Eighteenth Amendment to HPA — Arizona 

Doc#: US1:10791977v1 

EIGHTEENTH AMENDMENT TO 

COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT 

and 

HFA PARTICIPATION AGREEMENT 

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

to their existing 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 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. 

Agreement 

1. Amendments 

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

Current HPA, as further amended by this 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 Amendment. All 

references herein to the “HPA” shall mean the Current HPA, as further amended by this 

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

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

in connection with this 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 

Amendment and any other closing documentation delivered to Treasury in connection 

with this Amendment, and to perform its obligations hereunder and thereunder. 

3. 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 
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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 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 Eighteenth Amendment to HPA – Arizona] 

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

hereby execute and deliver this Amendment as of the Amendment Date. 

HFA: TREASURY: 

STATE OF ARIZONA, ARIZONA 

DEPARTMENT OF HOUSING 

UNITED STATES DEPARTMENT OF THE 

TREASURY 

By: /s/ Michael Trailor By: 

Name: Michael Trailor Name: Mark McArdle 

Title: Director Title: Deputy Assistant Secretary for 

Financial Stability 

 

ELIGIBLE ENTITY:

ARIZONA HOME FORECLOSURE 

PREVENTION FUNDING CORPORATION 

By: /s/ Michael Trailor 

Name: Michael Trailor 

Title: Chairman 

 
 

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: Arizona Home Foreclosure Prevention 

Funding Corporation

Corporate or other organizational form: Arizona Non-Profit corporation

Jurisdiction of organization: Arizona domiciliary

Notice Information: 

 

HFA Information: 

Name of HFA: State of Arizona, Arizona Department of 

Housing 

Organizational form: Constituent Department of the State of 

Arizona 

Date of Application: April 16, 2010 

Date of Action Plan: September 1, 2010 

Notice Information: 

Program Participation Cap: $296,048,525.00 

Portion of Program Participation Cap 

Representing Original HHF Funds: $125,100,000.00 

Portion of Program Participation Cap 

Representing Unemployment HHF Funds: N/A 

Rounds 1-4 Funding Allocation: $267,766,006.00 

Round 5 Funding Allocation: $28,282,519.00 

Permitted Expenses: $39,779,745.00

Closing Date: June 23, 2010 

First Amendment Date: September 23, 2010 
 A-2 

Second Amendment Date: September 29, 2010 

Third Amendment Date: December 16, 2010 

Fourth Amendment Date: January 26, 2011 

Fifth Amendment Date: March 31, 2011 

Sixth Amendment Date: May 25, 2011 

Seventh Amendment Date: August 31, 2011 

Eighth Amendment Date: March 29, 2012 

Ninth Amendment Date: July 17, 2012 

Tenth Amendment Date: August 24, 2012 

Eleventh Amendment Date: June 6, 2013 

Twelfth Amendment Date: October 30, 2013 

Thirteenth Amendment Date: February 27, 2014 

Fourteenth Amendment Date: October 10, 2014 

Fifteenth Amendment Date: May 21, 2015 

Sixteenth Amendment Date: December 18, 2015 

Seventeenth Amendment Date: May 3, 2016 

Eighteenth Amendment Date: August 31, 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.
B-1-1 

SERVICE SCHEDULE B-1 

SAVEOURHOMEAZ 

Principal Reduction Assistance 

Summary Guidelines 

1. Program Overview Principal Reduction Assistance is being administered by the 

Arizona Department of Housing (“ADOH”) on behalf of the 

Arizona Home Foreclosure Prevention Funding Corporation 

(“AHFPFC”). Assistance under this component is provided to 

homeowners who have suffered an eligible hardship to reduce 

the outstanding principal balances of qualifying properties. 

Efforts under this component include monetary assistance for: 

(a) principal reduction of a borrower’s primary mortgage 

accomplished exclusively through either an interest rate 

reduction and/or term extension to achieve a permanent 

modification, or a reamortization of the remaining unpaid 

principal balance (“recast”) to achieve a lower monthly payment 

(“Modification or Reamortization PRA”); (b) principal reduction 

of a borrower’s primary mortgage contingent upon eligibility for 

a Home Affordable Refinance Program (“HARP”) mortgage 

refinance or other substantively similar mortgage refinance 

(“HARP PRA”); (c) reduction or elimination of an amount up to 

or equal to the existing non-interest-bearing forbearance that was 

the outcome of a prior loan modification (“Forbearance 

Elimination”); or (d) principal reduction of primary mortgages in 

significant negative equity positions for “non-delinquent” 

borrowers to an amount as close to 100% loan-to-value (“LTV”) 

ratio as the amount of per-household assistance will permit to 

reduce the risk of potential default by such borrowers (“Negative 

Equity Reduction”). 

A borrower’s primary mortgage lender may agree to make a 

matching reduction to the principal balance of the primary loan. 

 

2. Program Goals The goal of the Principal Reduction Assistance component is to 

help homeowners avoid foreclosure by reducing the principal 

balance of their primary mortgage to either (a) facilitate a 

permanent loan modification or recast that achieves an 

affordable monthly mortgage payment or (b) reduces a 

borrower’s negative equity position to an amount as close to 

100% LTV ratio as the amount of per-household assistance will 

permit. 
 B-1-2 

 

3. Target 

Population/Areas 

The targeted populations are households whose income does not 

exceed 150% of Area Median Income (“AMI”). 

It is projected that component assistance will be provided to 

targeted areas according to the following breakdown of counties. 

These projections are based on population, delinquent loans and 

pending foreclosures in these areas. 

