Eighth Amendment to HPA — Oregon

TAMPA/205199.1

EIGHTH AMENDMENT TO

COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT

and

HFA PARTICIPATION AGREEMENT

This Eighth Amendment to Commitment to Purchase Financial Instrument and HFA

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

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

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

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

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

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

Recitals

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

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

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

Purchase Financial Instrument and HFA Participation Agreement (the “First Amendment”), as

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

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

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

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

Fourth Amendment to Commitment to Purchase Financial Instrument and HFA Participation

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

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

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

Financial Instrument and HFA Participation Agreement (the “Sixth Amendment”), and as further

amended by that certain Seventh Amendment to Commitment to Purchase Financial Instrument

and HFA Participation Agreement (the “Seventh Amendment”; and together with the Original

HPA as amended thereby and by the First Amendment, Second Amendment, Third Amendment,

Fourth Amendment, Fifth Amendment and Sixth Amendment, the “Current HPA”), dated as of

their respective dates as set forth on Schedule A attached hereto, in connection with Treasury’s

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

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

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

from time to time (“EESA”);

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

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

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

document all approved modifications to the Service Schedules;
TAMPA/205199.1 2

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

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

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

Agreement

1. Amendments

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

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

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

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

amended by this Eighth Amendment.

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

and replaced with Schedule A attached to this Eighth Amendment.

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

and replaced with Schedule B attached to this Eighth Amendment.

2. Representations, Warranties and Covenants

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

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

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

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

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

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

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

Event of Default under the HPA.

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

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

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

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

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

Entity is in breach of any such covenant.

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

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

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

hereunder and thereunder.

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

Eighth Amendment and any other closing documentation delivered to Treasury in

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

thereunder.
TAMPA/205199.1 3

3. Miscellaneous

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

and are incorporated herein by this reference.

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

them in the HPA.

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

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

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

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

jurisdiction.

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

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

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

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

[SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE

INTENTIONALLY LEFT BLANK]
[Signature Page to Eighth Amendment to HPA — Oregon]

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

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

Instrument and HFA Participation Agreement as of the Amendment Date.

HFA: TREASURY:

OREGON HOUSING AND COMMUNITY

SERVICES

UNITED STATES DEPARTMENT OF THE

TREASURY

By: /s/ Margaret S. Van Vliet By:

Name: Margaret S. Van Vliet Name: Timothy G. Massad

Title: Director Title: Assistant Secretary for

Financial Stability

ELIGIBLE ENTITY:

OREGON AFFORDABLE HOUSING

ASSISTANCE CORPORATION

By: /s/ Diana Koppes

Name: Diana Koppes

Title: President

By: /s/ Nancy Cain

Name: Nancy Cain

Title: Treasurer

TAMPA/205199.1 5

EXHIBITS AND SCHEDULES

Schedule A Basic Information

Schedule B Service Schedules
TAMPA/205199.1 A-1

SCHEDULE A

BASIC INFORMATION

Eligible Entity Information:

Name of the Eligible Entity: Oregon Affordable Housing Assistance

Corporation

Corporate or other organizational form: Nonprofit corporation

Jurisdiction of organization: Oregon

Notice Information: Oregon Affordable Housing Assistance

Corporation

Attn: Diana Koppes

725 Summer St NE, Suite B

Salem, Oregon 97301-1266

Phone: (503) 986-6749

Fax: (503) 986-2132

E-mail: diana.koppes@hcs.state.or.us

HFA Information:

