provide 

Services or to fund the Permitted Expenses to the extent the full amount as indicated on 

Schedule C to the Agreement has not been drawn from Treasury pursuant to Section 3(A) 

of the Agreement. Any Repaid Funds retained by Eligible Entity to fund Permitted 

Expenses shall correspondingly reduce the amount that Eligible Entity may draw from 

Treasury pursuant to Section 3(A) of the Agreement to fund Permitted Expenses.

For the sake of clarity, if a recipient of HHF Program funds repays any or all of the funds 

received from Eligible Entity in connection with the Services, and such repayment occurs 

after the Final Repayment Date, such repaid funds shall not be considered HHF Program 

funds. 

3. Final Repayment. In the event Eligible Entity is holding any HHF Program funds, 

including, but not limited to, amounts reserved for payment of Permitted Expenses and 

Repaid Funds, as of the date that is ninety (90) days after the End of Term (the “Final 

Repayment Date”), all such funds shall be returned to Treasury or its designee prior to

1:00pm Eastern Time on the Final Repayment Date. For the sake of clarity, no Capital 

Draws will be permitted after the Final Repayment Date.

4. Security Interest. As security for the performance of the Services and the other 

obligations of Eligible Entity under the Agreement, as such obligations are evidenced in 

this Second Amended and Restated Financial Instrument, Eligible Entity has granted to 

Treasury a first lien priority security interest in the Depository Account and in any 

moneys, or investments, if any, held therein.

5. Representations, Warranties and Covenants. Eligible Entity represents and warrants that 

the representations and warranties set forth in the Agreement, on the date hereof, are, and 

on the date of each Capital Draw hereunder, shall be, true, correct, accurate and complete 

in all material respects. The truth and accuracy of such representations and warranties 

are continuing obligations of Eligible Entity. Additionally, all covenants of Eligible 

Entity set forth in Section 2 of the Agreement are incorporated herein by reference and 

Eligible Entity, on the date hereof, is not, and on the date of each Capital Draw 

hereunder, shall not be in breach of any such covenants. In the event that any of the 

representations or warranties made herein or in the Agreement cease to be true and 

correct, or the Eligible Entity breaches any of the covenants made herein or in the 

Agreement, Eligible Entity agrees to notify Treasury immediately and the same shall 

constitute an Event of Default hereunder. 
6. Limitation of Liability 

IN NO EVENT SHALL TREASURY, OR ITS OFFICERS, EMPLOYEES, AGENTS 

OR AFFILIATES BE LIABLE TO ELIGIBLE ENTITY WITH RESPECT TO THE 

SERVICES OR THE AGREEMENT, OR FOR ANY ACT OR OMISSION 

OCCURRING IN CONNECTION WITH THE FOREGOING, FOR ANY DAMAGES 

OF ANY KIND, INCLUDING, BUT NOT LIMITED TO DIRECT DAMAGES, 

INDIRECT DAMAGES, LOST PROFITS, LOSS OF BUSINESS, OR OTHER 

INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF ANY 

NATURE OR UNDER ANY LEGAL THEORY WHATSOEVER, EVEN IF ADVISED 

OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF WHETHER 

OR NOT THE DAMAGES WERE REASONABLY FORESEEABLE; PROVIDED, 

HOWEVER, THAT THIS PROVISION SHALL NOT LIMIT TREASURY’S 

OBLIGATION TO REMIT PURCHASE PRICE PAYMENTS TO ELIGIBLE ENTITY 

IN ACCORDANCE WITH THE AGREEMENT.

7. Indemnification 

Eligible Entity agrees as set forth on Schedule E to the Agreement, which Schedule E is 

hereby incorporated into this Second Amended and Restated Financial Instrument by 

reference.

IN WITNESS WHEREOF, Eligible Entity hereby executes this Second Amended and Restated 

Financial Instrument on the date set forth below.

[INSERT FULL LEGAL NAME OF ELIGIBLE ENTITY]

By:

Name: 

Title: 

Date: ____________ __, 2016
A-1

SCHEDULE A

BASIC INFORMATION

Eligible Entity Information:

Name of the Eligible Entity: Michigan Homeowner Assistance Nonprofit 

Housing Corporation

Corporate or other organizational form: Domestic Nonprofit Corporation

Jurisdiction of organization: State of Michigan

Notice Information:

HFA Information:

Name of HFA: Michigan State Housing Development Authority

Organizational form: Public body corporate and politic of the State of 

Michigan

Date of Application: April 14, 2010

Date of Action Plan: September 1, 2010

Notice Information:

With a copy of all correspondence to:

Program Participation Cap: $573,097,554.00

Portion of Program Participation Cap

Representing Original HHF Funds: $154,500,000.00

Portion of Program Participation Cap 

Representing Unemployment HHF Funds: $128,461,559.00

Rounds 1-4 Funding Allocation: $498,605,738.00

Round 5 Funding Allocation: $74,491,816.00

Permitted Expenses: $40,816,853.00
A-2

Closing Date: June 23, 2010

First Amendment Date: September 23, 2010

Second Amendment Date: September 29, 2010

Third Amendment Date: December 16, 2010

Fourth Amendment Date: August 3, 2011

Fifth Amendment Date: June 28, 2012 

Sixth Amendment Date: November 15, 2012 

Seventh Amendment Date: June 6, 2013

Eighth Amendment Date: December 12, 2013

Ninth Amendment Date: October 10, 2014

Tenth Amendment Date: March 6, 2015

Eleventh Amendment Date: October 28, 2015

Twelfth Amendment Date: April 1, 2016

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.
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SERVICE SCHEDULE B-1

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY

PRINCIPAL CURTAILMENT PROGRAM (PC) 

Summary Guidelines

1. Program Overview The Principal Curtailment Program will provide a onetime matching fund of up to $10,000 to homeowners seeking 

to modify their loans. The Lender/Servicer must agree to 

provide matching forgiveness of principal and to modify

the reduced loan balance.