Maricopa County: 79% of component funds 

Pima County: 9% of component funds 

Pinal County: 9% of component funds 

All other areas: 3% of component funds 

4. Program Allocation 

(Excluding 

Administrative 

Expenses) 

$97,334,171 

5. Borrower 

Eligibility Criteria 

General Eligibility Criteria Applicable to All Types of Principal 

Reduction Assistance: 

• Property must be borrower’s primary residence. 

• Income less than 150% of AMI. 

• Depending on the agreement with the servicer, eligibility will 

be determined through an application process and application 

evaluation by ADOH along with either approved counselors 

or the servicer. 

• Requests for Mortgage Assistance with hardship and Dodd 

Frank Certification. 

Additional Eligibility Criteria Applicable to Each Structure of 

Principal Reduction: 

(a) In the case of Modification or Reamortization PRA

(i.e. principal reduction of a borrower’s primary 

mortgage accomplished exclusively through either an 

interest rate reduction and/or term extension to achieve a 

permanent modification, or a reamortization of the 

remaining unpaid principal balance (“recast”) to achieve 

a lower monthly payment: 

• Eligible financial hardships: includes reduced income 

due to such hardships as underemployment, medical 

condition, divorce or death, as set forth in the 

program guidelines. 

• Post-assistance affordability: a monthly mortgage 

payment that does not exceed either (1) 31% of the 

borrower’s gross monthly income; or (2) 40% of the 

borrower’s gross monthly income for borrowers who 
 B-1-3 

 

have demonstrated an ability to make the modified 

mortgage payment for a 3-month period (“Expanded 

Affordability”). 

(b) In the case of HARP PRA (i.e. principal reduction of a 

borrower’s primary mortgage contingent upon eligibility 

for a HARP mortgage refinance or other substantively 

similar mortgage refinance): 

• Post-assistance affordability: determined by the 

lender’s approval of the HARP or other substantively 

similar mortgage refinance 

(c) In the case of Forbearance Elimination PRA (i.e. 

reduction or elimination of an amount up to the existing 

non-interest-bearing forbearance that was the outcome of 

a prior loan modification): 

• Eligible financial hardship: Borrower has an eligible 

forbearance. Eligible forbearances include a noninterest bearing forbearance that is the outcome of a 

prior loan modification, such as any forbearance 

structured through the Home Affordable Modification 

Program (“HAMP”) or other substantially similar 

loan modification. 

• Pre-assistance affordability: 

o borrower must be in good standing with the 

modification 

o monthly mortgage payment must not exceed 

either (1) 31% of the borrower’s gross 

monthly income; or (2) 40% of the 

borrower’s gross monthly income for 

Expanded Affordability 

(d) In the case of Negative Equity Reduction PRA (i.e. 

principal reduction of primary mortgages in significant 

negative equity positions for “non-delinquent” borrowers 

to an amount as close to 100% LTV ratio as the amount 

of per-household assistance will permit to reduce the risk 

of potential default by such borrowers): 

• Eligible financial hardship: 

o “Severe Negative Equity” defined as: (1) a 

negative equity position in which LTV is 

120% or more or (2) a negative equity 

position in which 10% or more of unpaid 

principal balance (“UPB”) constitutes 

negative equity so long as such negative 

equity amount is at least $20,000 

o borrower must not have liquid assets in 

excess of the total amount of assistance 

provided under this component (as defined in 
 B-1-4 

 

the program guidelines) 

• Pre-assistance affordability: 

o borrower must be “non-delinquent” or made 

“non-delinquent” at the time of assistance 

o monthly mortgage payment must not exceed 

either (1) 31% of the borrower’s gross 

monthly income; or (2) 40% of the 

borrower’s gross monthly income for 

Expanded Affordability 

6. Property/Loan 

Eligibility Criteria 

• Property must be owner-occupied. 

• UPB of the mortgage(s) must be no greater than $500,000 

(including interest-bearing unpaid principal balance(s) and 

any existing non-interest-bearing forbearance balance(s)). 

• Depending on the agreement with the servicer, servicer may 

not be required to approve a homeowner’s participation in 

the component if a trustee’s sale is scheduled to take place 

within seven days or less from date the servicer is notified of 

borrower eligibility. 

• Severe Negative Equity. 

• Property must be a single-family dwelling (1 to 4 units). 

7. Program 

Exclusions 

• Current unpaid principal balance(s) exceeds 150% of the 

homeowner’s purchase price. 

• Total assistance of $10,000 or less. 

• The principal reduction contribution exceeds $100,000 (the 

maximum household assistance). 

• The principal reduction contribution exceeds the amount 

necessary to bring the outstanding mortgage balance to 100% 

of the property’s fair market value: except as applied to 5(a). 

• Properties with an outstanding UPB of the mortgage(s) that 

is greater than $500,000 (including interest-bearing unpaid 

principal balance(s) and any existing non-interest-bearing 

forbearance balance(s)). 

