COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT

and

HFA PARTICIPATION AGREEMENT

This Commitment to Purchase Financial Instrument and HFA Participation Agreement (the

"Agreement") is entered into as of the Effective Date (defined below), by and among the United

States Department ofthe 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"). Certain information relating to HFA and Eligible

Entity is set forth in Schedule A attached hereto.

Recitals

WHEREAS, Treasury has established several programs under sections 101 and 109 of the

Emergency Economic Stabilization Act of2008 (P.L. 110-343), as amended, as the same may be

amended from time to time ("EESA"), to stabilize the housing market by facilitating mortgage

loan modifications to prevent avoidable foreclosures, including through providing home price

decline protection incentives, encouraging foreclosure alternatives, such as short sales and deeds

in lieu of foreclosure, and making other foreclosure prevention services available to the

marketplace;

WHEREAS, the U.S. Department of Housing and Urban Development, as the nation's housing

agency, has partnered with Treasury in the administration's response to the mortgage and

foreclosure crisis;

WHEREAS, as a component of this partnership Treasury has created a federal housing program

entitled the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (the

"HHF Program") as an additional program pursuant to EESA;

WHEREAS, Treasury has requested proposals from state housing finance agencies in designated

states for the use of funds allocated to the HHF Program to develop and implement innovative

housing initiatives tailored to their local conditions to help prevent foreclosures and stabilize

housing markets, including individual programs targeting unemployed borrowers, "underwater"

borrowers and second lien relief;

WHEREAS, HFA or Eligible Entity has submitted a proposal to Treasury outlining certain

programs to utilize HHF Program funds, which programs are described in the Service Schedules

attached hereto as Schedule B;

WHEREAS, as required under EESA, HFA has designated Eligible Entity as the financial

institution to receive HHF Program funds and act to implement the Services (as defined below);

WHEREAS, HFA and Eligible Entity wish to participate in the HHF Program on the terms and

subject to the conditions set forth herein;

TAMPJVHPA - North CarolinalI21385.!
Accordingly, in consideration ofthe 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. Services

A. Eligible Entity shall (i) contemporaneously with the execution and delivery of this

Agreement, deliver a fully executed Financial Instrument (the "Financial Instrument") to

Treasury evidencing its obligations under this Agreement, in the form attached hereto as

Exhibit A; (ii) perform the duties and obligations set forth in this Agreement and the

Financial Instrument; and (iii) provide and perform (or engage qualified vendors to provide

and perform) the Services described in the Service Schedules (as defined below).

B. Contemporaneously with the execution and delivery of this Agreement, HFA and

Eligible Entity shall deliver to Treasury multiple schedules (each a "Service Schedule" and

together, the "Service Schedules") describing the services (the "Services") to be performed

by Eligible Entity under the HHF Program. The Service Schedules will be numbered

sequentially as Service Schedule B-1, Service Schedule B-2, et. seq., and are referenced

herein, collectively, as Schedule B.

C. Contemporaneously with the execution and delivery of this Agreement, HFA and

Eligible Entity shall also deliver to Treasury a budget detailing the administrative expenses

necessary to carry out the Services (the "Permitted Expenses"). The budget detailing the

Permitted Expenses is attached hereto as Schedule C. Neither HFA nor Eligible Entity shall

expend HHF Program funds for administrative expenses in excess of the total amount of the

Permitted Expenses (reasonable variances between line items being permitted) without the

prior consent of Treasury, which may be withheld in Treasury's sole discretion.

Additionally, all administrative expenses paid with HHF Program funds shall be accounted

for and are subject to OMB Circular A-87 (revised 5/4/95, as further amended 8/29/97),

which can be found at http://www.whiteholise.gov/omb/rewrite/circulars/a087/a087-all.html.

2. Representations, Warranties and Covenants

A. HFA and Eligible Entity. HFA and Eligible Entity, each for themselves, 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 ofthe 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 hereunder.

(l) HFA and Eligible Entity each represent and warrant that it is in compliance with,

and covenants that all Services will be performed in compliance with, EESA and all

Federal, state and local laws, regulations, regulatory guidance, statutes, ordinances, codes

and requirements, applicable to the provision ofthe Services by HFA and Eligible Entity,

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or its officers, employees, agents or contractors, including, but not limited to, the Truth in

Lending Act, 15 U.S.c. §1601 et seq., the Home Ownership and Equity Protection Act,

15 U.S.C. § 1639, the Federal Trade Commission Act, 15 U.S.C. § 41 et seq., the Equal

Credit Opportunity Act, 15 U.S.C. § 701 et seq., the Fair Credit Reporting Act, 15 U.S.C.

§ 1681 et seq., the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., the Real

Estate Settlement Procedures Act, 12 U.S.C. §2601 et seq., the Fair Housing Act, 42

U.S.C. §3601, the Gramm Leach Bliley Act, 15 U.S.C. §6801-6809, and §§ 114 and 315

of the Fair and Accurate Credit Transactions Act of 2003 (the "FACT Act"), 15 U.S.c.

§§ 1681m(e) and 1681 c(h), and all other Federal and state laws and regulations

applicable thereto, including, without limitation, those designed to prevent unfair,

discriminatory or predatory lending practices, tenant rights and licensing (collectively,

the "Applicable Laws").

(2) The performance of the Services will not conflict with, or be prohibited in any

way by, the Applicable Laws or any agreement or restriction by which HFA or Eligible

Entity is bound. Neither HFA nor Eligible Entity is aware of any other legal, financial or

other impediments to performing the Services or its obligations under this Agreement,

and shall promptly notify Treasury of any such impediments which may impair its ability

to perform the Services or its obligations under this Agreement, as applicable. Neither

HFA nor Eligible Entity is delinquent on any Federal tax obligation or any other debt

owed to the United States or collected by the United States for the benefit of others,

excluding any debts or obligations that are being contested by it in good faith.

(3) Neither HFA nor Eligible Entity has received written notice of any action, suit,

restraining order, irDunction, investigation, proceeding or inquiry at law or in equity,

pending or threatened, by or before any judicial, quasi-judicial, legislative or

administrative court, agency or authority, or any arbitrator, nor to the best of HFA's and

Eligible Entity's knowledge is there any basis for any of the foregoing, wherein an

unfavorable determination, ruling or finding would materially adversely affect the

validity or enforceability of this Agreement, the Financial Instrument or the ability of

HFA or Eligible Entity to perform its respective obligations hereunder and thereunder.

(4) HFA and Eligible Entity each covenants that: (i) it will perform its obligations in

accordance with this Agreement and Applicable Laws, and will promptly provide such

performance or other reporting as may be required by Treasury, the Government

Accountability Office ("GAO"), Congressional Oversight Panel or the Special Inspector

General of the Troubled Asset Relief Program ("SIGTARP"); (ii) it will maintain

complete, accurate and appropriate records of, and SuppOliing documentation for, all

Services provided in connection with the HHF Program; (iii) all Services will be offered

and performed in accordance with the Service Schedules, fully documented and serviced,

or otherwise performed, in accordance with this Agreement and EESA; and (iv) all data,

collection information and other information reported by HFA or Eligible Entity to

Treasury under this Agreement, including, but not limited to, information that is relied

upon by Treasury in calculating the Purchase Price (as defined below) or in performing

any compliance review will be true, complete and accurate in all material respects, and

consistent with all relevant business records, as and when provided.

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(5) HFA and Eligible Entity each covenants that it will: (i) perfonn the Services and

obligations required under this Agreement in accordance with the practices, high

professional standards of care, and degree of attention used in a well-managed operation,

and no less than that which HFA or Eligible Entity exercises or would exercise for itself

under similar circumstances; and (ii) use qualified individuals with suitable training,

education, experience and skills to perform the Services. HFA and Eligible Entity each

acknowledges that HHF Program participation may require changes to, or the

augmentation of, its systems, staffing and procedures, and covenants and agrees to take

all reasonable actions necessary to ensure it has the capacity to implement the Services in

accordance with this Agreement.

(6) HFA and Eligible Entity each covenants that it will comply with all regulations on

cont1icts of interest that are applicable to HFA or Eligible Entity, as the case may be, in

connection with the conduct of its business and performance of the Services and all

cont1icts of interest and non-disclosure obligations and restrictions and related mitigation

procedures set forth in this Agreement.

(7) HFA and Eligible Entity each acknowledges that the prOVISIon of false or

misleading information to Treasury in connection with the HHF Program or the Services

may constitute a violation of: (a) Federal criminal law involving fraud, conflict of

interest, bribery, or gratuity violations found in Title 18 ofthe United States Code; or (b)

the civil False Claims Act (31 U.S.C. §§ 3729-3733). HFA and Eligible Entity each

covenants to immediately disclose to Treasury any discovered credible evidence, in

connection with this Agreement and the Services, that a management official, employee,

or contractor of Eligible Entity has committed, or may have committed, a violation ofthe

referenced statutes or other wrongdoing.

(8) HFA and Eligible Entity each covenants to disclose to Treasury any other material

facts or information in its possession that Treasury should expect to know about HFA or

Eligible Entity or its employees, management officials or contractors to help protect the

reputational interests of Treasury in connection with the HHF Program.

(9) HFA and Eligible Entity shall each be responsible for the superVISIOn and

management of any contractor it engages to assist in the performance of the Services or

any obligation under this Agreement. HFA or Eligible Entity, as applicable, shall remove

and replace any contractor that it deems as failing to perfonn. HFA and Eligible Entity

shall each ensure that all of its contractors comply with the terms and provisions of this

Agreement. Each of HFA and Eligible Entity shall be responsible for the acts or

omissions of its respective contractors as if the acts or omissions were by the HFA or

Eligible Entity, respectively.