2. Program Goals The Principal Curtailment will prevent avoidable

foreclosures by helping homeowners who have a qualifying,

involuntary hardship (for example, homeowners who

currently cannot refinance or modify their mortgages due to

negative equity positions). Homeowners will benefit from

both a restructured loan payment and the reduction in

principal balance, reducing monthly payments and increasing

sustainability.

3. Target

Population/Areas

MHA does not anticipate targeting this assistance on a

geographic basis, nor have we anticipated targeting specific 

income limits.

4. Program Allocation

(Excluding 

Administrative 

Expenses)

$2,764,875.77

5. Borrower Eligibility

Criteria

MHA determines homeowner eligibility. Homeowners

presently having negative equity, greater than 100% Loan to 

Value (LTV) or greater than 100% Combined Loan to Value 

(CLTV), and needing principal curtailment in order to reach a 

sustainable mortgage payment. Homeowners are required to 

provide a hardship affidavit; it must be the occupying 

Homeowner who has the qualifying, involuntary hardship. If 

providing assistance on a 2nd lien, first lien must be

documented as current. MHA considers a sustainable

mortgage payment 45% or less (gross household income to 

validated mortgage payment).

6. Property/Loan

Eligibility Criteria

The homeowner must currently occupy the property as 

his/her primary residence and it must be located within the

state of Michigan. Homeowners must execute all Hardest Hit 

Funds application and closing documents. Eligible structures 
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to include single-family, attached or detached, or

manufactured homes on a permanent foundation attached to 

real property; 1- 4 unit properties are eligible if one unit is 

primary residence of homeowner. Existing mortgage loan 

balance must be equal to or less than $729,250.

7. Program Exclusions Second homes or investment properties. Homeowners with

Liquid- cash reserves exceeding 6 months validated mortgage 

payments. Lender/Servicer is not required to accept 

homeowner to the program if a notice of trustee/sheriff sale 

has been recorded or the trustee/sheriff sale is scheduled less 

than seven days from date the Lender/Servicer is notified of 

borrower eligibility.

8. Structure of

Assistance

Homeowners receiving assistance will execute a secured

Subordinate lien mortgage and note in favor of the MHA. 

Loan will be 0%, non-amortizing loan, forgivable over a 5 

year term at 20% per year, which will be due on sale, transfer 

of the property, or when the property ceases to be the

principal residence of the homeowner. If the primary lien is

paid in full due to a no cash out, limited-term, refinance, the

MHA may subordinate lien position in accordance with

program guidelines. Mortgage will be recorded through 

public records and ongoing monitoring, repayments, 

discharges, and subordinations will be conducted by MHA. 

Any repayment of program funds will be re-invested back 

into program allocation. All funds remaining in the program 

will be returned to Treasury in accordance with the 

Agreement. Hardest Hit Funds will be available on a first 

come, first serve basis.

The Lender/Servicer will determine terms of modification 

according to their internal guidelines. The Lender/Servicer 

will transmit modification terms to the MHA for review and 

agree to match MHA’s assistance dollar for dollar towards 

principal curtailment. Awarded funds will be remitted to 

Lender/Servicer to be applied towards the capitalized balance 

resulting in a reduction in existing principal on either the 1st

or 2nd Mortgage.

Lender/Servicer is required to provide timely communication 

of homeowner’s loan data to the MHA and agree to place 

collection and foreclosure activity on hold upon their 

acceptance of the homeowner into the Hardest Hit Funds 

Program; active foreclosure action to be canceled upon 

receipt of Hardest Hit Funds. Lender/Servicer is required to 

provide evidence of timely application of Hardest Hit Funds
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inclusive of their required minimum 1:1 match. 

Lender/Servicer is required to waive all accumulated late 

charges and non- sufficient funds (NSF) fees.

9. Per Household

Assistance

Maximum of $10,000 per household with a minimum 1:1

match from the Lender/Servicer; total of $20,000 per 

household.

10. Duration of Assistance One time assistance to homeowner paid directly to

Lender/Servicer for application towards capitalized balance.

11. Estimated Number of

Participating

Households

300 households could be served under this program if they all

receive the maximum funding amount of $10,000.

12. Program Inception/

Duration

Program rolled out July 12, 2010. Based on the

overwhelming need, funds allocated to this Program will 

likely be exhausted 3rd quarter 2014.

13. Program Interactions

with Other HFA 

Programs

Homeowners will only be eligible for one MHA Hardest Hit

Funds Program. MSHDA owned and serviced loans are 

eligible for this program.

14. Program Interactions

with HAMP

Homeowners can receive HAMP assistance (including UP

program assistance) prior to or after receiving Hardest Hit 

Funds assistance; Hardest Hit Funds cannot be used to pay 

HAMP trial period payments. Lender/Servicers to follow

current guidance issued by their investor and/or U.S. 

Treasury.

15. Program Leverage

with Other Financial

Resources

Existing Lender/Servicer will be required to match Hardest

Hit Funds at a minimum of 1:1 towards capitalized debt. 