8. Structure of 

Assistance 

Depending on the agreement with the servicer, the structure of 

assistance may be provided in one of the following ways: 

• In the case of Modification or Reamortization PRA, 

principal reduction assistance may be structured as a onetime up-front, forgivable loan in the amount of the assistance 

provided to eligible borrowers. Promissory notes evidencing 

these loans in favor of AHFPFC will be placed on the 

property as a junior lien. A forgiveness clause will extinguish 

the loan in the following manner: (a) the loan amount 

representing the amount necessary to bring the homeowner’s 
 B-1-5 

 

LTV down to 100% will be forgiven at the end of five (5) 

years, and (b) the remainder of the loan amount representing 

the amount of the loan that brought the homeowner’s LTV 

below 100% will be forgiven at the end of thirty (30) years, 

provided the borrower has satisfied all terms of the loan. The 

terms of these loans will be zero-interest, zero-payment for 

the duration of the loan. The loan will be considered 

satisfied upon expiration of the respective term and AHFPFC 

will release the lien connected with the note. These loans 

will be utilized to reduce a portion of the principal on the 

first mortgage loan, the amount of which may be matched by 

the primary lender/servicer. All or part of the loan funds will 

be repaid to AHFPFC in the event that the home increases in 

equity and a sale or a refinance yields excess equity proceeds 

(net of transaction expenses) to the borrower sufficient to 

repay all or a portion of the loan funds. 

• In the case of HARP PRA, principal reduction assistance is 

structured as a one-time up-front installment evidenced by a 

promissory note with a five-year term. Assistance is 

contingent upon eligibility for a HARP or other substantively 

similar mortgage refinance. 

• In the case of Forbearance Elimination PRA and 

Negative Equity PRA, principal reduction assistance may be 

structured as a one-time up-front, forgivable loan in the 

amount of the assistance provided to eligible borrowers. 

Promissory notes evidencing these loans will be for a term of 

five (5) years in favor of AHFPFC and placed on the 

property as a junior lien. A forgiveness clause will extinguish 

the loan amount at the end of five (5) years, provided the 

borrower has satisfied all terms of the loan. The terms of 

these loans will be zero-interest, zero-payment for the 

duration of the loan. The loan will be considered satisfied 

upon expiration of a five-year term and AHFPFC will release 

the lien connected with the note. These loans will be utilized 

to reduce a portion of the principal on the first mortgage 

loan, the amount of which may be matched by the primary 

lender/servicer. All or part of the loan funds will be repaid to 

AHFPFC in the event that the home increases in equity and a 

sale or a refinance yields excess equity proceeds (net of 

transaction expenses) to the borrower sufficient to repay all 

or a portion of the loan funds. 

• Any proceeds that are returned to the component will be 

reutilized to assist additional homeowners in accordance with 

the Agreement. 
 B-1-6 

 

9. Per Household 

Assistance 

• $100,000 is the maximum amount of assistance. 

• $60,000 is the estimated median amount of assistance. 

• The principal reduction contribution must be no greater than 

$100,000 (the maximum household assistance). 

• The principal reduction contribution must be no greater than 

the amount necessary to bring the outstanding mortgage 

balance to an amount as close to a 100% LTV ratio as the 

amount of per-household assistance will permit, except as 

applied to 5(a). 

• Borrowers will not always receive the maximum amount of 

assistance. 

10. Duration of 

Assistance 

Assistance will be available to households on a one-time-only 

basis. 

11. Estimated Number 

of Participating 

Households 

It is anticipated that the Principal Reduction Assistance 

component will assist a minimum of 1,808 households in 

avoiding foreclosures. 

12. Program 

Inception/Duration 

• This component began in September 2010 and it is projected 

that assistance will be expended by December 31, 2021. 

• All funds still available on December 31, 2021 will be 

returned to Treasury in accordance with the Agreement. 

13. Program 

Interactions with 

Other Programs 

(e.g. other HFA 

programs) 

Borrowers may participate in other components, as long as the 

borrower meets the eligibility criteria of each component and 

combined total assistance received from all of the components 

does not exceed the lesser of: (a) the maximum household 

assistance of $100,000 or (b) the amount necessary to bring the 

outstanding mortgage balance to an amount as close to a 100% 

LTV ratio as the amount of per-household assistance will permit 

except as applied to 5(a). 

14. Program 

Interactions with 

HAMP 

ADOH’s program may interact with aspects of the Making 

Home Affordable Program (“MHA”) as ADOH tries to leverage 

the resources provided by the MHA programs to expand the pool 

of borrowers who are eligible for HAMP or other MHA options. 

In some cases, the assistance the ADOH provides under HHF 

can supplement and extend assistance provided through MHA. 

To maximize the effectiveness of our foreclosure mitigation 

efforts, servicers should use reasonable efforts to ensure that 

Troubled Asset Relief Program funds are used efficiently and 

that HHF programs complement MHA programs. 

15. Program Leverage 

with Other 

In order to leverage the funds, ADOH will attempt to have the 

lender/servicer match any principal reduction provided through 
 B-1-7 

 

Financial Resources the Principal Reduction Assistance component. 
B-2-1 

SERVICE SCHEDULE B-2 

SAVEOURHOMEAZ 

Second Mortgage Assistance Component 

Summary Guidelines 

1. Program Overview Under the Second Mortgage Assistance Component, assistance 

will be provided to eliminate second mortgages on eligible 

transactions. 

2. Program Goals The goals of the Second Mortgage Assistance Component are to 

help homeowners avoid foreclosure by eliminating a second 

mortgage if necessary to modify the terms of the primary loan, 

achieve affordability and to reduce the likelihood that a borrower 

will re-default under its primary loan as a result of the burden of 

a second mortgage. 

3. Target 

Population/Areas 

The targeted populations are households whose income does not 

exceed 150% of Area Median Income (“AMI”). 

It is projected that component assistance will be provided to 

targeted areas according to the following breakdown of counties. 

These projections are based on population, delinquent loans and 

pending foreclosures in these areas. 