(10) HFA and Eligible Entity each covenants that it will timely inform Treasury of any

anticipated or actual Event of Default and of any suspected or actual Act of Bad Faith

(defined below).

(11) HFA and Eligible Entity each acknowledges that Treasury may be required to

respond, pursuant to the Privacy Act of 1974 (the "Privacy Act"), 5 U.S.C. § 552a, to

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TAMPA/HPA· North Carolinall21385, I
inquiries from borrowers and, pursuant to the Freedom of Information Act (the "Freedom

of Information Act"), 5 U.S.C. § 552, to inquiries from other parties, as well as formal

inquiries from Congressional committees and members, the Government Accounting

Office, Inspectors General and other government entities, as well as media and consumer

advocacy group inquiries about the HHF Program and its effectiveness. HFA and

Eligible Entity each covenants that it will respond promptly and accurately to all search

requests made by Treasury, comply with any related procedures which Treasury may

establish, and provide related training to employees and contractors.

(12) HFA and Eligible Entity each acknowledges that Treasury, SIGTARP, GAO and

other parties designated by Treasury or under Applicable Laws shall have the right during

normal business hours to conduct unannounced, informal onsite visits and to conduct

formal onsite and oflsite physical, personnel and information technology testing, security

reviews, and audits of HFA and/or Eligible Entity and to examine all books, records and

data related to the Services provided and Purchase Price received in connection with the

Services.

(13) HFA and Eligible Entity each covenants that it will promptly take corrective and

remedial actions associated with reporting and reviews as directed by Treasury or its

designee and provide to Treasury evidence of the effective implementation of corrective

and remedial actions as Treasury shall require. HFA and Eligible Entity each

acknowledges that Treasury may conduct additional reviews based on its findings and the

corrective actions taken by HFA and/or Eligible Entity.

(14) In addition to any obligation to retain financial and accounting records under

Applicable Laws, HFA and Eligible Entity each covenants to retain all data, books,

reports, documents, audit logs and records, including electronic records, or copies

thereof, related to its obligations under this Agreement and the performance of the

Services, as applicable. In addition, HFA and Eligible Entity each agrees to maintain a

copy of all computer systems and application software necessary to review and analyze

these electronic records or copies of such records. Unless otherwise directed by

Treasury, HFA and Eligible Entity shall each retain these records for at least three (3)

years from the End of Term, or for such longer period as may be required pursuant to

Applicable Laws. Treasury may also notify HFA and/or Eligible Entity from time to

time of any additional record retention requirements resulting from litigation and

regulatory investigations in which Treasury or any agents of the United States may have

an interest, and HFA and Eligible Entity each agrees to comply with these litigation and

regulatory investigations requirements. "End of Term" shall mean the date that the

Services performed under all Service Schedules are fully complete, excluding

administrative functions (e.g. the last homeowner is assisted and any loan provided to

such homeowner is either repaid or fully forgiven).

(15) HFA and Eligible Entity shall each provide a bring-down certificate as to its

continuing compliance with, and the truth and accuracy of, the representations and

warranties set forth in this Agreement and the Financial Instrument, as applicable,

annually, on each anniversary of the Effective Date during the Term (as defined below),

in the form attached hereto as Exhibit B-1 with respect to the HFA (the "HFA

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TAMPA/HPA North Carolinall21385.1
Certification") and Exhibit B-2 with respect to the Eligible Entity (the "Eligible Entity

Certification").

B. Eligible Entity. Additionally, Eligible Entity hereby makes 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 Eligible Entity. In the event that any of the representations or

warranties made herein ceases to be true and correct or Eligible Entity breaches any of its

covenants made herein, Eligible Entity agrees to notify Treasury immediately and the same

shall constitute an Event of Default hereunder.

(I) Eligible Entity constitutes a "financial institution" as such term is defined in

section 3(5) ofEESA, has the legal power to receive funds from Treasury under the HHF

Program, and has been designated by HFA to, and hereby agrees to, provide the Services

and implement HFA's proposal to Treasury under the HHF Program.

(2) Eligible Entity is established under the laws of the United States or any state,

territory, or possession of the United States or the District of Columbia, has significant

operations in the United States and is not an agency or instrumentality of, or owned

directly or indirectly by, any foreign government.

(3) Eligible Entity is duly formed and validly existing and has the full corporate

power and authority to enter into, execute, and deliver this Agreement, the Financial

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

this Agreement or the Financial Instrument, and to perform its obligations hereunder and

thereunder. Eligible Entity has, and its officers, employees, agents and contractors

providing the Services have, or will have prior to performing the Services, obtained all

licenses and any other approvals or consents required by law to carryon its business as

now being conducted and as contemplated by this Agreement.

C. HFA. Additionally, HFA hereby makes 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. In

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

correct or HFA breaches any of its covenants made herein, HFA agrees to notify Treasury

immediately and the same shall constitute an Event of Default hereunder.

(1) HFA is an instrumentality ofthe State as indicated in Schedule A.

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

Agreement and any other closing documentation delivered to Treasury in connection with

this Agreement, and to perform its obligations hereunder and thereunder.

D. Representations and Warranties. The foregoing representations and warranties set

forth in this Section 2 are hereby qualified and/or limited by the provisions set forth in

Schedule D attached hereto and incorporated herein.

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TAMPA/HPA - North Carolina!l21385.1
3. Agreement to Purchase Financial Instrument; Payment of Purchase Price; Grant of

Security Interest

A. Treasury shall purchase, and Eligible Entity shall sell to Treasury, the Financial

Instrument that is executed and delivered by Eligible Entity in the form attached hereto as

Exhibit A, in consideration for the payment by Treasury ofsuch amount as shall be set forth

in Schedule A as the Purchase Price (the "Purchase Price"). Payment of the Purchase Price

by Treasury shall be made in draws (each, a "Capital Draw" and collectively, the "Capital

Draws"). In order to make a Capital Draw, Eligible Entity shall submit to Treasury and its

designee a request for payment (a "Capital Draw Request") no less than ten (10) business

days prior to the date such Capital Draw is requested to be paid. Notwithstanding anything

in the Service Schedules to the contrary, Treasury shall not approve a Capital Draw Request

for a Capital Draw in an amount less than 2.5%, or more than 20%, of the Program

Participation Cap (defined below). In addition, no Capital Draw Requests shall be approved

by Treasury so long as Eligible Entity has HHF Program funds on hand of more than 5% of

the Program Participation Cap. The form of Capital Draw Request is attached hereto as

Exhibit C.

B. The conditions precedent Treasury's execution and delivery of this Agreement and

the payment by Treasury of the first Capital Draw are: (i) HFA's execution and delivery of

this Agreement with attached complete and approved Service Schedules, Exhibits and any

other closing documents, certificates or legal opinions as shall be required by Treasury to be

delivered by HFA; (ii) Eligible Entity's execution and delivery of this Agreement with

attached complete and approved Service Schedules, Exhibits, the Financial Instrument and

any other closing documents, certificates or legal opinions as shall be required by Treasury to

be delivered by Eligible Entity; (iii) the delivery of a legal opinion of counsel to HFA, which

may be internal legal counsel, in substantially the form attached hereto as Exhibit D-l; and

(iv) the delivery of a legal opinion of counsel to Eligible Entity, which may be internal legal

counsel, in substantially the form attached hereto as Exhibit D-2.

C. The conditions precedent to payment by Treasury of any subsequent Capital Draws

are: (i) delivery to Treasury and its designee of an executed and completed Capital Draw

Request using the form attached hereto as Exhibit C, without modification other than

completing requested information fields, and any certifications or information as may be

required by Treasury or its designee; (ii) the performance by Eligible Entity of the Services

described in the Service Schedules. in accordance with the terms and conditions of this

Agreement, to the satisfaction of Treasury; and (iii) the satisfaction by HFA and Eligible

Entity ofsuch other obligations as are set forth in this Agreement.

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

Purchase Price (the "Program Participation Cap"). Accordingly, 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 ofthe Program Participation Cap.

E. In the event of a discrepancy or error in the amount of the Purchase Price paid

hereunder, at Treasury's election, (i) Eligible Entity shall remit to Treasury the an10unt of

any overpayment within ten (10) business days of receiving a refund request from Treasury,

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or (ii) Treasury may offset the amount of the overpayment against the next Capital Draw,

upon written notice to Eligible Entity. It is understood that HFA shall not be required to

advance any funds pursuant to this subsection.

F. At the election of Treasury and with prior notice to Eligible Entity, Treasury may

deduct from any amount payable to Eligible Entity any amount that Eligible Entity or HFA is

obligated to reimburse Treasury or the United States government.