Lender/Servicer agrees to waive all accumulated late fees and 

NSF fees upon receipt of Hardest Hit Funds.
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SERVICE SCHEDULE B-2

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY

LOAN RESCUE PROGRAM (LR)

Summary Guidelines

1. Program Overview Whether it was a divorce, a serious illness, or a recent period

unemployment, many Michigan families have encountered 

some significant obstacle in their lives that resulted in 

delinquent mortgage, property tax, or condominium 

association fees that could result in property foreclosure.

This program will provide up to $30,000 in assistance to 

households who had a qualifying, involuntary hardship and

can sustain homeownership, but need assistance to catch up 

on delinquent payments, escrow shortage, delinquent 

property taxes, and/or delinquent condominium association 

fees to avoid foreclosure. (Condominium assessed fees as 

described in Act 59, MCL 559.101, et seq., as amended). 

2. Program Goals This program will prevent avoidable foreclosures by helping 

homeowners get back on solid footing. In so doing, the

program will stem the oversupply of foreclosed homes and

short sales that dominate many markets and help stabilize the 

broader housing market in Michigan.

3. Target

Population/Areas

Michigan homeowners currently delinquent on mortgage 

payments including property taxes and/or condominium 

association fees. 

4. Program Allocation

(Excluding 

Administrative 

Expenses)

$175,244,267.73

5. Borrower Eligibility

Criteria

MHA determines homeowner eligibility. Homeowners who

had a qualifying, involuntary hardship (for example, job 

loss, decreased income or a catastrophic event). 

Homeowners are required to provide a hardship affidavit; it 

must be the occupying Homeowner who has the qualifying, 

involuntary hardship. If providing assistance on a 2nd lien, 

first lien must be documented as current. MHA considers a

sustainable mortgage payment 45% or less (gross household 

income to validated mortgage payment). If the property is 

free and clear of mortgage liens, sustainable housing ratio 

will be calculated on monthly payment of annual tax and 

condominium association fees; must be 45% or less. 
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6. Property/Loan

Eligibility Criteria

The homeowner must currently occupy the property as

their primary residence and it must be located within the state

of Michigan. Homeowners must execute all Hardest Hit 

Funds application and closing documents. Eligible structures 

to include single-family, attached or detached, or 

manufactured homes on a permanent foundation attached to 

real property; 1-4 unit properties are eligible if one unit is 

primary residence of homeowner. Existing mortgage loan 

balance must be equal to or less than $729,250.

7. Program Exclusions Second homes or investment properties. Properties already 

foreclosed; after the sheriff sale date or after the foreclosure 

judgment becomes final (property taxes or condominium 

association fees.) Homeowners with liquid cash reserves 

exceeding $10,000. 

8. Structure of Assistance Homeowners receiving assistance must be able to execute a

secured subordinate lien mortgage and note in favor of the

Eligible Entity. Loan will be 0%, non-amortizing loan, 

forgivable over a 5 year term at 20% per year, which will be

due on sale, transfer of the property, or when the property

ceases to be the principal residence of the homeowner. If the 

primary lien is paid in full due to a refinance transaction, the 

MHA may subordinate lien position in accordance with 

program guidelines. Mortgage will be recorded through public

records; repayments, discharges, and subordinations will be 

conducted by MHA. Any lien recoveries will be recycled into 

Michigan’s Hardest Hit Funds for future allocation. All funds 

remaining in the program will be returned to Treasury in 

accordance with the Agreement. Hardest Hit Funds will be

available on a first come, first serve basis.

If assistance is paid directly to tax authority or condominium 

association, homeowner will execute an additional, 

simultaneous Demand Note in the amount of delinquent taxes 

and/or delinquent condominium association fees.

Lender/Servicer and/or eligible third party (property tax 

authority or condominium association) is required to provide

timely communication of homeowner’s loan data to the MHA

and agree to place collection and foreclosure activity on hold 

upon their acceptance of the homeowner into the Hardest Hit 

Funds Program; active foreclosure action to be canceled

upon receipt of Hardest Hit Funds. Lender/Servicer and/or 

eligible third party (property tax authority or condominium 

association) is required to provide evidence of timely 

application of Hardest Hit Funds. Lender/Servicer is required 
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to waive all accumulated late charges and non-sufficient 

funds (NSF) fees.

9. Per Household

Assistance

One time award up to $30,000 per household.

10. Duration of Assistance One-time assistance to homeowner, paid directly to

Lender/Servicer and/or eligible third party, for application 

towards homeowner’s total, accrued delinquent mortgage

payments, escrow shortages, corporate advances, excluding

late charges and NSF fees, delinquent property taxes and/or 

delinquent condominium association fees on homeowners’

account. 

11. Estimated Number 

of Participating Households

Based upon maximum program funding of $30,000 per 

household, 5,841 households may be assisted.

12. Program Inception /

Duration

Based on the overwhelming need, funds allocated to this

Program will likely be exhausted prior to December 31, 2020.

13. Program Interactions

with Other HFA 

Programs

Homeowners will only be eligible for one MHA Hardest Hit

Funds Program. MSHDA owned and serviced loans are 

eligible for this program. Homeowners are eligible for 

simultaneous disbursements to multiple, eligible 

entities/participating partners in this Program. 

14. Program Interactions 

with HAMP

Homeowners can receive HAMP assistance prior to or 

after receiving Hardest Hit Funds assistance; Hardest Hit 

Funds cannot be used to pay HAMP trial period 

payments. Lender/Servicers to follow current guidance

issued by their investor and/or U.S. Treasury.