Maricopa County: 75% of component funds 

Pima County: 8% of component funds 

Pinal County: 9% of component funds 

All other areas: 8% of component funds 

4. Program Allocation 

(Excluding 

Administrative 

Expenses) 

$12,053,697 

5. Borrower Eligibility 

Criteria 

• Eligible financial hardships include (a) reduced income due 

to under employment, medical condition, divorce or death; or 

(b) “Severe Negative Equity” defined as: (1) a negative 

equity position in which LTV is 120% or more or (2) a 

negative equity position in which 10% or more of unpaid 

principal balance (“UPB”) constitutes negative equity so 

long as such negative equity amount is at least $20,000. 

• Property must be borrower’s primary residence. 

• Income less than 150% of AMI. 

• Requests for Mortgage Assistance with hardship and Dodd 

Frank Certification. 

• Affordability for Home Affordable Refinance Program 

(“HARP”) structured assistance is determined by the lender’s 
B-2-2 

approval of the HARP or other substantively similar 

mortgage refinance, otherwise it is 31% of the household’s 

gross monthly income or up to 40% of the borrower’s gross 

monthly income for borrowers who have demonstrated an 

ability to make the modified mortgage payment for a 3-

month period (“Expanded Affordability”). 

6. Property/Loan 

Eligibility Criteria 

• Property must be owner-occupied. 

• Unpaid principal balance (“UPB”) of the mortgage(s) must 

be no greater than $500,000 (including interest-bearing 

unpaid principal balance(s) and any existing non-interestbearing forbearance balance(s)). 

• Property must be a Single-family dwelling (1 to 4 units). 

7. Program Exclusions • Current UPB of the mortgage(s) exceeds 150% of the 

homeowner’s purchase price. 

• Assistance exceeds $60,000. 

• Assistance exceeds the amount necessary to bring the 

outstanding mortgage balance to 100% of the property’s fair 

market value. 

• Properties with an outstanding UPB of the mortgage(s) that 

is greater than $500,000 (including interest-bearing unpaid 

principal balance(s) and any existing non-interest-bearing 

forbearance balance(s)). 

8. Structure of 

Assistance 

• The Second Mortgage Assistance Component will provide 

up-front, forgivable, loans to eligible borrowers. Promissory 

notes on the forgivable loans will be for a term of five (5) 

years in favor of the Eligible Entity and placed on the 

property as a junior lien. A forgiveness clause will extinguish 

the loan amount at the end of five (5) years, provided the 

consumer has satisfied all terms of the loan. The terms of the 

loan are zero-interest, zero-payment for the duration of the 

loan. The assistance loan will be considered satisfied upon 

expiration of five-year term and the Arizona Department of 

Housing (“ADOH”) will release the second lien connected 

with the note. These loans will be utilized to reduce a 

portion of the principal on the existing second mortgage and 

the remaining balance will be extinguished by the 

lender/servicer, if the assistance is less than the outstanding 

principal balance due. All or part of the loan funds will be 

repaid to ADOH in the event that the home increases in 

equity and a sale or a refinance yields excess equity proceeds 

(net of transaction expenses) to the borrower sufficient to 

repay all or a portion of the loan funds. 
B-2-3 

• Second Mortgage Assistance provided as a part of a HARP 

or other approved refinance will be provided in a one-time 

installment evidenced by a promissory note with a five-year 

term. If coupled with Principal Reduction Assistance 

component on a first mortgage the amount of the promissory 

note will be for the combined total of all assistance under 

both components. 

• Any proceeds that are returned to the program will be 

reutilized to assist additional homeowners in accordance with 

the Agreement. 

9. Per Household 

Assistance 

• $60,000 is the maximum amount of assistance. 

• $50,000 is the estimated median amount of assistance. 

10. Duration of 

Assistance 

Second mortgage assistance will be disbursed in full in a onetime payment contingent upon the closing of the transaction. 

11. Estimated Number 

of Participating 

Households 

It is anticipated that the Second Mortgage Assistance Component 

will assist a minimum of 407 households. 

12. Program 

Inception/Duration 

• This program component began in September 2010 and it is 

projected that assistance will be expended by December 31, 

2021. 

• All funds still available on December 31, 2021 will be 

returned to Treasury in accordance with the Agreement. 

13. Program 

Interactions with 

Other Programs 

(e.g. other HFA 

programs) 

ADOH will, on behalf of an approved seller, attempt to 

extinguish the second mortgage as part of a short sale that is part 

of the Short Sale Assistance Component. Assistance is capped at 

$8,500 when combined with the Short Sale Assistance 

Component. Borrowers may participate in other components, as 

long as borrower meets the eligibility criteria of each component 

and the combined total assistance received from all of the 

components is the lesser of the individual component caps or the 

total Program cap of $100,000. 
B-2-4 

14. Program 

Interactions with 

HAMP 

ADOH’s program may interact with aspects of the Making 

Home Affordable Program (“MHA”) as ADOH tries to leverage 

the resources provided by the MHA programs to expand the pool 

of borrowers that are eligible for the Home Affordable 

Modification Program (“HAMP”) or other MHA options. In 

some cases, the assistance the ADOH provides under HHF can 

supplement and extend assistance provided through MHA. To 

maximize the effectiveness of our foreclosure mitigation efforts, 

servicers should use reasonable efforts to ensure that TARP 

funds are used efficiently and that HHF programs complement 

MHA programs. 

15. Program Leverage 

with Other 

Financial Resources 

N/A 
B-3-1 

SERVICE SCHEDULE B-3 

SAVEOURHOMEAZ 

Unemployment/Underemployment/Reinstatement Mortgage Assistance Component 

Summary Guidelines 

1. Program Overview The Unemployment/Underemployment/Reinstatement 

Mortgage Assistance Component (“UMA”) will provide 

mortgage relief for qualified unemployed and underemployed 

borrowers. 