Name of HFA: Oregon Housing and Community Services

Organizational form: A department of the State of Oregon under

the laws of the State of Oregon

Date of Application: June 1, 2010

Date of Action Plan: September 1, 2010

Notice Information: Oregon Housing and Community Services

Attn: Diana Koppes

725 Summer St NE, Suite B

Salem, Oregon 97301-1266

Phone: (503) 986-6749

Fax: (503) 986-2132

E-mail: diana.koppes@hcs.state.or.us

Program Participation Cap: $220,042,786.00

Portion of Program Participation Cap

Representing Original HHF Funds: $88,000,000.00
TAMPA/205199.1 A-2

Portion of Program Participation Cap

Representing Unemployment HHF Funds: $49,294,215.00

Permitted Expenses: $35,207,199.00

Closing Date: August 3, 2010

First Amendment Date: September 23, 2010

Second Amendment Date: September 29, 2010

Third Amendment Date: December 16, 2010

Fourth Amendment Date: March 31, 2011

Fifth Amendment Date: May 25, 2011

Sixth Amendment Date: September 28, 2011

Seventh Amendment Date: December 8, 2011

Eighth Amendment Date: March 29, 2012

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

Depository Account Control Agreement

between Treasury and Eligible Entity

regarding the HHF Program.
TAMPA/205199.1 B-1

SCHEDULE B

SERVICE SCHEDULES

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

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

Schedule B-2, et. seq.), which collectively comprise Schedule B to the HPA.
TAMPA/205199.1 B-2

SERVICE SCHEDULE B-1

Oregon Affordable Housing Assistance Corporation

Loan Modification Assistance Program

Summary Guidelines

1. Program Overview The Loan Modification Assistance Program will provide funds to

assist financially distressed borrowers who are in the process of

modifying their home loans.

Under the Program, a one-time contribution of funds will be made

to a homeowner’s lender/servicer to be used to fill a financial gap

that limits a homeowner’s eligibility for a loan modification.

Funds may be used to reduce the outstanding principal balance,

pay delinquent escrow, arrearages, or strategically apply

resources to ensure a Net Present Value test is positive.

Modification must result in a loan to value ratio of no more than

125 percent, a total debt-to-income of up to or less than 50

percent, and a mortgage payment of no more than 31 percent

including principal, interest, taxes and insurance. The Program is

designed to work with both HAMP and non-HAMP

modifications.

2. Program Goals To provide a quick infusion of funds that will allow for a

successful loan modification. Without these additional funds,

homeowners would be ineligible for modification.

3. Target Population/

Areas

The Program will be available in all counties in Oregon for

households with incomes equal to or less than 120 percent of state

median income. The substantial majority of funding (80 percent)

will be provided to those counties identified as hardest hit (20).

4. Program Allocation

(Excluding

Administrative

Expenses)

$10,500,000.00

5. Borrower Eligibility

Criteria

The homeowner must have a current household income equal to

or less than 120 percent of state median income. A homeowner

who has a loan financed in whole or in part by bonds that are taxexempt under IRC section 143 is presumed to satisfy income

limits.

The homeowner’s current first lien mortgage must have

originated before January 1, 2009.

Homeowner must have either been denied for, or must be in the

process of receiving, a loan modification.

Homeowner must provide a financial hardship affidavit.
TAMPA/205199.1 B-3

The homeowner cannot own other residential real property.

The homeowner, in connection with a mortgage or real estate

transaction, cannot have been convicted, within the last 10 years,

of any one of the following: (A) felony larceny, theft, fraud or

forgery, (B) money laundering or (C) tax evasion.

After modification, must have a loan-to-value ratio of no more

than 125 percent.

6. Property/Loan

Eligibility Criteria

The subject property must be an owner-occupied, primary

residence and be located in Oregon. Manufactured homes are

eligible only if the structure is recorded in the county’s deed

records.

The unpaid principal balance of the homeowner’s first lien

mortgage cannot exceed $729,750.

The homeowner cannot own other residential real property.

7. Program Exclusions Owners of second homes or investment properties.

8. Structure of

Assistance

Funding from the Program will be structured as a five-year nonrecourse, zero-percent forgivable, non-amortizing loan in which a

second lien is recorded on the property. Twenty percent of the

loan will be forgiven for each year it is outstanding. If property is

sold or refinanced prior to the loan termination date, funds will be

recovered should sufficient equity be available from the

transaction. Recovered funds will be recycled in order to provide

additional program assistance until December 31, 2017, at which

time any recovered funds will be returned to Treasury.