G. The proceeds of each Capital Draw shall be deposited in an account (the "Depository

Account") held by The Bank ofNew York Mellon or such other depository institution chosen

by Treasury in its sole discretion (the "Depository"), the account title, account number and

other identifying information for which are provided in Schedule A. The Depository

Account shall be used as Eligible Entity's operating account for its performance of the

Services and other obligations set forth in the Financial Instrument and this Agreement. As

security for the performance ofthe Services and the other obligations of Eligible Entity under

this Agreement and the Financial Instrument, Eligible Entity hereby grants to Treasury a first

lien priority security interest in the Depository Account and in any moneys, or investments, if

any, held therein. Eligible Entity shall enter into a deposit account control agreement with

Treasury and the Depository, in form and substance acceptable to Treasury. Eligible Entity

shall file a financing statement (and any continuation thereof required by law to maintain the

perfection of the lien) identifying Eligible Entity as "debtor," Treasury as "secured party"

and describing the Depository Account in the UCC filing office for perfecting nonpossessory security interests in tangible and intangible personal property of Eligible Entity or

such other filing offices as Treasury may require. Copies of all filings and continuation

statements shall be provided to Treasury promptly after filing. Funds held in the Depository

Account may be invested in: (i) Cash, (ii) bank deposits, (iii) United States Treasury

securities with maturities of not more than ninety (90) calendar days, (iv) money market

mutual funds that (a) are registered with the SEC and regulated under Rule 2a-7 promulgated

under the Investment Company Act of 1940 and (b) invested exclusively in direct obligations

of the United States of America or obligations the prompt payment of the principal of and

interest on which is unconditionally guaranteed by the United States of America and (v) any

other investment approved by Treasury in writing.

4. Oversight; Internal Control Program

A. HFA shall develop and maintain operational and performance metrics and maintain a

detailed financial reporting system to track, to the satisfaction of Treasury, homeowners

receiving assistance from Eligible Entity, including metrics used to measure the effectiveness

of the Services against the stated objectives of Treasury and HFA pursuant to the Service

Schedules. Such information shall be compiled into a report in a form that will be provided

by Treasury and may be modified from time to time as Treasury determines (the

"Performance Report"); provided that Treasury, in its sole discretion, may modify the form

of the Performance Report at any time. HFA shall submit the Performance Report to

Treasury or its designee on a periodic basis and as otherwise requested by Treasury and shall

also post the completed Performance Report to its website quarterly (based on a calendar

year) by the fifteenth (l5th) day of the second month following the end of such quarter.

Treasury, in its sole discretion, may request thatHFA modify its performance criteria or seek

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TAMPAlHPA - North Carolinal121385.1
additional metrics as necessary. Treasury may make any or all data reported by HFA

available to the public. It is Treasury's policy not to release personal indentifying

information in its possession unless required to do so by law.

B. Eligible Entity shall develop, enforce and review on a quarterly basis for

effectiveness, an internal control program designed to minimize the risk of fraud, mitigate

conflicts of interest, maximize operational efficiency and effectiveness and ensure effective

delivery of Services and compliance with this Agreement, EESA and Applicable Laws to the

satisfaction of Treasury (the "Internal Control Program"). The Internal Control Program

must include documentation of the control objectives for the Services, the associated control

techniques, and mechanisms for testing and validating the controls. Eligible Entity shall

monitor its contractors, if any, as part of the Internal Control Program. Eligible Entity shall

certify, and provide an independent verification of the effectiveness of the Internal Control

Program in accordance with a reporting form that will be provided by Treasury and may be

modified from time to time as Treasury determines, at least annually no later than one

hundred twenty (120) days after the end of Eligible Entity's fiscal year, including an

assessment prior to the initial distribution of funds to perform Services, or at a reasonable

time thereafter with the consent of Treasury, to ensure that Eligible Entity has taken

appropriate steps to meet the HHF Program objectives. Said independent verification may be

provided by a third party contractor or a governmental entity or department of the State so

long as such entity or department is separate and distinct from HFA and Eligible Entity (e.g.

the State Inspector General). Notwithstanding the foregoing, Eligible Entity shall be

permitted to seek approval from Treasury to make a Capital Draw to conduct a pilot or test of

certain or all ofthe Services prior to full launch ofthe same.

C. HFA and Eligible Entity acknowledge that Treasury may develop and implement

practices to monitor and detect fraud related to loan modifications and any other programs

contemplated pursuant to the Services and to monitor compliance with applicable consumer

protection and fair lending laws, including among other laws, the Applicable Laws. HFA

and Eligible Entity covenant that they will fully and promptly cooperate with Treasury's

inquiries about any alleged, perceived or actual fraud and comply with any anti-fraud and

legal compliance procedures which Treasury may require.

D. HFA and Eligible Entity covenant that they will together develop and implement an

internal control program to ensure that HHF Program participants are meeting program

requirements; to monitor, detect and prevent loan modification fraud; and to monitor

compliance with applicable laws and regulations, including consumer protection and fair

lending laws, among other things (the "Internal Antifraud and Compliance Monitoring

Program"). The Internal Antifraud and Compliance Monitoring Program shall be developed

and complete within ninety (90) days from the Effective Date, unless Treasury, in its sole

discretion, consents to an extension of such time period. A copy of the plan for the Internal

Antifraud and Compliance Monitoring Program, including, but not limited to, the approach,

tools, techniques, staffing, cost and status of and time to implcmentation shall be submitted

to Treasury within the time period set forth in the preceding sentence. HFA and Eligible

Entity acknowledge that the Internal Antifraud and Compliance Monitoring Program will be

monitored as provided in this Agreement. Each of HFA and Eligible Entity shall notify

Treasury in writing if it desires to make any material modifications to its Internal Antifraud

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TAMPA/HPA North Carolina/l21385.1
and Compliance Monitoring Program and the same shall be subject to Treasury's approval.

Additionally, HFA and Eligible Entity shall cooperate with Treasury with respect to its

findings and any inquiries based on any review by Treasury or its designee of the Internal

Antifraud and Compliance Monitoring Program or the results and data therefrom.

E. HFA and Eligible Entity shall provide Treasury or its designee with access to all

internal control reviews and reports that relate to the Services, including those proposed by

independent auditing firms, to enable Treasury to examine Eligible Entity and its contractors,

if any, for compliance with applicable provisions of EESA, the HHF Program, this

Agreement and Applicable Laws. A copy of the reviews and reports will be provided to

Treasury upon request.

F. HFA and Eligible Entity shall respond promptly to Treasury's request for information

regarding how the Eligible Entity's program(s) described in the Service Schedules will

interact with new or changed housing programs funded by EESA's Troubled Asset Relief

Program.

G. HFA shall provide annual audited financial statements to Treasury no later than one

hundred eighty (180) days after the end of its fiscal year, commencing with the first fiscal

year ending after the Effective Date. Eligible Entity shall provide (i) 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 (ii) annual

audited financial statements to Treasury no later than one hundred twenty (120) days after the

end ofits fiscal year, commencing with the first fiscal year ending after the Effective Date.

5. Term

A. The term of this Agreement 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 ofthe Services by Treasury. Notwithstanding the

foregoing, 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 ofthis Agreement or End of Term,

and that funds are to be reserved as set forth in Schedule C to pay for the cost ofthe same.

B. This Agreement, or any of the Services implemented under this Agreement, may be

terminated by Treasury prior to the end ofthe Term pursuant to Section 6 below.

6. Defaults, Acts of Bad Faith and Early Termination; Remedies for and Effects of

Defaults, Acts of Bad Faith and Early Termination

A. The following constitute events of default by HFA or Eligible Entity under this

Agreement (each, an "Event of Default" and, collectively, the "Events of Default"):

(l) HFA or Eligible Entity breaches a covenant under this Agreement or fails to

perform or comply with any of its obligations under this Agreement in any material

respect, including any additional request made by Treasury as authorized herein, or the

Financial Instrument, including, but not limited to, circumstances in which Eligible Entity

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TAMPAlHPA - North Carolina/I 21 385.1
fails to ensure that all eligibility criteria and other conditions precedent specified in this

Agreement or EESA are satisfied prior to accepting any portion of the Purchase Price

and/or etTectuating any Services in connection with the HHF Program.

(2) HFA is dissolved or its existence as a unit or instrumentality of state government

is terminated (unless HFA's duties, responsibilities and obligations as the state's housing

finance agency, including specifically its duties, responsibilities and obligations under

this Agreement, are transferred to and assumed by a successor state unit or

instrumentality ofstate government approved by Treasury).

(3) Eligible Entity is dissolved or its legal existence is terminated (unless Eligible

Entity's duties, responsibilities and obligations under this Agreement, are transferred to

and assumed by a successor entity approved by Treasury).

(4) HFA or Eligible Entity: (a) ceases to do business as a going concern; (b) makes a

general assignment for the benefit of, or enters into any arrangement with creditors in lieu

thereof; (c) admits in writing its inability to pay its debts as they become due; (d) files a

voluntary petition under any bankruptcy or insolvency law or files a voluntary petition

under the reorganization or arrangement provisions of the laws of the United States or

any other jurisdiction; (e) authorizes, applies for or consents to the appointment of a

trustee or liquidator of all or substantially all of its assets; (t) has any substantial part of

its property subjected to a levy, seizure, assignment or sale for or by any creditor or

governmental agency; or (g) enters into an agreement or resolution to take any of the

foregoing actions.

(5) HFA, Eligible Entity, any employee or contractor of HFA or Eligible Entity, or

any employee or contractor of HFA's or Eligible Entity's contractors, commits a grossly

negligent or reckless act, or willful or intentional misconduct (including, but not limited

to, misrepresentation or fraud) in connection with the performance ofthe Services or this

Agreement.

(6) Any representation or warranty made by HFA or Eligible Entity in this

Agreement or any other certification provided pursuant to this Agreement, is or becomes

false, misleading, incorrect, or incomplete in any material respect.

(7) Any failure to remit overpaid funds to Treasury in accordance with Section 3(D).