Arizona Department of Housing (“ADOH”) may, on behalf of 

the eligible borrower, bring the first mortgage and any junior 

mortgage (as applicable) current by curing all past due 

payments, accrued interest and legal fees. Additional benefits 

may consist of a full monthly mortgage payment to the 

servicer until the applicable program cap is reached or the 

borrower becomes sufficiently employed and is able to sustain 

the payment at 31% of gross monthly income. 

The borrower will be required to pay a portion of their 

monthly mortgage payment to ADOH in the amount of 31% 

of the household gross monthly income, excluding 

unemployment benefits. 

ADOH will be responsible for ongoing monitoring of 

borrowers to ensure continued eligibility if receiving monthly 

assistance. 

2. Program Goals This Component will provide assistance for a set period of 

time and/or maximum dollar amount. The purpose of the 

Component is to assist borrowers until they can obtain 

sufficient income to resume scheduled mortgage payments or 

qualify for a modified mortgage payment. 

• Sustain the unemployed/underemployed borrower’s 

monthly mortgage payment until the borrower can 

resume payment or the available assistance has been 

provided. 

• Maintain the borrower’s contribution towards its 

monthly mortgage payment at 31% of his or her 

current gross monthly income for the duration of the 

assistance, excluding unemployment benefits. 

3. Target 

Population/Area 

The target population includes eligible homeowners whose 

hardship is caused by unemployment or underemployment. 
B-3-2 

4. Program Allocation 

(Excluding 

Administrative 

Expenses) 

$74,251,694 

5. Borrower Eligibility 

Criteria 

General Requirements: 

• One or more of the responsible borrowers must be 

unemployed/underemployed. 

• Borrowers must participate in (face-to-face when 

possible) continued eligibility validations according to 

program guidelines. 

• Borrower must occupy the subject property as his or 

her primary residence during the assistance 

disbursement period. 

• Income less than 150% of Area Median Income 

(“AMI”). 

• Requests for Mortgage Assistance with hardship and 

Dodd Frank Certification. 

Additional Unemployment Requirements: 

• If the eligible borrower is unemployed, the borrower 

must provide proof he or she applied for 

unemployment benefits and was approved or denied 

(UB107, UB100, Claim status report) for reasons 

identified as acceptable within the Component’s 

guidelines. 

Additional Underemployment Requirements 

• If the eligible borrower is underemployed, the 

borrower must provide documentation of a significant 

reduction of income, as specified in the program 

guidelines, resulting in a housing payment greater than 

31% of his or her gross monthly income. 

Additional Reinstatement Assistance Requirements: 

• Borrower must demonstrate that the hardship caused 

by unemployment or underemployment has passed. 

For example, one of the borrowers was unemployed 

and now the same borrower is employed, eliminating 

the hardship. 

• There must be a correlation between the qualified 

hardship and the delinquency in the mortgage 

payments. 

• Borrowers must demonstrate that they now have the 

ability to afford the monthly mortgage payment. 

Affordability is defined as the payment being at or 
B-3-3 

under 31% of the borrower’s documented gross 

monthly income. 

• A monthly mortgage payment that does not exceed 

40% of the borrower’s gross monthly income for 

borrowers who have demonstrated an ability to make 

the modified mortgage payment for a 3-month period 

(“Expanded Affordability”). 

• The reinstatement assistance may be inclusive of junior 

mortgages (as applicable) and subject to Component 

eligibility criteria. 

6. Property/Loan 

Eligibility Criteria 

• Unpaid principal balance (UPB) of the mortgage(s) must 

be no greater than $500,000 (including interest-bearing 

unpaid principal balance(s) and any existing non-interestbearing forbearance balance(s)). 

• Property must be owner-occupied. 

• Mortgage(s) must be delinquent by at least two (2) 

payments; provided, however, in the case of a borrower 

that is current or has only one payment due and unpaid by 

the end of the month in which it is due, and makes 

application for Component assistance, such borrower will 

be evaluated to determine if it is at risk of imminent 

default. 

• Component payments must go toward a first mortgage 

except when reinstating a junior mortgage. 

• Property must be a single-family dwelling (1 to 4 units). 

7. Program Exclusions • Properties that have an outstanding mortgage(s) in excess 

of 150% of the purchase price. 

• Properties that have an outstanding mortgage(s) in an 

amount greater than $500,000. 

8. Structure of 

Assistance 

• ADOH will execute and record a non-recourse, noninterest bearing forgivable note of no more than five (5) 

years in duration, secured by a junior lien on the property. 

The note amount will be forgiven at the completion of the 

loan term. All or part of the loan funds will be repaid to 

ADOH in the event that the home increases in equity and a 

sale or a refinance yields excess equity proceeds (net of 

transaction expenses) to the borrower sufficient to repay 

all or a portion of the loan funds. 

• Any proceeds that are returned to the program will be 

reutilized to assist additional homeowners in accordance 

with the Agreement. 
B-3-4 

9. Per Household 

Assistance 

Servicers have no responsibility for monitoring individual 

program participation and are not required to refund payments 

received that exceed individual program caps. 

• Original approved monthly mortgage assistance of 

$2,000. Later adjustments to the monthly mortgage 

assistance may exceed the $2,000 a month maximum. 

Assistance is available for a maximum of twenty-four 

(24) months for Borrowers applying for assistance 

prior to September 15, 2016, and for up to a maximum 

of twelve (12) months for applications submitted 

thereafter, including previously rejected applications 

that have been resubmitted to the program. 