15. Program Leverage with

Other Financial

Resources

Lender/Servicer agrees to waive all accumulated late fees and

NSF fees. No further matching is required.
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SERVICE SCHEDULE B-3

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY

UNEMPLOYMENT MORTGAGE SUBSIDY PROGRAM (UMS)

Summary Guidelines

1. Program Overview Michigan, through its Unemployment Mortgage Subsidy

Program, may directly provide funds to the Lender/Servicer 

to subsidize an eligible homeowner’s current or modified 

monthly mortgage payment and/or reinstate an existing 

mortgage, property tax or condominium association fees 

delinquency.

This Program assists the homeowner who has had a qualifying,

unemployment or underemployment-related hardship in 

retaining homeownership by subsidizing up to 50% or $1,000 

(whichever is less) of the monthly mortgage payment. The 

monthly subsidy will not exceed a total of 12 consecutive 

months or $12,000. Homeowners will be responsible for the 

unsubsidized portion of their first mortgage lien’s monthly

payment, which will be collected by MHA’s special subservicer and sent to MHA; MHA will always remit the full

mortgage payment directly to the Lender/Servicer. 

Homeowners will also be eligible for upfront assistance to 

contribute towards a mortgage delinquency; inclusive of 

current mortgage payment due, delinquent mortgage 

payments, escrow shortages, corporate advances, excluding 

accrued late charges and non-sufficient funds (NSF) fees, on 

homeowners’ mortgage account. Unemployed or 

underemployed homeowners that do not have a first 

mortgage lien or the first mortgage lien is documented as 

current and is not with a participating lender/servicer may 

be eligible for one-time reinstatement of delinquent property 

taxes and/or condominium association dues only. Maximum

reinstatement amount cannot exceed the maximum program 

reservation of $30,000 less the total amount initially reserved 

for 12 monthly subsidy amounts.

2. Program Goals Provide monthly mortgage payment assistance and delinquent 

mortgage, property tax, or condominium association fees 

reinstatement to unemployed or underemployed residents

helping them remain successful in homeownership by 

preventing avoidable foreclosures. In so doing, the program will 

stem the oversupply of foreclosed homes that dominate many 

markets and help stabilize the broader housing market in 

Michigan.
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3. Target Population /

Areas

Unemployed and underemployed Michigan homeowners who 

need help paying their monthly mortgage payment and/or are 

currently delinquent on mortgage payments, property taxes and 

/or condominium fees. 

4. Program Allocation 

(Excluding 

Administrative

 Expenses)

$81,861,559

5. Borrower Eligibility

Criteria

MHA determines homeowner eligibility. Homeowners who

have lost their job and have received Michigan unemployment 

benefits (UIA) within the last 12 months of application date 

(not registration date) or homeowners who are underemployed 

and are able to document a 20% reduction in gross income. 

Homeowners are required to provide a hardship affidavit; it 

must be the occupying Homeowner who has the qualifying, 

involuntary hardship. Qualifying ratio of 45% or less (gross 

household income, including unemployment compensation, to 

borrower’s required portion of the validated mortgage

payment). If the property is free and clear of mortgage liens, 

sustainable housing ratio will be calculated on monthly 

payments of annual tax and/or condominium association fees; 

must be 45% or less.

6. Property / Loan

Eligibility Criteria

The homeowner must currently occupy the property as their 

primary residence and it must be located within the state of 

Michigan. Homeowners must execute all Hardest Hit Funds 

application and closing documents. Eligible structures to 

include single-family, attached or detached, or manufactured 

homes on a permanent foundation attached to real property;

1-4 unit properties are eligible if one unit is primary residence 

of homeowner. Existing mortgage loan balance must be

equal to or less than $729,250.

7. Program Exclusions Homeowners unable to document an eligible unemployment 

or underemployment hardship. Second homes or investment 

properties. Properties already foreclosed; after the sheriff sale or 

after the foreclosure judgment becomes final (property taxes or 

condominium association fees.) Homeowners with liquid cash 

reserves exceeding $10,000.

Assistance may not be provided on a loan in a 2nd lien position.

8. Structure of Assistance Homeowners receiving assistance must be able to execute a

secured subordinate lien mortgage and note in favor of the

MHA. Loan will be 0%, non-amortizing loan, forgivable over a
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9. Per Household

Assistance

$ 30,000 maximum per household.

10. Duration of Assistance After one-time reinstatement assistance to mortgage 

lender/servicer, tax authority and/or condominium association, 

the monthly subsidy ceases after 12 months consecutive 

monthly payments OR if homeowner fails to pay their portion 

of the payment in accordance with terms of the Note.

11. Estimated Number of

Participating

Households

Based upon maximum program funding of $30,000 per

household, a minimum of 2,728 households may be assisted.

12. Program Inception /

Duration

Based on the overwhelming need, funds allocated to this

program will likely be exhausted prior to December 31, 2017.

13. Program Interactions

with Other HFA 

Programs

Homeowners will only be eligible for one MHA Hardest Hit

Funds Program. MSHDA owned and serviced loans are 

eligible for this program.

14. Program Interactions 

with HAMP

Homeowners can receive HAMP assistance prior to or 

after receiving Hardest Hit Funds assistance; Hardest Hit 

Funds cannot be used to pay HAMP trial period 

payments. Lender/Servicers to follow current guidance

issued by their investor and/or U.S. Treasury.