(8) An evaluation of performance that includes any specific findings by Treasury that

HFA's or Eligible Entity's perfomlance under any performance criteria set forth in the

Service Schedules is insufficient.

(9) Any misapplication of, or levy on, funds held in the Depository Account.

(10) An Act of Bad Faith (defined below) involving an HHF Recipient (defined below)

occurs, or is believed by Treasury to have occurred, in connection with the Services.

- 11 - rAMPA/HPA - North Carolinall21385.1
B. Treasury, in its sole discretion, may take any or all of the following actions upon the

occurrence of an Event of Default:

(I) Treasury may withhold some or all of the Purchase Price until, in Treasury's

determination, HFA and/or Eligible Entity (as the case may be) has cured such Event of

Default.

(2) Treasury may: (i) reduce the amounts payable to Eligible Entity under Section 3;

and/or (ii) obtain repayment of prior payments made to Eligible Entity under Section 3 to

the extent that such funds have not been expended or irrevocably committed by Eligible

Entity.

(3) Treasury may require HFA and/or Eligible Entity to submit to additional

administrative oversight, including, but not limited to, additional compliance controls and

quality control reviews.

(4) Treasury may terminate this Agreement and cease its performance hereunder.

(5) Treasury may require HFA and/or Eligible Entity to submit to additional

information and reporting requirements with respect to its financial condition and ability

to continue to meet its obligations under this Agreement.

C. The following constitute acts of bad faith ofservicers, lenders, borrowers, contractors

or any other recipient of HHF Program funds (individually, an "HHF Recipient" or

collectively "HHF Recipients") in connection with the Services (each, an "Act of Bad Faith"

and, collectively, the "Acts of Bad Faith"): an HHF Recipient commits a grossly negligent

act, willful or intentional misconduct, a reckless act (including, but not limited to,

misrepresentation or fraud), each in connection with any of the Services (including, but not

limited to, in connection with such HHF Recipient's response to questionnaires, the

execution or delivery to HFA or Eligible Entity or Treasury of any ofthe agreements relating

to such HHF Recipient's participation in the HHF Program and the production of supporting

documentation therefor and in connection with any audit or review by Treasury, its attorneys,

auditors or other consultants for compliance with the HHF Program requirements).

D. Treasury, in its sole discretion, may take any or all of the following actions if an Act

of Bad Faith involving an HHF Recipient occurs, or is believed by Treasury to have

occurred, in connection with the Services:

(l) Treasury may withhold all or any portion of the Purchase Price until, in

Treasury's determination, the Act of Bad Faith has been cured or otherwise remedied to

Treasury's satisfaction.

(2) Treasury may: (i) reduce the amounts payable to Eligible Entity under Section 3;

(ii) obtain repayment of any or all prior payments made to Eligible Entity under Section 3

to the extent that such funds have not been expended or irrevocably committed by HFA

or Eligible Entity; and/or (iii) work with Eligible Entity to obtain repayment from the

HHF Recipients who have committed the Act of Bad Faith.

- 12 - TAMPA/IIPA North Carolina/l21385.1
(3) Treasury may require HFA or Eligible Entity to submit to additional

administrative oversight, including, but not limited to, additional compliance controls and

quality control reviews.

(4) Treasury may terminate this Agreement and cease its performance hereunder if

Treasury believes that Acts of Bad Faith occur on a recurring basis, are widespread

among the HHF Recipients, or occur in combination or in connection with one or more

Events of Default by HFA or Eligible Entity.

(5) Treasury may require HFA and/or Eligible Entity to submit to additional

information and reporting requirements with respect to its financial condition and ability

to continue to meet its obligations under this Agreement.

E. In addition to the termination rights set forth above, Treasury may terminate this

Agreement immediately upon written notice to Eligible Entity:

(I) in the event of a merger, acquisition, sale of substantially all assets or other

change of control of Eligible Entity;

(2) in the event that a material term of this Agreement is determined to be prohibited

or unenforceable as referred to in Section 13.C; or

(3) in the event the Financial Instrument is deemed to be unenforceable in its entirety.

F. In the event that this Agreement is terminated in connection with an Event of Default

by HFA or Eligible Entity, no portion of the Purchase Price will be paid to Eligible Entity

subsequent to termination.

G. Treasury may reduce the amounts payable to Eligible Entity under Section 3, or

obtain repayment of prior Capital Draws made, in connection with: (a) an evaluation of

HFA's and Eligible Entity's performance that includes any specific findings that HFA's or

Eligible Entity's performance under any performance criteria set forth in the Service

Schedules is materially insufficient, or (b) any failure by HFA or Eligible Entity to comply

materially with any directive issued by Treasury with respect to documents or data requested,

findings made, or remedies established, by Treasury in conjunction with such performance

criteria or other HHF Program requirements; provided, however, Treasury will seek to obtain

repayment of prior Capital Draws made under Section 3 only with respect to Services that are

determined by Treasury to have been impacted by, or that Treasury believes may have been,

or may be, impacted by, the findings giving rise to this remedy. Treasury may initially avail

itself of this remedy in lieu of a specific declaration of an Event of Default; provided,

however, that doing so shall not preclude Treasury from later declaring an Event of Default

or exercising any other rights or remedies otherwise available to it under this Section 6, or at

law or in equity, in connection with the event giving rise to this remedy, or any future events

giving rise to this remedy. Notwithstanding anything in this Agreement to the contrary,

Treasury may withhold payment of all or a portion of the Purchase Price if it determines, in

its sole discretion, that Eligible Entity is incapable of performing the Services. It is

understood that HFA shall not be required to advance or repay funds to Treasury unless and

only to the extent that, HFA has received HHF Program funds from Eligible Entity and the

- 13 - TAMPA/IIPA - North CarolinaiJ2J385. J
same would not cause HFA to violate state law or its enabling legislation or governing

documents, as applicable, to do so.

H. The remedies available to Treasury upon an Event of Default or an Act of Bad Faith

under this Section are cumulative and not exclusive; further, these remedies are in addition

to, and not in lieu ot~ any other remedies available to Treasury at law or in equity.

I. In the event of the expiration or termination of this Agreement or any Service

implemented under this Agreement under any circumstances, HFA, Eligible Entity and

Treasury agree to cooperate with one another on an ongoing basis to ensure an eflective and

orderly wind-down of the Services, including the provision of any information, reporting,

records and data required hereunder by Treasury.

J. Notwithstanding any provision to the contrary in this Agreement, temporary or

permanent forbearance on Capital Draws of funds by the Eligible Entity shall not, in and of

itself, constitute an Event of Default or an Act of Bad Faith by the HFA or the Eligible Entity

nor trigger a demand for repayment under this Section. The HFA or the Eligible Entity shall

provide Treasury with timely notice of any determination that such forbearance is necessary

and in such event Treasury may elect to reduce the Purchase Price to the aggregate of Capital

Draw Requests funded to date plus an amount for Administrative Expenses reasonably

required to comply with the surviving terms ofthis Agreement.

7. Governing Law; Venue

This Agreement shall be governed by and construed under Federal law and not the law of any

state or locality, without reference to or application of the conflicts of law principles; provided,

however, that the powers and authority of the HFA shall be governed by and construed in

accordance with the laws of its state. Any and all disputes between the parties that cannot be

settled by mutual agreement shall be resolved solely and exclusively in the United States Federal

courts located within the District of Columbia. All parties hereto consent to the jurisdiction and

venue ofsuch courts and irrevocably waive any objections thereto.

8. Notices

All legal notices, reports, requests, demands and other communications under this Agreement

shall be in writing and referred to each party's point of contact or to such other point of contact

at such other address as may be designated in writing by such party. Notices, reports, requests,

demands and other communications sent to Treasury shall be sent by email to all of the email

addresses listed below. Performance Reports and Capital Draw Requests shall be sent to Bank of

New York Mellon only by email at the address listed below. The names and addresses of HFAs

and Eligible Entity's points of contact are set forth in Schedule A. All such notices under this

Agreement sent to HFA or Eligible Entity shall be considered received: (a) when personally

delivered; (b) when delivered by commercial overnight courier with verification receipt; (c) three

(3) days after having been sent, postage prepaid, via certifIed mail, return receipt requested; or

(d) upon sending an email.

- 14 -

TAMPA/HPA - North Carolina/I 21385. I
Treasury Email Addresses: OFSChiefCounselNotices@do.treas.gov

HFAInnovation@do.treas.gov

tarp.compliance@do.treas.gov

Bank of New York Mellon: tarpcppclosing@bnymellon.com

9. Modifications

A. Subject to Section 9.B., modifications to this Agreement shall be in writing and

signed by Treasury, HFA and Eligible Entity.

B. Treasury reserves the right to unilaterally modify or supplement the terms and

provisions of this Agreement that relate (as determined by Treasury, in its discretion) to the

compliance and performance requirements of the HHF Program, and/or to technical,

administrative, or procedural matters or compliance and reporting requirements that may

impact the administration of the HHF Program. For the avoidance of doubt, reasonable

incremental administrative expenses of the HFA or Eligible Entity associated with such a

modification or supplement shall be Permitted Expenses.

C. In the event that Treasury agrees that (i) Eligible Entity may provide additional

services under the HHF Program (a "New Service"), or (ii) the Services described in the

Service Schedules shall be modified in any way, a replacement service schedule describing

such additional or modified services, in substantially the form of the Service Schedules shall

be executed and delivered by Eligible Entity. Concurrently with the delivery ofsuch service

schedule, HFA and Eligible Entity shall execute and deliver any such certificates, documents

and/or legal opinions as may be required by Treasury. No additions, modifications or

amendments to the Services shall be made without Treasury's prior approval. Additionally,

Eligible Entity may not propose any New Service after September 1, 2010 without

Treasury's and the Office of Management and Budget's consent, which may be withheld in

either party's sole discretion.