• Upfront reinstatement assistance required by servicers 

in order for the homeowner to participate in UMA will 

be limited to twelve (12) months of monthly mortgage 

payment assistance, regardless of the term length of 

monthly mortgage payment assistance approved for the 

Borrower. 

• Maximum amount of assistance will be limited to a cap 

of $60,000. 

10. Duration of 

Assistance 

Servicers have no responsibility for monitoring payment 

duration. 

• Up to twenty-four (24) months’ of mortgage payment 

assistance for participants applying for assistance prior 

to September 15, 2016, and for up to a maximum of 

twelve (12) months for applications submitted 

thereafter, including previously rejected applications 

that have been resubmitted to the program. 

• Benefits may be provided for up to two (2) months 

post re-employment, provided the maximum term 

and/or amount of mortgage payment assistance has not 

been met. 

• Borrowers whose payments remain unaffordable to 

them at the end of the twenty-four (24) month UMA 

term, may be provided an extended term of mortgage 

assistance for six (6) additional months, if such 

assistance has been approved by the Program prior to 

September 15, 2016. During the extended term the 

homeowner will make no contribution toward the 

mortgage payment and will be required to meet with 

their housing counselor to adopt a transition plan. 

11. Estimated Number of It is anticipated that the Unemployment/Underemployment 
B-3-5 

Participating 

Households 

Mortgage Assistance Component will assist a minimum of 

4,211 households. 

12. Program 

Inception/Duration 

• This component began in March 2011 and assistance is 

expected to be expended by December 31, 2021. 

• All funds still available on December 31, 2021 will be 

returned to Treasury in accordance with the Agreement. 

13. Program Interactions 

with Other Programs 

(e.g. other HFA 

Programs) 

Borrowers may participate in other components, as long as the 

borrower meets the eligibility criteria of such component and 

combined total assistance received from all of the components 

is the lesser of the individual component caps or total program 

cap of $100,000. 

14. Program Interactions 

with HAMP 

ADOH’s program may interact with aspects of the Making 

Home Affordable Program (“MHA”) as ADOH tries to 

leverage the resources provided by the MHA programs to 

expand the pool of borrowers that are eligible for Home 

Affordable Modification Program (“HAMP”) or other MHA 

options. In some cases, the assistance the ADOH provides 

under HHF can supplement and extend assistance provided 

through MHA. To maximize the effectiveness of our 

foreclosure mitigation efforts, servicers should use reasonable 

efforts to ensure that TARP funds are used efficiently and that 

HHF programs complement MHA programs. 

15. Program Leverage 

with Other Financial 

Resources 

Servicers will not charge administrative fees (e.g., NSF, late 

charges) in any month where a full contract payment is made. 

If the loan is reinstated or modified following ADOH 

mortgage assistance, servicers will waive all administrative 

fees accrued since the beginning of the delinquency. 
B-4-1 

Doc#: US1:10791977v1 

SERVICE SCHEDULE B-4 

SAVEOURHOMEAZ 

Short Sale Assistance Component 

Summary Guidelines 

1. Program Overview Short Sale Assistance Component will provide the eligible 

seller the funds needed to relocate or secure a lease option 

purchase agreement on the property when a short sale has 

been approved by the homeowner’s servicer. It will provide 

much needed enhancements to the short sale process for 

qualified sellers. 

The Arizona Department of Housing (“ADOH”) is responsible 

for screening sellers to determine program eligibility and 

providing confirmation to the seller and servicer/lender that it 

intends to provide assistance to the seller. 

Servicers may refer potentially eligible sellers to ADOH. 

Depending on the agreement with the servicer and or 

purchaser of the subject property, one of two methods will be 

used to provide short sale assistance: 

• Assistance may be provided in order to facilitate the 

short sale. 

• Assistance may be provided in order to facilitate a 

short sale lease option transaction. 

The structure of these two types of assistance is further 

discussed in Section 8. 

ADOH may provide funds directly to the homeowner as a part 

of the short sale closing/funding process but not prior to 

closing. 

2. Program Goals Short Sale Assistance Component was designed to help 

stabilize communities by providing assistance to consumers in 

unrecoverable situations to transition from homeownership to 

renting as well as enhance the marketability of short sale 

properties and accelerate the stabilization of property value. 

3. Target 

Population/Area 

The targeted populations are households whose income does 

not exceed 150% of Area Median Income (“AMI”). 
 B-4-2 

4. Program Allocation 

(Excluding 

Administrative 

Expenses) 

$1,261,490 

5. Borrower Eligibility 

Criteria 

• Lender-approved short sale. 

• Purchase and Sale Agreement. 

• Income less than 150% of AMI. 

• Requests for Mortgage Assistance with hardship and Dodd 

Frank Certification. 

6. Property/Loan 

Eligibility Criteria 

• Property must have been owner-occupied within the last 

12 months. 

• Unpaid principal balance (“UPB”) of the mortgage(s) must 

be no greater than $500,000 (including interest-bearing 

unpaid principal balance(s) and any existing non-interestbearing forbearance balance(s)). 

• Property must be a Single-family dwelling (1 to 4 units) 

7. Program Exclusions • Property located outside of Arizona. 

• Properties with an outstanding UPB of the mortgage(s) 

that is greater than $500,000. 

• Sellers who apply for assistance after the short sale has 

been completed. 

• Sellers who are executing a “strategic default” 

(determination made through program underwriting 

guidelines). 

• Properties that have an outstanding mortgage(s) in an 

amount greater than $500,000 (including interest-bearing 

unpaid principal balance(s) and any existing non-interestbearing forbearance balance(s)). 