15. Program Leverage Lender/Servicer agrees to waive all accumulated late fees and

5 year term at 20% per year, which will be due on sale, transfer 

of the property, or when the property ceases to be the principal 

residence of the homeowner. If the primary lien is paid in full 

due to a refinance transaction, the MHA may subordinate lien 

position in accordance with in program guidelines. Mortgage

will be recorded through public records; repayments, 

discharges, and subordinations will be conducted by MHA. 

Any lien recoveries will be recycled into Michigan’s Hardest 

Hit Funds for future allocation. All funds remaining in the

program will be returned to Treasury in accordance with the 

Agreement. Hardest Hit funds will be available on a first come, 

first serve basis.

Lender/Servicer is required to provide timely communication 

of homeowner’s loan data to the MHA and agree to place 

collection and foreclosure activity on hold upon their 

acceptance of the homeowner into the Hardest Hit Funds

Program; active foreclosure action to be canceled upon receipt 

of Hardest Hit Funds. Lender/Servicer is required to provide 

evidence of timely application of Hardest Hit Funds. 

Lender/Servicer is required to waive all accumulated late 

charges and NSF fees.
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Doc#: US1:10549437v4

with Other Financial

Resources

NSF fees. No further matching is required.
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SERVICE SCHEDULE B-4

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY

MODIFICATION PLAN PROGRAM (MP)

Summary Guidelines

1. Program Overview Michigan’s Modification Plan Program provides a permanent

solution to many homeowners who have a qualifying,

involuntary hardship and an unsustainable monthly mortgage 

payment and/or to borrowers with severe negative equity. Up to 

$30,000 in assistance may be provided to the Lender/Servicer to 

pay the capitalized balance or negative equity in order to 

contribute towards reaching a lower monthly payment. Reamortization only or Recast Modifications are eligible. 

2. Program Goals This program will prevent avoidable foreclosures by putting

homeowners who may be at a higher risk of foreclosure into a

permanent, affordable loan modification allowing them to 

maintain homeownership, curb vacancies and stabilize local 

communities.

3. Target

Population/Areas

Homeowners with negative equity greater than 115% Loan 

to Value (LTV) and homeowners who do not have a 

sustainable mortgage payment. 

4. Program Allocation

(Excluding 

Administrative 

Expenses)

$8,841,136.50

5. Borrower Eligibility

Criteria

MHA determines homeowner eligibility. Homeowners who have

a qualifying, involuntary hardship and a present housing 

payment greater than 45% and/or have severe negative equity 

greater than 115% LTV. MHA considers a sustainable 

mortgage payment as 45% or less (gross household income to 

validated mortgage payment.) Homeowners are required to 

provide a hardship affidavit; it must be the occupying 

Homeowner who has the qualifying, involuntary hardship.

6. Property/Loan

Eligibility Criteria

The homeowner must currently occupy the property as their 

primary residence and it must be located within the state of 

Michigan. Homeowners must execute all Hardest Hit Funds 

application and closing documents. Eligible structures to include 

single-family, attached or detached, or manufactured homes on a 

permanent foundation attached to real property; 1-4 unit properties 

are eligible if one unit is primary residence of homeowner. 

Existing mortgage loan balance must be equal to or less than 

$729,250.

7. Program Exclusions Homeowners whose Lender/Servicer is unable to permanently

modify or recast their existing lien. Assistance may not be 
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provided on a loan in a 2nd lien position. Second homes or 

investment properties. Properties already foreclosed; after the 

sheriff sale date or after the foreclosure judgment becomes final 

(property taxes or condominium association fees.) Homeowners

with liquid cash reserves exceeding $10,000.

8. Structure of

Assistance

Homeowners receiving assistance will execute a secured

subordinate lien mortgage and note in favor of the MHA. Loan 

will be 0%, non-amortizing loan, forgivable over a 5 year term at

20% per year, which will be due on sale, transfer of the property, 

or when the property ceases to be the principal residence of the 

homeowner. If the primary lien is paid in full due to a refinance 

transaction the MHA may be willing to subordinate lien position. 

Mortgage will be recorded through public records; repayments, 

discharges, and subordinations will be conducted by MHA. Any 

lien recoveries will be recycled into Michigan’s Hardest Hit 

Funds for future allocation. All funds remaining in the program 

will be returned to Treasury in accordance with the Agreement.

Hardest Hit Funds will be available on a first come, first serve

basis.

MHA will determine amount of assistance up to program 

maximum based on delinquency amount and/or if the loan is 

current, based on amount required to improve negative equity 

position. MHA equity calculation will not reduce principal loan 

balance below 100% LTV. Awarded funds will be remitted to

Lender/Servicer to be applied towards the capitalized balance. 

The Lender/Servicer will determine term of the modification 

according to their internal guidelines and transmit modification 

terms to the MHA. MHA will confirm final LTV is not less 

than 100% and reduced modified mortgage payment is 

sustainable i.e. 45% or less (gross household income to 

validated mortgage payment). 

Lender/Servicer is required to provide timely communication of 

homeowner’s loan data to the MHA and agree to place collection 

and foreclosure activity on hold upon their acceptance of the 

homeowner into the Hardest Hit Funds Program; active 

foreclosure action to be canceled upon receipt of Hardest Hit 

Funds. Lender/Servicer is required to provide evidence of timely 

application of Hardest Hit Funds. Lender/Servicer is required to 

waive all accumulated late charges and non-sufficient funds 

(NSF) fees.

9. Per Household

Assistance

One-time award up to $30,000 per household.

10. Duration of

Assistance

One-time assistance to homeowner, paid directly to

Lender/Servicer, for application towards capitalized balance 
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and/or negative equity, excluding late fees and NSF fees, on 

homeowners’ mortgage account.