10. Publicity

HFA and Eligible Entity shall consult with Treasury to develop a communication and outreach

strategy to ensure that any public messages related to the Services is consistent with the intent of

the HHF Program. HFA, Eligible Entity and their respective affiliates, subcontractors or

servicers shall notify Treasury at least two (2) business days in advance and provide a copy of

any proposed press releases (or other public statements) that refers to the HHF Program, their

participation therein or the results thereof. Treasury shall have the right to object to or modify

such press release or statement, in its sole discretion. In the event Treasury does not respond to

the press release or statement within such two (2) business day period then it shall be deemed

permissible to publish. This Section shall survive the termination or expiration of this

Agreement.

11. Limitation of Liabilitv

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

AFFILIATES BE LIABLE TO ELIGIBLE ENTITY WITH RESPECT TO THE SERVICES OR

- 15 - rAMPAlHPA - North Carolinall21385.1
THIS 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 THIS AGREEMENT.

12. Indemnification

HFA and Eligible Entity agree respectively as set forth on Schedule E attached hereto and

incorporated herein.

13. Miscellaneous

A. The recitals set forth at the beginning ofthis Agreement are true and accurate and are

incorporated herein by this reference.

B. This Agreement is not a Federal procurement contract and is therefore not subject to

the provisions of the Federal Property and Administrative Services Act (41 U.S.c. §§ 251-

260), the Federal Acquisition Regulations (48 CFR Chapter 1), or any other Federal

procurement law.

C. Any provision ofthis Agreement 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 this

Agreement, and no such prohibition or unenforceability in any jurisdiction shall invalidate

such provision in any other jurisdiction.

D. Failure on the part of Treasury to insist upon strict compliance with any of the tem1S

hereof shall not be deemed a waiver, nor will any waiver hereunder at any time be deemed a

waiver at any other time. No waiver will be valid unless in writing and signed by an

authorized officer of Treasury. No failure by Treasury to exercise any right, remedy, or

power hereunder will operate as a waiver thereof or operate as a course of dealing as to

which Eligible Entity may justifiably rely. The rights, remedies, and powers provided herein

are cumulative and not exhaustive of any rights, remedies, and powers provided by law.

E. This Agreement shall inure to the benefit of and be binding upon the parties to this

Agreement, and their permitted successors-in-interest. Treasury shall be permitted to assign

its interest in this Agreement without the prior consent of HFA or Eligible Entity. Neither

HFA, nor Eligible Entity shall be permitted to assign its interest in this Agreement without

the prior written consent of Treasury, which may be withheld in Treasury's sole discretion.

F. This Agreement may be executed in two or more counterparts (and by different

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

- 16 - TAMPA/HPA - North Carolina/l 21385. I
shall constitute one and the same instrument. Facsimile or electronic copies of this

Agreement, together with the Financial Instrument, the Service Schedules, and any

certifications provided hereunder, shall be treated as originals for all purposes.

G. This Agreement, together with the Financial Instrument, Service Schedules, and the

Certifications, constitutes the entire agreement of the parties with respect to the subject

matter hereof.

H. Any provisions ofthis Agreement (including all documents incorporated by reference

thereto) that contemplate their continuing effectiveness, including, but not limited to,

Sections 2, 3, 4, 7. 10, 11, 12 and 13 of this Agreement, and the Financial Instrument, and

any other provisions (or portions thereot) in this Agreement that relate to, or may impact, the

ability of Treasury to fulfill its responsibilities in connection with the HHF Program, shall

survive the expiration or termination ofthis Agreement.

14. Defined Terms; Incorporation by Reference

A. All references to this "Agreement" necessarily include, in all instances, this

Agreement and all documents, exhibits and schedules incorporated into this Agreement by

reference, whether or not so noted contextually, and all amendments and modifications

thereto. Specific references throughout this Agreement to individual documents that are

incorporated by reference into this Agreement are not inclusive of any other documents that

are incorporated by reference, unless so noted contextually.

B. The term "Effective Date" means the date indicated as the Closing Date on Schedule

A.

C. Exhibit A - Form of Financial Instrument, Exhibits B-1 and B-2 - Forms of

Certification, Exhibit C - Form of Capital Draw Request, Exhibit D-I - Form of Legal

Opinion - FHA, Exhibit D-2 - Form of Legal Opinion - Eligible Entity (in each case, in form

and, upon completion, in substance), Schedule A - Basic Information, Schedule B - Service

Schedules, Schedule C - Permitted Expenses, Schedule D - Qualifications to Representations

and Warranties, Schedule E - Indemnification, including all amendments and modifications

thereto, are incorporated into this Agreement by this reference and given the same force and

effect as though fully set forth herein.

[SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE

INTENTIONALLY LEFT BLANK]

- 17 - TAMPA/HPA - North Carolinal121385.1
[n Witness Whereof, HFA, Eligible Entity and Treasury by their duly authorized officials

hereby execute and deliver this Commitment to Purchase Financial Instrument and HFA

Participation Agreement as ofthe Effective Date.

HFA:

NORTH CAROLINA HOUSING FINANCE

AGENCY

By: /s/ AR Kucab

Name: AR Kucab

Title: Executive Director

ELIGIBLE ENTITY:

NORTH CAROLINA HOUSING FINANCE

AGENCY

By: /s/ AR Kucab

Name: AR Kucab

Title: Executive Director

TREASURY:

UNITED STATES DEPARTMENT OF THE

TREASURY

By:

Name: Herbert M. Allison, Jr.

Title: Assistant Secretary for

Financial Stability

[Signature Page to Commitment to Purchase Financial Instrument and IIFA Participation Agreement - North Carolina]
In Witness Whereof, HFA, Eligible Entity and Treasury by their duly authorized officials

hereby execute and deliver this Commitment to Purchase Financial Instrument and HFA

Participation Agreement as ofthe Effective Date.

HFA:

NORTH CAROLINA HOUSING FINANCE

AGENCY

By:

Name:

Title:

ELIGIBLE ENTITY:

NORTH CAROLINA HOUSING FINANCE

AGENCY

By:

Name:

Title:

TREASURY:

UNITED STATES DEPARTMENT OF THE

TREASURY

By:

Name: Herbert M. Allison, 1

Title: Assistant SecretarY, r

Financial Stability

[Signature Page to Commitment to Purchase Financial Instrument and HFA Participation Agreement - North Carolina]
Exhibit A

Exhibit B-1

Exhibit B-2

Exhibit C

Exhibit 0-1

Exhibit 0-2

Schedule A

Schedule B

Schedule C

Schedule 0

Schedule E

EXHIBITS AND SCHEDULES

Form of Financial Instrument

Form of HFA Certification

Form of Eligible Entity Certification

Form ofCapital Draw Request

Form of Legal Opinion - HFA

Form of Legal Opinion - Eligible Entity

Basic Information

Service Schedules

Permitted Expenses

Qualifications to Representations and Warranties

Indemnification

rAMPA/HPA· North Carolinal121385.1
EXHIBIT A

FORM OF FINANCIAL INSTRUMENT

This 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 "Agreement"), entered into as of the Effective Date, by and among the United

States Department of the Treasury ("Treasury"), the party designated as HFA in the Agreement

("HFA") and Eligible Entity. This Financial Instrument is etTective as of the Effective Date. All

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

them in the Agreement.

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 ofthe 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) ofthe Agreement.

(b) This 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 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 (P.L. 110-343), as amended, as the same may be

amended from time to time ("EESA").

2. Repayment of Purchase Price. In the event a recipient of HHF Program funds repays any

or all of the funds received from Eligible Entity in connection with the Services, Eligible

Entity shall use such funds as follows:

(a) First, if such funds are repaid on or prior to December 31, 2017, Eligible Entity

may use such repaid funds to continue to provide Services to other eligible

homeowners up to and including December 31, 2017 or retain such repaid funds

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

~~;!ill~~ 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.

(b) Second, if such funds are repaid on or prior to December 31, 2017 and Eligible

Entity is no longer providing the Services to new homeowners and the Permitted

TAMPA/HPA - North CarolinalI21385.1
Expenses have been fully funded, then Eligible Entity shall remit such funds to

Treasury, monthly on the 15th day of each month or first business day thereafter.

(c) Third, if such funds are repaid after December 31, 2017, Eligible Entity shall

remit such funds to Treasury, monthly on the 15th day of each month or first

business day thereafter.

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

including, but not limited to, excess cash and amounts on deposit in the administrative

reserve, as of December 31, 2017, such funds shall be returned to Treasury or its designee

prior to 1:00 p.m. Eastern Standard Time on December 31,2017.

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 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.

TAMPA/HPA - North Carolinall21385.1
7. Indemnification

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

hereby incorporated into this Financial Instrument by reference.

IN WITNESS WHEREOF, Eligible Entity hereby executes this Financial Instrument on the date

set forth below.

[INSERT FULL LEGAL NAME OF ELIGIBLE ENTITY]

By:

Name: ----------- Title:

Date: ______,2010

TAMPA/HPA - North Carolina/I 21 3851
EXHIBIT B-1

FORM OF HFA CERTIFICATION

This Certification is delivered as required by Section 2.A( 15) of that certain Commitment to

Purchase Financial Instrument and HFA Participation Agreement (the "Agreement"), effective as

of [INSERT CLOSING DATE], by and among the United States Department of the Treasury

("Treasury"), the undersigned party ("HFA") and the institution party thereto ("Eligible Entity").