8. Structure of 

Assistance 

Assistance under this component will be structured as a onetime installment to the appropriate party. 

When provided to facilitate a short sale, assistance may be 

structured in the following manner: 

• Transition assistance may be available to the seller. 

• Seller-paid closing cost assistance on behalf of the 

buyer when applicable. 

• Assistance to extinguish junior liens when applicable. 

When provided to facilitate a short sale with a lease purchase 
 B-4-3 

option, assistance may be structured in the following manner: 

• Lease Purchase Option (“LPO”) for the subject 

property between the seller and the buyer. 

• Transaction fee paid to the buyer on behalf of the 

seller. 

• Property maintenance cash reserve payment paid to the 

buyer on behalf of the seller. 

• Financial assistance when the sales price exceeds 80% 

of the Broker Price Opinion (“BPO”) used to 

determine the sales price. These funds will be paid 

directly to the current lender to satisfy the short sale 

pay-off balance as part of the short sale closing 

process. 

9. Per Household 

Assistance 

• Maximum assistance for short sale assistance shall be 

$25,000, in accordance with program guidelines. 

• Maximum assistance for Short Sale Assistance Component 

with a lease purchase option shall be $66,000, in 

accordance with program guidelines, including when 

combined with other programs. 

10. Duration of 

Assistance 

Program is a one-time payment per seller household, made 

upon close of escrow on the short sale. 

11. Estimated Number of 

Participating 

Households 

Based on ADOH eligibility criteria and available funding, it is 

anticipated that the Short Sale Assistance Component will 

assist a minimum of 163 households. 

12. Program 

Inception/Duration 

This component began in June 2011 and it is projected that 

assistance will be expended by December 31, 2021. All funds 

still available on December 31, 2021 will be returned to 

Treasury in accordance with the Agreement. 

13. Program Interactions 

with Other Programs 

(e.g. other HFA 

Programs) 

Borrowers may participate in other components, as long as the 

borrower meets the eligibility criteria of each component and 

combined total assistance received from all of the components 

is the lesser of the individual component caps or the total 

Program cap of $100,000. Sellers participating in Home 

Affordable Foreclosure Alternative (“HAFA”) Assistance may 

receive up to $1,500 for relocation assistance. 
 B-4-4 

14. Program Interactions 

with HAMP 

ADOH’s program may interact with aspects of the Making 

Home Affordable Program (“MHA”) as ADOH tries to 

leverage the resources provided by the MHA programs to 

expand the pool of borrowers that are eligible for Home 

Affordable Modification Program (“HAMP”) or other MHA 

options. In some cases, the assistance the ADOH provides 

under HHF can supplement and extend assistance provided 

through MHA. To maximize the effectiveness of our 

foreclosure mitigation efforts, servicers should use reasonable 

efforts to ensure that TARP funds are used efficiently and that 

HHF programs complement MHA programs. 

15. Program Leverage 

with Other Financial 

Resources 

Short sale assistance may be combined with lease purchase 

options funded by a third party. 
B-5-1 

SERVICE SCHEDULE B-5

SAVEOURHOMEAZ (SOHAZ) 

Down Payment Assistance (DPA) 

Summary Guidelines

1. Program 

Overview

The Down Payment Assistance (DPA) Program will provide an 

incentive to qualified homebuyers to purchase a primary 

residence in targeted areas in Arizona. Providing incentives to 

qualified homebuyers in housing markets that have been hardest 

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

foreclosures will strengthen demand in those areas, stabilize 

housing prices and prevent future foreclosures. This Program 

will be offered within 17 municipalities in Arizona. 

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

foreclosures by assisting with the stabilization of housing 

prices in targeted areas. The Arizona Home Foreclosure 

Prevention Funding Corporation (AHFPFC) will identify 

meaningful indicators that will enable them to track and 

quantify the DPA Program’s impact in the targeted areas. 

3. Target 

Population/Areas 

Targeted areas (“Targeted Area”) are as follows: 

This component will be offered within 17 municipalities in 

Arizona, to include: Arizona City, Avondale, Buckeye, Casa 

Grande, Coolidge, Douglas, El Mirage, Fort Mohave, Goodyear, 

Huachuca City, Laveen, Maricopa, Red Rock, Sierra Vista, 

Snowflake, Tucson, and Yuma. 

 For these specific areas, AHFPFC evaluated five (5) housing 

market distress indicators across the entirety of Arizona. Each 

Targeted Area exceeded the statewide rate in at least four (4) out 

of the five (5) distressed housing market indicators which 

include: change in sale price from one year ago; REO sales rate; 

Short sales rate; Negative Equity; and the Foreclosure Rate. 

4. Program Allocation 

(Excluding 

Administrative 

Expenses) 

$71,367,728 
 B-5-2 

Doc#: US1:10791977v1 

5. Borrower Eligibility 

Criteria 

Eligible borrowers must qualify for and meet all requirements of

the Arizona Housing Finance Authority’s (AzHFA) or Arizona 

Industrial Development Authority’s Pathway to Purchase Home 

Loan Program. Allowable first mortgage loans will be ”Qualified 

Mortgages” (QM) that are 30-year, fixed-rate loans from the 

Federal Housing Administration (FHA), U.S. Department of 

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

Development (RD), Fannie Mae HFA Preferred, and Freddie 

Mac HFA Advantage. Eligible borrowers must also meet the 

following criteria: 

• Borrower(s) must be a first-time homebuyer. For 

purposes of the DPA Program, a first-time homebuyer is 

defined as someone who has not had an ownership 

interest in their primary residence in the past three years 

or qualifies under either a Veteran’s Exception (as 

defined in the DPA Program Guide) or is purchasing a 

home in a Federally Designated Targeted Area (as 

defined in the DPA Program Guide). 