9. Per Household

Assistance

Maximum is $10,000.

10. Duration of Assistance One time payment on behalf of borrower to lender/servicer.

11. Estimated Number of

Participating

Households

An estimated 1,050 homeowners will receive assistance.

12. Program Inception/

Duration

The Program began in July 2011 and is expected to last 12

months.

13. Program Interactions

with Other Programs

(e.g. other HFA

programs)

None.

14. Program Interactions

with HAMP

The Program will only function directly with the existing HAMP

program or other modification programs offered by servicers

and/or lenders. The Program is not anticipated to work with the
TAMPA/205199.1 B-4

other Hardest Hit Fund programs; however, it will work with nonHAMP modification programs offered through lenders/servicers.

In those cases, Program funds will be used when an investment of

$10,000 or less, will facilitate a successful loan modification.

15. Program Leverage

with Other Financial

Resources

Servicers will not charge administrative fees and waive all

administrative fees accrued prior to modification.

16. Qualify as an

Unemployment

Program

Yes No 
TAMPA/205199.1 B-5

SERVICE SCHEDULE B-2

Oregon Affordable Housing Assistance Corporation

Mortgage Payment Assistance Program

Summary Guidelines

1. Program Overview This schedule applies to applications initiated after the

effective date of the Sixth Amendment to Commitment to

Purchase Financial Instrument and HFA Participation

Agreement.

The Mortgage Payment Assistance Program will provide up to 12

months of mortgage payment assistance or $20,000, whichever is

used first. This temporary assistance will be provided on behalf of

homeowners who are receiving unemployment insurance benefits.

The state’s foreclosure counseling network will serve as the

administrative entry point for application processing.

Oregon Affordable Housing Assistance Corporation (OAHAC)

will, on behalf of an eligible borrower, make a full monthly

payment to the servicer until the applicable program cap is

reached, or until the borrower has become re-employed. Eligible

borrowers may receive up to 12 monthly assistance payments by

signing a quarterly affidavit, provided the program cap has not

been met.

OAHAC will require borrowers to provide at least quarterly

certification of continued eligibility.

2. Program Goals The assistance provided by the Mortgage Payment Assistance

Program will allow qualified borrowers to search for work or

obtain job training without fear of losing their home. The purpose

of this program is to assist borrowers until they can obtain

sufficient income to resume scheduled mortgage payments or

qualify for a modified mortgage payment.

3. Target Population/

Areas

The Program will be available to homeowners receiving

unemployment insurance benefits at the time of initial

application.

4. Program Allocation

(Excluding

Administrative

Expenses)

$126,000,000.00

5. Borrower Eligibility

Criteria

The borrower must be receiving unemployment insurance

benefits at time of initial application.
TAMPA/205199.1 B-6

The borrower must complete and sign a Financial Hardship

Affidavit.

The borrower, in connection with a mortgage or real estate

transaction, cannot have been convicted, within the last 10 years,

of any one of the following: (A) felony larceny, theft, fraud or

forgery, (B) money laundering or (C) tax evasion.

6. Property/Loan

Eligibility Criteria

The subject property must be a one unit, single family, owneroccupied, primary residence and be located in Oregon.

The unpaid principal balance of the borrower’s first lien mortgage

cannot exceed the Federal Housing Administration loan limit, as

effective on October 1, 2011, for the county in which the subject

property is located.

7. Program Exclusions The borrower cannot be in active bankruptcy.

The borrower’s first lien mortgage cannot be a home equity line

of credit, land sale contract, or otherwise privately financed

mortgage.

The borrower cannot own other residential real property.

The subject property cannot be a condominium or townhome.