11. Estimated Number

of Participating

Households

Based upon maximum program funding of $30,000 per

household, a minimum of 294 households may be assisted.

12. Program Inception/

Duration

Program rolled out July 2012. Based on the overwhelming need,

funds allocated to this Program will likely be exhausted prior to 

December 31, 2017.

13. Program

Interactions with 

Other HFA 

Programs

Homeowners will only be eligible for one MHA Hardest Hit

Funds Program. MSHDA owned and serviced loans are eligible 

for this program. 

14. Program 

Interactions with 

HAMP

Homeowners can receive HAMP assistance prior to or after

receiving Hardest Hit Funds assistance; Hardest Hit Funds cannot 

be used to pay HAMP trial period payments. Lender/Servicers to 

follow current guidance issued by their investor and/or U.S. 

Treasury.

15. Program Leverage

with Other Financial

Resources

Lender/Servicer agrees to waive all accumulated late fees and

NSF fees. No further matching is required.
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SERVICE SCHEDULE B-5

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY

BLIGHT ELIMINATION PROGRAM (BE) 

Summary Guidelines

1. Program Overview Strategically target residential and multifamily demolition in 

designated areas within the state of Michigan, by partnering with 

land banks, non-profit and/or for- profit organizations (together, 

“Partners”). 

2. Program Goals The Blight Elimination Program (BE) primary purpose and goal 

is to focus efforts on decreasing foreclosures and stabilizing 

neighborhoods through the demolition and greening of vacant 

and abandoned single family and multi family structures in 

designated areas across Michigan. MHA will work with program 

Partners to identify meaningful indicators that will enable them 

to track and quantify the Blight Elimination Program’s impact in 

the designated communities.

3. Target

Population/Areas

Demolition funds will be focused in the cities of Detroit, Flint, 

Grand Rapids, Pontiac, Saginaw, Ecorse, Highland Park, River 

Rouge, Ironwood, Muskegon Heights, Inkster, Jackson, 

Hamtramck, Port Huron, Adrian and Lansing. MHA may 

authorize demolition to immediately adjacent neighborhoods to 

the designated cities if there is consensus among the applicable 

Partners that activity will promote increased values of remaining 

property and promote a positive economic impact. 

4. Program Allocation

(Excluding 

Administrative 

Expenses)

$263,568,862

5. Property Eligibility

Criteria

MHA determines property eligibility. Property will be 

considered blighted if it meets any of the following criteria as 

determined by the local governing body in their strategic plan 

and pursuant to program guidelines.

• Considered a public nuisance according to local code or 

ordinance.

• Is a nuisance due to age, physical condition or use.

• Has had utilities, plumbing, heating or sewage disconnected, 

destroyed, removed or rendered ineffective so that property is 

unfit for the intended use.

For any requests submitted on or after January 15, 2016, 

properties must not be legally occupied at the time of any review 
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or approval by the HFA or eligible entity (as applicable) for blight 

elimination activity.

6. Ownership/Loan

Eligibility Criteria

• Eligibility for residential (1-4 units) and multi-family (4+ 

units) demolition will be determined by MHA internal 

committee, ensuring funds will be appropriately spent, 

providing the greatest good for the city and neighborhood as 

defined in the program guidelines.

• MHA to issue note and mortgage not to exceed $25,000 per 

structure for actual costs incurred to acquire (if applicable), 

demolish, green, manage, and maintain property for a period 

to run concurrently with the term of the lien.

7. Program Exclusions • Commercial structures

• Properties listed on a national, state, or local historic register 

that do not receive approval from State Historic Preservation 

office and local Historical Chapters. 

8. Structure of

Assistance

MHA/MSHDA will determine project sites in direct consultation 

with Partners.

Partners will be responsible for property acquisition (if 

applicable), demolition work and on-going property 

maintenance.

Partners will submit to MHA/MSHDA the following for each 

demolition candidate:

• Property ownership and/or acquisition information including 

location, deed, title insurance or equivalent.

• Pre demolition inspection with photos and post demolition 

inspection with photos. Third party environmental inspection 

(including asbestos information, if applicable), report 

providing proof of completion of demolition. 

• Any other miscellaneous information identified on property 

to include hazards, adverse findings, etc.

Upon receipt of the above documentation, MHA will provide 

Hardest Hit funding to Partner after Partner’s execution of a 

mortgage and note for a maximum of $25,000 in favor of MHA. 

Total assistance will provide for payoff of any existing lien (if 

applicable), demolition costs, a $500 one-time project 

management fee, and $750 maintenance fee to cover 

maintenance of property for a period to run concurrently with the 

term of the lien.

Loan will be 0%, non-amortizing loan, forgivable over a 5 year 

term at 20% per year, as long as covenants are met; outstanding 
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balance of loan will be due on sale, transfer, or unauthorized use 

of the property, to the extent of net proceeds received. Mortgage

will be recorded through public records and ongoing monitoring,

repayments, and discharges will be conducted by MHA. Any

repayment of program funds will be re-invested back into 

program allocation. All funds remaining in the program will be 

returned to Treasury in accordance with the Agreement. Special 

considerations may be made by MHA to release lien prior to 5 

year term based on merit of request and to promote positive 

economic impact to community as set forth in program 

guidelines.

9. Per Property 

Assistance

Maximum of $25,000 per structure which includes payoff of 

existing lien (if applicable); demolition costs, a one-time project 

management fee, and maintenance fee.