• Borrower(s) income not to exceed 150% of the State 

Median Income as determined by HUD. 

• Purchase Price limit is four (4) times the annual income 

limit. 

• Each borrower must complete a homebuyer education 

course before closing. The homebuyer education 

requirement may be met by taking a pre purchase course 

through an internet-based program developed by 

mortgage insurance companies, such MGIC or Genworth 

Financial or through another HUD-approved homebuyer 

education provider. 

• The homebuyer will work through one of the approved 

and participating mortgage lenders or a mortgage lender 

participating in one of the IDA’s comparable homebuyer 

programs. The lender will be the borrower’s point of 

contact throughout the process, working with the 

homebuyer to obtain a qualifying mortgage and 

registration for the DPA loan. 

• Each borrower will be required to provide a satisfactory 

Dodd-Frank certificate. 
 B-5-3 

Doc#: US1:10791977v1 

6. Property/Loan 

Eligibility Criteria 

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

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

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

principal residence. 

• Must be the borrower’s primary residence. 

• Property must be located in a Targeted Area. 

• Meet all applicable DPA, Ginnie Mae (FHA, VA, USDA-RD) 

or GSE (Fannie Mae & Freddie Mac) underwriting guidelines.

• Must be a resale of an existing property. 

• Property must be within the purchase price limit of no more 

than four (4) times the annual income limit established for the 

program. 

7. Program Exclusions • Borrowers, properties and loans not assisted through the 

Pathway to Purchase Home Loan Program or comparable IDA 

homebuyer program. 

• Dodd-Frank exclusion for having been convicted of a 

mortgage-related felony in the past ten years. 

8. Structure of Assistance Down payment assistance, including reasonable and customary 

closing costs, will be made available to homeowners as follows: 

Assistance will be structured as a one-time up-front, forgivable 

loan in the amount of the assistance provided to eligible 

borrowers. A promissory note evidencing the loan will be for a 

term of five (5) years in favor of AHFPFC and placed on the 

property as a junior lien. A forgiveness clause will extinguish the 

loan amount at the end of five (5) years, provided the borrower 

has satisfied all terms of the loan. The terms of these loans will 

be zero-interest, zero-payment for the duration of the loan. The 

loan will be considered satisfied upon expiration of a five-year 

term and AHFPFC will release the lien connected with the note. 

All or part of the loan funds will be repaid to AHFPFC in the 

event that a sale or a refinance yields excess equity proceeds (net 

of transaction expenses) to the borrower sufficient to repay all or 

a portion of the loan funds. 

Any proceeds that are returned to the component will be 

reutilized to assist additional homeowners in accordance with 

the Agreement. 

9. Per Household 

Assistance 

The lesser of 10 percent of the purchase price amount or 

$20,000. 
 B-5-4 

Doc#: US1:10791977v1 

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

Housing Finance Authority, Arizona Industrial Development 

Authority, or a local Industrial Development Authority who prefunds the DPA at closing once it is determined that all DPA 

component requirements have been met. Funds may also be used 

to reimburse towards a homebuyer assisted through a local IDA 

homebuyer program that meets all program requirements. 

11. Estimated Number of 

Participating 

Households 

It is anticipated that the DPA Program will assist approximately 

4,261 households. 

12. Program 

Inception/Duration 

The DPA Program will begin in March 2016 and it is projected 

that assistance will be expended through 2021. 

13. Program Interactions 

with Other Programs 

(e.g. other HFA 

programs) 

The DPA Program will take advantage of an existing 

infrastructure of participating lenders who are already actively 

originating Pathway to Purchase Home Loans or lenders 

participating in a local IDA homebuyer program. If the 

borrower has received HHF assistance under any other 

Program Component, they will be excluded from receiving 

assistance under this component. 

Any borrower receiving funds from the DPA Program will not 

be eligible for other down payment assistance programs 

offered by the Arizona Housing Finance Authority or Arizona 

Industrial Development Authority. 

14. Program Interactions 

with HAMP 

None. 

15. Program Leverage with 

Other Financial 

Resources 

None. 
 C-1 

SCHEDULE C 

PERMITTED EXPENSES 

Arizona 

Program Duration (years) 

 One-time / Start-Up Expenses: 

Initial Personnel $59,470.00

Building, Equipment, Technology $6,379.00

Professional Services $57,650.00

Supplies / Miscellaneous $0.00

Marketing /Communications $126.00

Travel $1,877.00

Website development /Translation $67,147.00

Contingency $0.00

 Subtotal $192,649.00

Operating / Administrative Expenses: 

Salaries $13,199,156

Professional Services (Legal, Compliance, Audit, 

Monitoring) 

$1,647,728

Travel $56,650

Buildings, Leases & Equipment $0

Information Technology & Communications $475,000

Office Supplies/Postage and Delivery/Subscriptions $900,000

Risk Management / Insurance $0.00

Training $4,000.00

Marketing/PR $1,808,099

Miscellaneous $1,540,000

 Subtotal $19,630,633

 Transaction Related Expenses: 

Recording Fees $8,532,736 

Wire Transfer Fees $0.00 

 Counseling Expenses 

File Intake $0.00 

Decision Costs $0.00 

Successful File $0.00 

Key Business Partners On-Going $11,423,727 

 Subtotal $19,956,463

 Grand Total $39,779,745

% of Total Award 13.44%

Award Amount $296,048,525