8. Structure of

Assistance

The Program is envisioned as a revolving fund. The Program will

make a five-year, non-recourse, zero-percent, forgivable, nonamortizing loan in which a junior lien is recorded on the property.

Twenty percent of the loan will be forgiven for each year the loan

is outstanding. If the property is sold or refinanced prior to the

loan termination date, the Program will recover funds should

sufficient equity be available from the transaction. The Program

will recycle recovered funds in order to provide additional

program assistance until December 31, 2017, at which time any

recovered funds will be returned to Treasury.

9. Per Household

Assistance

Maximum benefit is $20,000 per borrower.

10. Duration of Assistance 12 months.

11. Estimated Number of

Participating

Households

At a minimum this program will help 8,250 homeowners.

12. Program Inception/

Duration

The Program began in December 2010 and is expected to last 36

months.

13. Program Interactions

with Other Programs

(e.g. other HFA

programs)

Some borrowers may have loans funded by Oregon Housing and

Community Services and will also be eligible for the Loan

Preservation Program.
TAMPA/205199.1 B-7

14. Program Interactions

with HAMP

HHF Funds will generally be utilized prior to the UP forbearance

described in Supplemental Directive 10-04 and/or GSE

forbearance programs, unless the borrower has already received

forbearance under those programs. When appropriate however,

servicers should provide UP or other forbearance to eligible

borrowers who are being evaluated for Mortgage Payment

Assistance by OAHAC.

If borrowers are considering HAMP as a option, they must be

evaluated for HAMP at the earlier of reemployment or expiration

of HFA mortgage assistance benefits.

15. Program Leverage

with Other Financial

Resources

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

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

the loan is reinstated or modified following HFA mortgage

assistance, servicers will waive all administrative fees accrued

since the beginning of the delinquency.

16. Qualify as an

Unemployment

Program

 Yes  No
TAMPA/205199.1 B-8

SERVICE SCHEDULE B-3

Oregon Affordable Housing Assistance Corporation

Loan Preservation Assistance Program

Summary Guidelines

1. Program Overview The Loan Preservation Assistance Program is intended to help

homeowners preserve and/or maintain their existing mortgage and

eliminate immediate risk of foreclosure. Funds provided through

this Program will be provided to lenders/servicers to bring a

delinquent borrower current. Eligibility will be determined by

staff representing the OAHAC.

There are two tiers of benefit provided under the Program:

(A) Reinstatement Benefit: For homeowners who, at any time,

receive funding under the Mortgage Payment Assistance program.

(B) Preservation Benefit: For homeowners who can demonstrate

the ability to sustain their loan payments.

Homeowners may decline the Reinstatement Benefit to be

considered for the Preservation Benefit, but homeowners cannot

receive funding under both the Reinstatement and Preservation

benefits.

2. Program Goals To bring delinquent mortgages current. The program will

preserve and/or maintain an existing mortgage and reduce the risk

of imminent foreclosure.

3. Target Population/

Areas

The program will be available in all counties of Oregon for

homeowners with an arrearage.

4. Program Allocation

(Excluding

Administrative

Expenses)

$38,335,587.00

5. Borrower Eligibility

Criteria

Reinstatement Benefit:

The borrower must have received funding, at any time, under the

Mortgage Payment Assistance program.

Preservation Benefit:

The borrower must demonstrate a gross monthly income-toPITIA ratio not to exceed 45 percent.

The borrower must complete and sign an affidavit of prior

hardship.

The borrower, in connection with a mortgage or real estate

transaction, cannot have been convicted, within the last 10

years, of any one of the following: (A) felony larceny, theft,

fraud or forgery, (B) money laundering or (C) tax evasion.
TAMPA/205199.1 B-9

6. Property/Loan

Eligibility Criteria

Preservation Benefit:

The subject property must be a one unit, single family, owneroccupied, primary residence and be located in Oregon.