10. Frequency of

Assistance

One time assistance per property. 

11. Estimated Number of

Properties demolished

10,542 properties could be served under this program if they all

receive the maximum funding amount of $25,000. Further 

economies of scale savings will be investigated to drive costs 

down throughout all communities served for the BE program. 

This will in essence increase the total number of properties served 

to be greater than10,542. 

12. Program Inception/

Duration

Expansion of Program to roll out late November, 2014. Based 

on the overwhelming need, funds allocated to this Program will 

likely be exhausted prior to December 31, 2020.

13. Program Interactions

with Other HFA 

Programs

Property will only be eligible for one MHA Hardest Hit

Funds Program. MSHDA owned properties may be eligible for 

this program.
C-1

SCHEDULE C

PERMITTED EXPENSES

Michigan

One-time / Start-Up Expenses:

Initial Personnel $0.00

Building, Equipment, Technology $0.00

Professional Services $57,270

Supplies / Miscellaneous $0.00

Marketing /Communications $262,500.00

Travel $0.00

Website development /Translation $0.00

Contingency $0.00

Subtotal $ 319,770

Operating / Administrative 

Expenses:

Salaries $21,256,910

Professional Services (Legal, 

Compliance, Audit, Monitoring) $ 1,340,000

Travel $35,000.00

Buildings, Leases & Equipment $ 1,257,730

Information Technology & 

Communications $ 775,000

Office Supplies/Postage and 

Delivery/Subscriptions $478,000.00

Risk Management/ Insurance

Training $ 25,000

Marketing/PR $7,860,003.00

Miscellaneous $ 950,000

Subtotal $ 33,977,643

Transaction Related Expenses:

Recording Fees $1,850,000 

Wire Transfer Fees $225,000 

Counseling Expenses

File Intake $204,440

Decision Costs $0.00

Successful File $0.00

Key Business Partners On-Going $4,240,000
C-1

Subtotal $ 6,519,440

Grand Total $ 40,816,853

% of Total Award 7.12%

Award Amount $573,097,554
F-1

SCHEDULE F

HHF FIFTH ROUND FUNDING REALLOCATION MODEL

This Schedule F describes a uniform model (the “Reallocation Model”) designed to maximize 

the utilization of the $2 billion made available under the HHF Program Fifth Round Funding. In 

general, the Reallocation Model reallocates unused Fifth Round funding to states participating in 

the HHF Program that meet certain defined criteria for utilization of HHF Program funds. The 

aggregate amount obligated under the Fifth Round Funding will not increase at any time.

I. Definitions

(a) “2016 Utilization Threshold” shall mean having Drawn at least 70% of the Rounds 1-4 

Funding Allocation.

(b) “2017 Utilization Threshold” shall mean having Drawn at least 95% of the Rounds 1-4 

Funding Allocation.

(c) “2018 Utilization Threshold” shall mean having Drawn at least 80% of the Program 

Participation Cap.

(d) “Annual Reallocation Amount” shall mean the aggregate amount, if any, by which the 

Program Participation Caps set forth in all HFA Participation Agreements are reduced 

pursuant to the Reallocation Model, as applied with respect to each Utilization Threshold.

(e) “Drawn” shall mean having made Capital Draws pursuant to Section 3(A) of the 

Agreement.

(f) “HFA Participation Agreements” shall mean, collectively, the Commitments to Purchase 

Financial Instrument and HFA Participation Agreements entered into by the States, as 

amended from time to time.

(g) “Population” shall mean the most recent Annual Estimate of the Resident Population for 

a State as determined by the United States Census Bureau from time to time.

(h) “Recipient State” shall mean each State that has achieved the Utilization Threshold for 

the applicable year, provided that such State is not then in default under its HFA 

Participation Agreement. Notwithstanding the foregoing, in the event a State declines an 

increase to its Program Participation Cap and Round 5 Funding Allocation for which it is 

eligible pursuant to this Schedule F, such State shall not be considered a Recipient State. 

(i) “Rounds 1-4 Funding Allocation” is the amount set forth on Schedule A as “Rounds 1-4 

Funding Allocation.”

(j) “Round 5 Funding Allocation” is the amount set forth on Schedule A as “Round 5 

Funding Allocation”, as adjusted from time to time in accordance with this Schedule F.
F-2

(k) “Share of Annual Reallocation Amount” shall mean a Recipient State’s share of the 

applicable Annual Reallocation Amount, as determined using the methodology described 

in Section IV below. If the Annual Reallocation Amount is zero, then the Share of 

Annual Reallocation Amount will be zero for the applicable year.

(l) “State” shall mean any or each of Alabama, Arizona, California, Florida, Georgia, 

Illinois, Indiana, Kentucky, Michigan, Mississippi, New Jersey, Nevada, North Carolina, 

Ohio, Oregon, Rhode Island, South Carolina, Tennessee, and Washington, D.C.

(m)“Utilization Threshold” means each of the 2016 Utilization Threshold, the 2017 

Utilization Threshold and the 2018 Utilization Threshold.

II. Reduction of Program Participation Cap and Round 5 Funding Allocation:

(a) If Eligible Entity does not achieve the 2016 Utilization Threshold on or before December 

31, 2016, each of the Program Participation Cap and Round 5 Funding Allocation shall 

be reduced by an amount equal to 50% of the Round 5 Funding Allocation as of such 

date.

(b) If Eligible Entity does not achieve the 2017 Utilization Threshold on or before December 

31, 2017, each of the Program Participation Cap and the Round 5 Funding Allocation 

shall be reduced by up to 100% of the Round 5 Funding Allocation as of such date.