All terms used, but not defined herein, shall have the meanings ascribed to them in the

Agreement.

HFA hereby certifies, represents and warrants as of the date hereof that each of the

representations and warranties of HFA contained in the Agreement are true, correct, accurate and

complete in all material respects as of the date hereof. All covenants of HFA contained in the

Agreement shall remain in full force and effect and HFA is not in breach of any such covenant.

Eligible Entity does not have HHF Program funds on hand of more than

[INSERT AN AMOUNT EQUAL TO 5% OF THE PROGRAM PARTICIPATION CAP]

HFA knows of no material deficiencies in the Internal Antifraud and Compliance Monitoring

Program.

In the event that any part ofthe certification made herein is discovered not to be true and correct,

HFA agrees to notify Treasury immediately.

[INSERT FULL LEGAL NAME OF HFA]:

[Name of Authorized Official]

[Title of Authorized Official]

TAMPAlHPA - North Carolinall21385I

Date
EXHIBIT B-2

FORM OF ELIGIBLE ENTITY CERTIFICATION

This Certification is delivered as required by Section 2.A(l5) of the Commitment to Purchase

Financial Instrument and HFA Participation Agreement (the "Agreement"), effective as of

[INSERT CLOSING DATE], by and among the United States Department of the Treasury

("Treasury"), the party designated as HFA in the Agreement and the undersigned party ("Eligible

Entity"). All terms used, but not defined herein, shall have the meanings ascribed to them in the

Agreement.

Eligible Entity hereby certifies, represents and warrants as of the date hereof that each of the

representations and warranties of Eligible Entity contained in the Agreement are true, correct,

accurate and complete in all material respects as of the date hereof. All covenants of Eligible

Entity contained in the Agreement shall remain in full force and effect and Eligible Entity is not

in breach of any such covenant.

Eligible Entity does not have HHF Program funds on hand of more than

[INSERT AN AMOUNT EQUAL TO 5% OF THE PROGRAM PARTICIPATION CAP]

Eligible Entity knows of no material deficiencies in the Internal Control Program or the Internal

Antifraud and Compliance Monitoring Program.

In the event that any part ofthe certification made herein is discovered not to be true and correct,

Eligible Entity agrees to notify Treasury immediately.

[INSERT FULL LEGAL NAME OF ELIGIBLE ENTITY]:

[Name ofAuthorized Official]

[Title ofAuthorized Official]

TAMPA/HPA - North Carolinall21385.1

Date
EXHIBIT C

FORM OF CAPITAL DRAW REQUEST

[insert date]

The Bank ofNew York Mellon

tarpcppclosing@bnymellon.com

Attn: Matthew Sabino

The United States Department ofthe Treasury

OFSChiefCounseINotices@do.treas.gov

HFAInnovation@do.treas.gov

tarp.compliance@do.treas.gov

Attention: HFA Hardest Hit Fund

Ladies/Gentlemen:

Reference is made to the Commitment to Purchase Financial Instrument and HFA

Participation Agreement dated as of the date set forth on Schedule A thereto (as amended,

supplemented or otherwise modified and in effect from time to time, the "HPA") by and among

[insert HFA name] ("HFA"), [insert Eligible Entity name] ("Eligible Entity") and the United

States Department of the Treasury ("Treasury"). Reference is also made to the Financial

Instrument dated the date set forth on Schedule A to the HPA delivered by Eligible Entity to

Treasury (the "Financial Instrument"). Capitalized terms used but not otherwise defined herein

shall have the meaning given them in the HPA.

In accordance with Section 3.A. of the HPA, the undersigned Eligible Entity hereby

requests that The Bank of New York Mellon ("BNYM"), on behalf of Treasury, disburse the

amounts set forth on the attached Capital Draw Schedule as a Capital Draw against the Purchase

Price as described in the HPA to Eligible Entity on [insert date] (the "Funding Date").

HFA and Eligible Entity, as applicable, hereby certify to Treasury and BNYM, as of the

date hereof and on the Funding Date, that:

(a) no default or Event of Default has occurred and is continuing as of the date hereof

and on the Funding Date [other than -'

(b) each of the representations and warranties made by HFA and Eligible Entity in the

HPA and Financial Instrument are true and correct on and as ofsuch date, as if made

on and as ofthe date hereof and on the Funding Date [other than .~,

(c) HFA and Eligible Entity are in compliance with the covenants and other agreements

set forth in the HPA and Financial Instrument, which shall remain in full force and

effect [other than .~,

TAMPA/!lPA - North CarolinalJ21385. J
(d) all data and information set forth in this Capital Draw Request, including the Capital

Draw Schedule, is true and correct in all respects; and

(e) to our knowledge, there have been no Acts of Bad Faith by any HHF Recipient [other

than -------'"

In the event that any part of the certification made herein is discovered not to be true and

correct after the date hereof~ HFA or Eligible Entity, as applicable, shall notify Treasury

immediately.

[INSERT FULL LEGAL NAME OF HFA]

[Name ofAuthorized Official]

[Title ofAuthorized Official]

[INSERT FULL LEGAL NAME OF ELIGIBLE ENTITY]

[Name of Authorized Official]

[Title ofAuthorized Official]

rAMPA/HPA - North Carolina/121385I
CAPITAL DRAW SCHEDULE

Capital Draw Request for:

r ) Program $

[ ] Program $

[ ] Program $

Permitted Administrative Expenses $.

Total Capital Draw Request $.

Total Capital Draw Request as a Percentage of Program Participation CapI: %

Total Purchase Price funded to date, including current Capital Draw: $

Program Participation Cap: $

Program Funds Remaining: $

Amount of HHF Program funds on hand prior to this Capital Draw: $

HHF Program funds on hand prior to this Capital Draw as a Percentage of %

Program Participation Cap2:

I May not be less than 2.5% nor exceed 20%.

2 May not exceed 5.0% on the date ofsubmission ofthe Draw Request.

Depository Account InformationlWire Instructions

for payment of Capital Draw:

TAMPA/IIPA - North CarolinaJl21385.1
EXHIBIT D-l

FORM OF LEGAL OPINION - HFA

[Customary introduction!qualifications]

1. HFA has been duly created and is validly existing as a under the laws of the

State

2. HFA has duly authorized the execution and delivery ofthe Agreement, and no further approval or

authorization is required by HFA.

3. HFA has the power and authority to execute and deliver the Agreement and to perforn1 its

obligations thereunder.

4. The Agreement has been duly executed and delivered by HFA and, assuming due authorization,

execution and delivery by the other parties thereto, constitutes a valid, legal and binding obligation of

HFA, enforceable against HFA in accordance with its terms, except as the same may be limited by

applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement

of creditors' rights generally and general equitable principles, regardless of whether such enforceability is

considered in a proceeding at law or in equity.

5. The execution and delivery by HFA of the Agreement and the performance by HFA of its

obligations thereunder do not and will not: (i) violate the [organizational documents/Enabling Act] of

HFA, (ii) to the best of our knowledge, after due inquiry, constitute a breach of or a default under any

agreements or other instruments to which HFA is a party, (iii) to the best of our knowledge, after due

inquiry, violate any judgment, decree or order of any court or administrative tribunal to which HFA is

subject, or (iv) violate any Applicable Laws.

6. No consent, approval, authorization or other action by, or filing or registration with, any

governmental authority of the United States or the State of or any other entity having

jurisdiction over HFA is required to be obtained prior to the execution and delivery of the Agreement or

to perform the obligations contemplated thereby other than those consents, approvals, authorizations,

filings, actions and registrations which have been obtained as ofthe date hereof.

7. HFA has obtained all necessary permits and licenses to perform its obligations under the

Agreement.

8. There is no action, suit or proceeding, at law or in equity, or by or before any court or

governmental agency, now pending or, to our knowledge, overtly threatened in writing against HFA that

challenges the validity or enforceability ot: or that seeks to enjoin the performance of: or seeks damages

with respect to the Agreements or any ofHFA's obligations thereunder.

TAMPA/HPA - North CarolinalI21385.1
EXHIBIT D-2

FORM OF LEGAL OPINION - ELIGIBLE ENTITY

[Customary introduction/qualifications]

1. Eligible Entity has been duly incorporated and is validly existing as a and

is in good standing under the laws ofthe State

2. Eligible Entity has duly authorized the execution and delivery of the Agreement and the Financial

Instrument by all necessary [corporate] action, and no further approval or authorization is required by

Eligible Entity.

3. Eligible Entity has the power and authority to execute and deliver the Agreement and the Financial

Instrument and to perform its obligations thereunder.

4. Each of the Agreement and the Financial Instrument has been duly executed and delivered by

Eligible Entity and, assuming due authorization, execution and delivery by the other parties thereto, each

constitutes a valid, legal and binding obligation of Eligible Entity, enforceable against Eligible Entity in

accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency,

reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and

general equitable principles, regardless of whether such enforceability is considered in a proceeding at

law or in equity.