The unpaid principal balance of the borrower’s first lien mortgage

cannot exceed the Federal Housing Administration loan limit, as

effective on October 1, 2011, for the county in which the subject

property is located.

7. Program Exclusions The borrower cannot be in active bankruptcy.

The borrower’s first lien mortgage cannot be a home equity line

of credit, land sale contract, or otherwise privately financed

mortgage.

The borrower cannot own other residential real property.

The subject property cannot be a condominium or townhome.

8. Structure of

Assistance

The Program is envisioned as a revolving fund. The Program will

make a five-year, non-recourse, zero-percent, forgivable, nonamortizing loan in which a junior lien is recorded on the property.

Twenty percent of the loan will be forgiven for each year the loan

is outstanding. If the property is sold or refinanced prior to the

loan termination date, the Program will recover funds should

sufficient equity be available from the transaction. The Program

will recycle recovered funds in order to provide additional

program assistance until December 31, 2017, at which time any

recovered funds will be returned to Treasury.

9. Per Household

Assistance

Reinstatement Benefit:

A maximum of $10,000, subject to certain limitations in the

program guidelines.

Preservation Benefit:

A maximum of $20,000 per borrower.

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

11. Estimated Number of

Participating

Households

It is estimated that 4,000 homeowners will receive assistance.

12. Program Inception/

Duration

The Program will begin in May 2012 and is expected to last 24

months, but may extend beyond 24 months where both funding

and need exists.

13. Program Interactions

with Other Programs

(e.g. other HFA

programs)

The Program’s Reinstatement Benefit will operate in conjunction

with the Mortgage Payment Assistance program.
TAMPA/205199.1 B-10

14. Program Interactions

with HAMP

This Program would incent recipients to enter loan modification

programs such as HAMP and may interact with both new and

existing HAMP programs.

15. Program Leverage

with Other Financial

Resources

If the loan is reinstated, servicers will waive all administrative

fees accrued since the beginning of the delinquency.

16. Qualify as an

Unemployment

Program

 Yes  No
TAMPA/205199.1 B-11

SERVICE SCHEDULE B-4

Oregon Affordable Housing Assistance Corporation

Transition Assistance Program

Summary Guidelines

1. Program Overview The Transition Assistance Program will assist homeowners for

whom foreclosure would otherwise be inevitable. This Program

will serve as an alternative exit point for recipients of the

Mortgage Payment Assistance Program who do not regain

employment or recover from financial distress to the extent that

they would benefit from loan preservation assistance. This

Program will work in conjunction with servicer/lender short sale

and deed-in-lieu of foreclosure programs to help homeowners

transition to affordable housing expediently. The funds are to be

used by borrowers to pay for relocation expenses including, but

not limited to: housing and utility deposits, transportation and

storage of household goods and personal effects, and temporary

housing costs.

OAHAC may work with lenders/servicers, real estate associations

and agents, and community organizations to identify potential

applicants.

2. Program Goals To provide funds to financially distressed borrowers so they may

be able to find affordable housing while avoiding foreclosure.

Additionally, funds will serve as an incentive to maintain the

home’s condition prior to turning it over to a lender/servicer.

3. Target Population/

Areas

The Program will be available in all counties in Oregon.

4. Program Allocation

(Excluding

Administrative

Expenses)

$0.00

5. Borrower Eligibility

Criteria

The borrower must have a current household income equal to or

less than 120 percent of state median income. A borrower who

has a loan financed in whole or in part by bonds that are taxexempt under IRC section 143 is presumed to satisfy income

limits.

The borrower must complete and sign a financial hardship

affidavit.

The borrower, in connection with a mortgage or real estate

transaction, cannot have been convicted, within the last 10 years,
TAMPA/205199.1 B-12

of any one of the following: (A) felony larceny, theft, fraud or

forgery, (B) money laundering or (C) tax evasion.

The borrower must complete a short sale or deed- in- lieu of

foreclosure agreement.