(c) If Eligible Entity does not achieve the 2018 Utilization Threshold on or before December 

31, 2018, each of the Program Participation Cap and Round 5 Funding Allocation shall 

be reduced by an amount equal to that portion of the Round 5 Funding Allocation which 

has not yet been Drawn nor obligated with respect to a unique homeowner or property as 

of such date.

III. Increase of Program Participation Cap and Round 5 Funding Allocation:

(a) If Eligible Entity achieves the 2016 Utilization Threshold on or before December 31, 

2016, each of the Program Participation Cap and Round 5 Funding Allocation shall be 

increased by the State’s Share of the Annual Reallocation Amount with respect to such 

date.

(b) If Eligible Entity achieves the 2017 Utilization Threshold on or before December 31, 

2017, each of the Program Participation Cap and the Round 5 Funding Allocation shall 

be increased by the State’s Share of the Annual Reallocation Amount with respect to 

such date.

(c) If Eligible Entity achieves the 2018 Utilization Threshold on or before December 31, 

2018, each of the Program Participation Cap and Round 5 Funding Allocation shall be 

increased by the State’s Share of the Annual Reallocation Amount with respect to such 

date.

IV. Methodology for Determining Recipient State’s Share of Annual Reallocation Amount
F-3

If Eligible Entity has achieved the Utilization Threshold and the Annual Reallocation Amount 

is greater than zero for the applicable year, the Program Participation Cap and Round 5 

Funding Allocation will be increased by an amount calculated as follows: 

First, calculate the “Per Capita Amount” for each Recipient State. The Per Capita Amount

shall be calculated as the Annual Reallocation Amount divided by the sum of the Population 

of all Recipient States.

Second, calculate the “Utilization Percentage” for each Recipient State. 

The Utilization Percentage with respect to the 2016 Utilization Threshold and the 2017 

Utilization Threshold shall be calculated as the lesser of (I) the ratio of (x) aggregate Capital 

Draws made by the Recipient State under its HFA Participation Agreement as of December 

31, 2016 and December 31, 2017, respectively, to (y) the Recipient State’s Rounds 1-4 

Funding Allocation as of such dates, or (II) 100%. 

The Utilization Percentage with respect to the 2018 Utilization Threshold shall be calculated 

as the ratio of (x) aggregate Capital Draws made by the Recipient State under its HFA 

Participation Agreement as of December 31, 2018, to (y) such Recipient State’s Program 

Participation Cap as of such date.

Third, calculate a “Utilization Score” for each Recipient State by standardizing the Utilization 

Percentages using the z-score methodology, a standard statistical standardization procedure. 

The Utilization Score for each Recipient State is calculated as (I)(x) the Utilization Percentage 

for such Recipient State, less (y) the mean Utilization Percentage for all Recipient States 

(“Average”), divided by (II) the standard deviation of the Utilization Percentages for all 

Recipient States. If a Recipient State’s Utilization Percentage is greater than the Average, the 

Utilization Score will be positive. If a Recipient State’s Utilization Percentage is less than 

Average, the Utilization Score will be negative.

Fourth, calculate a “Need Factor” for each Recipient State. The Need Factor is a fixed dollar 

amount which will be multiplied by each Utilization Score to determine the dollar amount by 

which each Recipient State’s Per Capita Amount will be adjusted. The Need Factor is

calculated as the dollar amount that would result in the highest adjusted Per Capita Amount 

for a Recipient State being no more than three (3) times that of the lowest adjusted Per Capita 

Amount for a Recipient State (i.e., a Min/Max Factor of 3).

Fifth, calculate an “Adjusted Per Capita Amount” for each Recipient State by adding to or 

subtracting from the Recipient State’s Per Capita Amount the product of (x) the Need Factor 

and (y) the Recipient State’s Utilization Score. Recipient States with positive Utilization 

Scores will have dollars added to the Recipient State’s Per Capita Amount, and Recipient 

States with negative Utilization Scores will have dollars subtracted from the Recipient State’s

Per Capita Amount.

Sixth, calculate the “Share of the Annual Reallocation Amount” for each Recipient State by 

first multiplying the Recipient State’s Adjusted Per Capita Amount by the Recipient State’s
F-4

Population to arrive at a “Preliminary Share”. The Preliminary Share for each Recipient 

State is then normalized to arrive at the Share of the Annual Reallocation Amount by 

multiplying (x) a ratio, the numerator of which is the Preliminary Share for such Recipient

State and the denominator of which is the sum of the Preliminary Shares for all Recipient 

States, and (y) the Annual Reallocation Amount.

V. Notices; Modifications

(a) Treasury will notify Eligible Entity in writing of any adjustment to the Program 

Participation Cap and Round 5 Funding Allocation pursuant to this Schedule F. Related 

adjustments to program allocations and other amounts set forth in the Service Schedules, 

and Permitted Expenses set forth on Schedule C, shall be made as set forth in such 

written notice.

(b) For the avoidance of doubt, a written amendment to the Agreement shall not be required 

to effectuate an adjustment of the Program Participation Cap or Round 5 Funding 

Allocation pursuant to this Schedule F. The Program Participation Cap and Round 5 

Funding Allocation set forth on Schedule A to the Agreement shall be deemed to be 

modified upon receipt of the written notice sent pursuant to Section V (a) above. 

 

(c) Treasury reserves the right to unilaterally modify or supplement the terms and provisions 

of this Schedule F, at any time with prior written notice to the Eligible Entity.