5. The execution and delivery by Eligible Entity of the Agreement and the Financial Instrument and

the performance by Eligible Entity of its obligations thereunder do not and will not: (i) violate the

[organizational documents] of Eligible Entity, (ii) to the best of our knowledge, after due inquiry,

constitute a breach of or a default under any agreements or other instruments to which Eligible Entity is a

party, (iii) to the best of our knowledge, after due inquiry, violate any judgment, decree or order of any

court or administrative tribunal to which Eligible Entity is subject, or (iv) violate any Applicable Laws.

6. No consent, approval, authorization or other action by, or filing or registration with, any

governmental authority of the United States or the State of or any other entity having

jurisdiction over Eligible Entity is required to be obtained prior to the execution and delivery of the

Agreement and the Financial Instrument or to perform the Services contemplated thereby other than those

consents, approvals, authorizations, filings, actions and registrations which have been obtained as of the

date hereof.

7. Eligible Entity has obtained all necessary permits and licenses to perform the Services it IS

obligatcd to perform under the Agreement.

8. There is no action, suit or proceeding, at law or in equity, or by or before any court or

governmental agency, now pending or, to our knowledge, overtly threatened in writing against Eligible

Entity that challenges the validity or enforceability of, or that seeks to enjoin the performance of: or seeks

damages with respect to, the Agreement, the Financial Instrument or the Services.

TAMPA/IIPA • North Carolinal121385.1
SCHEDULE A

BASIC INFORMATION

Eligible Entity Information:

Name ofthe Eligible Entity:

Corporate or other organizational form:

Jurisdiction of organization:

Notice Information:

HFA Information:

Name ofHFA:

Organizational form:

North Carolina Housing Finance Agency]

a body politic and corporate under the laws

of the State ofNorth Carolina pursuant to N.

C. G. S. Chapter l22A

North Carolina

North Carolina Housing Finance Agencyl

a body politic and corporate under the laws

ofthe State ofNorth Carolina pursuant to N.

C. G. S. Chapter I22A

[continued onfollowing page}

I References in the Agreement to the term "HFA" shall mean the North Carolina Housing Finance Agency

("NCHFA") in its capacity as HFA as such term is used in the Agreement; and references in the Agreement to the

term "Eligible Entity" shall mean NCHFA, in its capacity as Eligible Entity as such term is used in the Agreement.

Notwithstanding anything to the contrary in the Agreement, (A) for purposes of Section 4(0) thereof, annual audited

financial statements shall be due no later than one hundred eighty (180) days after the end ofNCHFA's fiscal year,

and (B) for purposes of Section 7 thereof, the powers and authority ofNCHFA shall be governed by and construed

in accordance with the laws ofthe State of North Carolina.

TAMPA/HPA - North Carolina/l21385.1
Date of Application: June 1,2010

Notice Information: Same as notice information for Eligible Entity.

Program Participation Cap: $159,000,000.00

Closing Date: August 3, 20 I0

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.

TAMI'A/HI'A - North Carolina/121385I
SCHEDULEB

SERVICE SCHEDULES

The attached Service Schedules (numbered sequentially as Service Schedule 8-1, Service

Schedule 8-2, et. seq.) together comprise Schedule 8 to that certain Commitment to Purchase

Financial Instrument and HFA Participation Agreement, entered into as of the Effective Date, by

and among the United States Department ofthe Treasury and the undersigned parties.

TAMPA/HPA - North Carolina/l21385 I
1. Program Overview

2. Program Goals

3. Target Population!

Areas

4. Program Allocation

(Excluding

Administrative

Expenses)

SERVICE SCHEDULE B-1

NCHFA Mortgage Payment Program (MPP)

Summary Guidelines

North Carolina has one of the highest unemployment rates in the

country with more than 490,000 people out of work as of April

2010. Because unemployed homeowners are not eligible for most

loss mitigation programs, NCHFA proposes to use a majority of

our HFA Hardest Hit Funds (HHF) to create the Mortgage

Payment Program (MPP).

This program will provide loans to unemployed homeowners and

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

to make their mortgage payments and are in danger of losing their

homes to foreclosure. Loan proceeds will be used to pay

mortgage and mortgage-related expenses (i.e. property taxes,

homeowner insurance, homeowner dues) until the homeowner

secures employment or completes training for a new career.

To assist 5,750 homeowners over the next 3 years. The following

types of assistance will be provided:

Job Search or Short-term Assistance

to help homeowners while they look for a new job.

Job Training or Long-term Assistance

to help homeowners while they complete a job training/education

program to help secure a new job.

Reinstatement Only or One-time Assistance

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

bring their mortgage current.

Homeowners who are unemployed, suffered another temporary

hardship, and/or reemployed but need help bringing their

mortgage current.

This Program will be available in all North Carolina counties.

NCHFA will provide additional assistance over a longer period of

time to eligible homeowners living in targeted or "hardest hit"

counties, those with 2009 unemployment rates greater than or

equal to 11.3%.

$115,000,000

TAMPA/HPA - North Carolina/121385.1
5. Borrower Eligibility

Criteria

6. Property/Loan

Eligibility Criteria

7. Program Exclusions

TAMPA/HPA North Carolinal121385.1

Unemployed homeowners, and others, who through no fault of

their own, are unable to make their mortgage payments and are at

risk of a foreclosure. Homeowners will be required to provide a

financial hardship affidavit with appropriate documentation on

the cause of their hardship. For most homeo\vners, this will be

documentation from the Employment Security Commission

(ESC) confirming a job loss and receipt of unemployment

benefits. If information from ESC is unavailable a notarized

letter from the former employer indicating job loss was not the

fault of the borrower will serve as a substitute. Self Employed

borrowers will be required to submit prior tax returns to show a

loss of income.

Employed homeowners who are delinquent because of a prior job

loss or other program eligible hardship but who can resume future

payments without additional assistance.

Satisfactory mortgage payment history pnor to the job

loss/income loss.

Borrowers must meet program underwriting criteria.

Eligibility for program assistance will be determined primarily by

participating foreclosure prevention partners.

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

basis.

Existing single-family homes or condominiums (attached or

detached) including manufactured homes on foundations

permanently affixed to real estate owned by the borrower.

North Carolina owner-occupied, primary residences only.

Combined Loan- to-Value cannot exceed 125%

Principal, Interest, Taxes and Insurance >31% of household

income after job loss/loss of income.

Total Unpaid Principal Balances> $275,000

Manufactured homes not considered real property

Non-legal U.S. resident
8. Structure of Assistance 10 year, 0% interest, non-recourse, deferred-payment forgivable

subordinate loan. A forgiveness clause will reduce the loan

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

home after five years. At the end ofthe 10 years the note will be

considered satisfied and NCHFA will release the lien securing the

note.

Loan funds are due and payable if property is sold, refinanced or

no longer owner occupied (unless otherwise prohibited under

applicable federal law). Loans are repayable only from proceeds

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

refinanced and has not increased in equity to the degree necessary

to repay the note, all or a portion ofthe note will be forgiven.

All deterred, subordinate mortgages will be evidenced by a

promissory note and secured by a deed oftrust on the property.

Borrowers will be required to sign and acknowledge via Written

Agreement indicating the program guidelines.

Any funds returned according to established program guidelines

will be recaptured and used to assist additional homeowners

through December 31, 2017. After December 31, 2017 the funds

will be returned to Treasury.

9. Per Household

Assistance

10. Duration of Assistance

11. Estimated Number of

Participating

Households

TAMPA/HPA - North Carolina!l2!385.!

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

Targeted Counties (2009 Unemployment Rate::: 11.3%):

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

per household

Non-Targeted Counties (2009 Unemployment Rate <11.3%):

Maximum assistance up to $24,000 and not to exceed 24 months

per household

Targeted Counties (2009 Unemployment Rate> 11.3%):

Up to 36 months for those injob training/education program

Up to 18 months for those in a job search

Non-targeted Counties (2009 Unemployment Rate < 11.3%):

Up to 24 months for those in job training/education program

Up to 12 months for those in ajob search

5,750 homeowners over the next 3 years

Estimated number served based on average loan amount of

$20,000 per homeowner.
12. Program Inception/

Duration

13. Program Interactions

with Other Programs

(e.g. other HFA

programs)

14. Program Interactions

with HAMP

Program will startup within 45-90 days of Treasury approval and

will last up to 3 years.

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

needed and appropriate. For example, a borrower can receive

MPP assistance while they look for a new job and then receive

Second Mortgage Refinance Program or Permanent Loan

Modification Program assistance once they secure a new job.

The MPP would help borrowers who need more than the 3-6

months of assistance available through the new Home Affordable

Unemployment Program (UP), scheduled to be available on July

1,2010.

Borrowers who are eligible for MPP would not be required to

participate in UP prior to receiving assistance with MPP.

In addition, MPP would also help borrowers who don't qualify

for assistance under the new UP because they are more than 3

months behind in mortgage payments and/or they are not

currently receiving unemployment (i.e. self employed

homeowners).

Finally, borrowers can receive HAMP assistance prior to or after

receiving Hardest-Hit Fund assistance. For example, a borrower

may receive UP assistance for 3-6 months and then receive MPP

assistance for several more months, if needed.

Once MPP assistance has ended, a borrower may be eligible to

receive a loan modification from HAMP, if needed, and eligible.

15. Program Leverage with None

Other Financial

Resources

TAMPA/IlPA North Carolina/I21385.1
SERVICE SCHEDULE B-2

NCHFA Second Mortgage Refinance Program (SMRP)

Guidelines Summary

1. Program Overview

2. Program Goals

3. Target Population!

Areas

4. Program Allocation

(Excluding

Administrative

Expenses)

5. Borrower Eligibility

Criteria

TAMPA/IIPA - North Carolina/I 21385.1

Government officials have estimated about 50% of troubled

borrowers have a second mortgage. Homeowners are frequently

unable to make their second mortgage payment and are in danger

of losing their homes to foreclosure. The Second Mortgage

Refinance Program (SMRP) will benefit homeowners, who

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

second mortgage payment because of a prior job loss, reduced

income, or other program eligible hardship.