6. Property/Loan

Eligibility Criteria

The subject property must be an owner-occupied, primary

residence unless the borrower has relocated in the last 24 months,

and provides documentation that the property was such

borrower’s primary residence prior to relocation and satisfies

certain other qualifying criteria.

The unpaid principal balance of the borrower’s first lien mortgage

cannot exceed $350,000 unless certain qualifying conditions are

met. In no instance can the unpaid principal balance of the

borrower’s first lien mortgage exceed $729,750.

The subject property must be a one-unit, single-family residence

(including condominiums and townhomes) located in Oregon,

7. Program Exclusions The borrower cannot own other residential real property.

The borrower cannot be in active bankruptcy.

8. Structure of

Assistance

This Program will not be structured as a loan.

9. Per Household

Assistance

Maximum benefit is $3,000 per household.

10. Duration of Assistance One-time payment to the borrower at or after closing (transfer of

title) of the deed-in-lieu or short sale transaction.

11. Estimated Number of

Participating

Households

0

12. Program Inception/

Duration

This Program is suspended until further notice.

13. Program Interactions

with Other Programs

(e.g. other HFA

programs)

It is anticipated the Program will provide additional support to

eligible recipients above and beyond the assistance provided

through HAFA. The Program would essentially fill gaps for the

borrower in areas where HAFA assistance falls short of the

resources needed for a successful transition.

14. Program Interactions

with HAMP

None.

15. Program Leverage

with Other Financial

Resources

There is no current anticipated leverage; however this program

will be layered on any other resources the borrower is able to

receive for leaving their home before foreclosure.
TAMPA/205199.1 B-13

16. Qualify as an

Unemployment

Program

Yes No
TAMPA/205199.1 B-14

SERVICE SCHEDULE B-5

Oregon Affordable Housing Assistance Corporation

Loan Refinancing Assistance Pilot Project

Summary Guidelines

1. Program Overview The Loan Refinancing Assistance Pilot Project will target two

Oregon counties hit hard by the housing crisis to provide

assistance to homeowners with negative equity mortgages, who

have recovered from unemployment, underemployment or

financial distress and show the capability to pay a mortgage

payment based on a principal amount reflective of the current

market value of the home. There are two structures that will be

utilized to accomplish the refinance depending on restrictions the

loan holder may be under

Loan Purchase Structure: Under the Loan Purchase Structure,

OAHAC, after review and approval by Oregon Housing and

Community Services (OHCS), will provide funding for the

purchase of loans on behalf of homeowners. All as part of one

concurrent and seamless transaction, the loan will be purchased in

accordance with a funding agreement with OAHAC, for a price

that is at or below the current appraised value and at least 10

percent below the current unpaid principal balance of the loan. A

new, affordable loan based on a principal amount equal to or

lesser than the home’s current appraised value will be originated.

Short Sale Structure: The Short Sale Structure will be utilized in

the event the holder of the loan is under restrictions, both

operationally or legally, with respect to a loan sale transaction

that it might otherwise be with respect to a short sale transaction.

In this scenario, OAHAC will utilize its contractor, Further

Development, LLC (“Further”), to facilitate a short sale. All as

part of one concurrent and seamless transaction, the home will be

sold to Further for a price that is at or below the current appraised

value and at least 10% below the current unpaid principal balance

of the loan. Title to the home will be transferred to Further and

then back to the homeowner through a newly originated

affordable loan for the homeowner at a principal amount equal to

or lesser than the home’s current appraised value. That new loan

will be assigned to OHCS, in accordance with a funding

agreement with OAHAC.

The end result will be the same under either structure; the

homeowner remains in the home with a new, affordable loan.
TAMPA/205199.1 B-15

2. Program Goals The Loan Refinancing Assistance Pilot Project’s goals are to

assist homeowners escape negative equity situations, help to slow

the ongoing decline in property value, and provide approved

homeowners with reliable, affordable, sustainable mortgages.