This program will provide a more affordable housing expense by

refinancing the second mortgage to a 10 year, 0% interest,nonrecourse deferred-payment forgivable subordinate loan.

To assist 1,000 homeowners facing foreclosure in targeted or

"hardest hit" counties, those with 2009 unemployment rates at or

above 11.3%.

The goal ofthis program is to extinguish the existing second

mortgage and replace it with a 10 year, 0% interest, non-recourse,

deferred-payment forgivable subordinate loan. This will reduce

the borrower's monthly mortgage payment and in some instances

may expedite movement of a qualified applicant into a HAMP

first mortgage modification process.

Our target population will be homeowners facing foreclosure in

counties with a 2009 unemployment rates at or above 11.3%.

$15,000,000

Eligible homeowners must be those facing foreclosure due to

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

other demonstrated financial hardships. Homeowners will be

required to provide a financial hardship affidavit with appropriate

documentation on the cause ofthe hardship.

Satisfactory 1st and 2nd mortgage payment history prior to job

loss, reduced income or other program eligible hardship.

Borrowers must meet program underwriting criteria.

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

basis.
6. Property/Loan Existing single-family homes or condominiums (attached or

Eligibility Criteria detached) including manufactured homes on foundations

permanently affixed to real estate owned by the borrower.

Owner-occupied, primary residences only.

Combined Loan to Value cannot exceed 125%.

Properties must be located within North Carolina counties having

unemployment rates at or above 11.3% in 2009.

7. Program Exclusions Total Unpaid Principal Balances> $275,000

Manufactured homes not considered real property.

Ifthe homeowner is HAMP eligible and the second mortgage is

held by a 2MP servicer.

Non-legal U.S. resident

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

subordinate loan. A forgiveness clause will reduce the loan

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

home after five years. At the end ofthe 10 years the note will be

considered satisfied and NCHFA will release the lien securing the

note.

Loan funds are due and payable if property is sold, refinanced or

no longer owner occupied (unless otherwise prohibited under

applicable federal law). Loans are repayable only from proceeds

to the borrower from a sale or refinance. Ifthe property is sold

or refinanced and has not increased in equity to the degree

necessary to repay the note, all or a portion ofthe note will be

forgiven.

All deferred subordinate mortgages will be evidenced by a

promissory note and secured by a deed oftrust on the property.

Borrowers will be required to sign and acknowledge via Written

Agreement indicating the program guidelines and terms prior to

refinancing the second mortgage and obtaining a subordinate loan

under this program.

Any funds returned according to established program guidelines

will be recaptured and used to assist additional homeowners

through December 31, 2017. After December 31, 2017 the funds

will be returned to Treasury.

9. Per Household Under this program, eligible borrowers may receive up to $30,000

Assistance plus closing costs as a subordinate loan.

TAMPAlHPA - North Carolinal121385.1
If $30,000 is insufficient to extinguish the second mortgage, the

Agency will only offer these funds ifthe second lien holder is

willing to take the amount supplied to extinguish the debt without

a deficiency judgment.

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

11. Estimated Number of 1,000 homeowners

Participating

Households

12. Program Inception! The program will be available approximately in December

Duration 20 IO/January 2011 and will last up to 3 years.

13. Program Interactions Homeowners who have participated in the Mortgage Payment

with Other Programs Program (MPP) may be eligible to participate in SMRP ifthe

(e.g. other HFA borrower has become reemployed and has a need.

programs)

14. Program Interactions Extinguishing the second mortgage may expedite movement of

withHAMP qualified applicants into a HAMP first modification process.

15. Program Leverage with If lender holds the first and second mortgage and the combined

Other Financial loan to value (CLTV) is 2: 110%, the lender will be required to

Resources make a minimum 20% match ofthe second mortgage amount.

If lender only holds the second mortgage and the combined loan

to value (CLTV) is 2: 100%, the second mortgage lender will be

required to make a minimum 20% match ofthe second mortgage

amount.

TAMPA/HPA - North Carolina/I 21385. I
SERVICE SCHEDULE B-3

NCHFA Permanent Loan Modification Program (PLMP)

Guidelines Summary

1. Program Overview

2. Program Goals

3. Target Population!

Areas

4. Program Allocation

(Excluding

Administrative

Expenses)

5. Borrower Eligibility

Criteria

TAMPA/IIPA - North Carolinall21385 I

The goal of this program is to provide a quick and streamlined

method for modifying 1st mortgage loans for homeowners whose

mortgages have become unsustainable as the result of a program

eligible hardship. The Permanent Loan Modification Program

(PLMP) will provide a principal reduction with the added option

of a rate decrease and/or term extension by the lender to achieve a

monthly payment that does not exceed 31% of gross monthly

household income.

To assist 440 homeowners facing foreclosure.

The goal ofthe program is to decrease the number of home

owners losing their homes to foreclosure. Secondary goals

include stabilization of neighborhoods and protecting home

values ofsurrounding properties.

This program will provide immediate mortgage payment relief

and stable long term mortgage payments for the life ofthe loan.

Homeowners suffering a program eligible financial hardship

related to reduction ofincome or changed employment

circumstances.

This Program will be available in all North Carolina counties.

$8,800,000

Eligible homeowners must be those with program eligible

financial hardship due to recent unemployment, loss ofincome,

reduction ofincome, or other demonstrated financial hardships.

Homeowners will be required to provide a financial hardship

affidavit with appropriate documentation on the cause ofthe

hardship.

Satisfactory mortgage payments prior to job loss, reduction in

income or other program eligible hardship.

Borrowers must meet program underwriting criteria.

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

basis.
6. Property/Loan Existing single-family homes or condominiums (attached or

Eligibility Criteria detached) including manufactured homes on toundations

permanently affixed to real estate owned by the borrower.

North Carolina owner-occupied, primary residences only.

Combined Loan to Value cannot exceed 125%.

7. Program Exclusions Total Unpaid Principal Balances> $275,000

Manufactured homes not considered real property

Non-legal U.S. resident

The term and rate reduction options will not be available to a

homeowner that is eligible for HAMP. I

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

subordinate loan. A forgiveness clause will reduce the loan I amount by 20% a year for every year the borrower stays in the

horne after five years. At the end ofthe 10 years the note will be

considered satisfied and NCHFA will release the lien securing the

note.

I

Loan funds are due and payable to NCHFA if horne is sold,

refinanced or no longer owner occupied (unless otherwise

prohibited under applicable federal law). Loans are repayable

only from proceeds to the borrower from a sale or retinance. If

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

to the degree necessary to repay the note, all or a portion ofthe

note will be forgiven.

All deferred subordinate mortgages will be evidenced by a

promissory note and secured by a deed oftrust on the property.

Borrowers will be required to sign and acknowledge via Written

Agreement indicating the program guidelines and terms prior to

modifying their loan and obtaining a subordinate loan under this

program.

Any funds returned according to established program guidelines

will be recaptured and used to assist additional homeowners

through December 31, 2017. After December 31, 2017 the funds

will be returned to Treasury.

9. Per Household Under this program, each eligible borrower may receive up to

Assistance $30,000 as a subordinate loan.

TAMPA/IIPA· North Carolinal121385.1
10. Duration of Assistance Assistance under PLMP is a one- time payment.

11. Estimated Number of We anticipate approximately 440 homeowners will be helped.

Participating

Households

12. Program Inception! The program will be available approximately in February 2011

Duration and will last up to 3 years.

13. Program Interactions Homeowners who have participated in the Mortgage Payment

with Other Programs Program (MPP) may be eligible to participate in PLMP ifthe

(e.g. other HFA borrower has become reemployed and has a need.

programs)

14. Program Interactions None.

with HAMP

15. Program Leverage with We will not require investors to match the contributions that are

Other Financial made with the Hardest Hit Funds for the Permanent Loan

Resources Modification Program. However, it is anticipated that certain

original first lien providers may consider (where permitted) a

reduction in interest income (interest rate reduction) or an

extension ofloan terms as a result ofthe loan modification.

TAMPA/HPA - North Carolina!I21385< I
SCHEDULEC

PERMITTED EXPENSES

•

o

100,000

100,000

$

One-time / Start-V Ex enses:

Initial Personnel

Buildin , E ui ment, Technolo

Professional Services

Su lies / Miscellaneous

Marketin /Communications

Travel

Website develo ment /Translation

Cantin enc

o eratin

300,000

Salaries

Professional Services (Legal,

Com liance, Audit, Monitorin

Travel

Buildin s, Leases & E ui ment

Information Technology &

Communications

Office Supplies/Postage and

Delive /Subscri tions

Risk Mana ement/ Insurance

Trainin

Marketin /PR

$ 6,069,058

350,000

118,500

170,000

2,463,120

80,275

239,147

78,500

130,000

Miscellaneous

Transaction Related Ex

Recordin Fees $ 797,600

Wire Transfer Fees 200,000

Counselin Ex enses

File Intake $ 2,928,800

Decision Costs

Successful File

Ke Business Partners On-Gain

% of Total Award

Award Amount

Subtotal $

TAMPA/HPA - North Carolinall21385.1