3. Target Population/

Areas

The Program will be available in two Oregon counties, Deschutes

and Jackson, and focus exclusively on homeowners who have

recovered from a financial hardship, are saddled with negative

equity mortgages, and demonstrate the capability to pay a loan

refinanced to an amount that is equal to or less thane home’s

current value.

4. Program Allocation

(Excluding

Administrative

Expenses)

$10,000,000.00

5. Borrower Eligibility

Criteria

The borrower must have a current household income equal to or

less than 150 percent of state median income.. A borrower who

has a loan financed in whole or in part by bonds that are tax

exempt under IRC section 143 is presumed to satisfy income

limits.

The borrower must demonstrate the ability to meet standard

payment ratios for at least the home’s current appraised value.

The borrower must complete and sign a Financial Hardship

Affidavit attesting to the prior loss of income or other applicable

financial hardship.

The borrower, in connection with a mortgage or real estate

transaction, cannot have been convicted, within the last 10 years,

of any one of the following: (A) felony larceny, theft, fraud or

forgery, (B) money laundering or (C) tax evasion.
TAMPA/205199.1 B-16

6. Property/Loan

Eligibility Criteria

The subject property must be an owner-occupied, primary

residence and be located in Oregon.

The subject property must be a one unit, single family residence

or a condominium which is warrantable or on the FHA eligibility

list.

The unpaid principal balance of the borrower’s first lien mortgage

cannot exceed $499,000.

Loans must be purchased at or below appraised market value of

the home.

The new loan cannot have a debt-to-income ratio in which PITIA

is greater than 35 percent of total income and total household debt

is greater than 45 percent of total income. Exceptions to the

maximum debt-to-income ratio may be considered based on the

borrower’s creditworthiness.

Loans can only be purchased if the lender/servicer has discounted

the price of the loan by at least 10 percent of the current unpaid

principal balance.

7. Program Exclusions The borrower’s first lien mortgage cannot be a home equity line

of credit, third party contract, or other private party loan.

The borrower cannot own other residential real property.

Employees of contractor Further Development.

8. Structure of

Assistance

The new mortgage will be for a term of 30 years, carry a fixed

interest rate (to be set by OAHAC and applied uniformly for all

borrowers) and the loan amount will be set at an amount equal to

or less than the current appraised value of the home.

The Pilot is envisioned as a revolving fund and OHCS, OAHAC,

Further Development, or another approved entity may arrange for

take-out financing or sell the loan and revolve the funding directly

back to OAHAC until December 31, 2017, for the purpose of

funding other Loan Refinance Assistance Pilot Project

transactions. All repayments and profits after December 31, 2017,

if any, will be returned to Treasury.

9. Per Household

Assistance

Based on the goal of recycling the program allocation of

$10,000,000 five times, the average per household assistance is

expected to be approximately $30,000 by December 2017. The

per transaction cost will be higher as it does not account for the

revolving of the program funds.
TAMPA/205199.1 B-17

10. Duration of Assistance Assistance will be provided in a one-time transaction to close the

new affordable loan with high touch servicing.

Any required counseling will be provided by HUD approved

agencies using non-HHF resources.

11. Estimated Number of

Participating

Households

OAHAC anticipates helping approximately 330 homeowners.

($10,000,000 program allocation; multiplied by 5, the number of

times the funding is expected to revolve; divided by $150,000 per

estimated average transaction amount).

12. Program Inception/

Duration

The program began in October 2011 and is expected to last until

December 2017.

13. Program Interactions

with Other Programs

(e.g. other HFA

programs)

None.

14. Program Interactions

with HAMP

None.

15. Program Leverage

with Other Financial

Resources

It is expected that this HHF investment will leverage $50 million

in permanent mortgages. Additionally, gains realized through

third-party mortgage refinancing or secondary mortgage market

loan sales due to discounts received at the time of transaction will

be reinvested to grow the size of the revolving fund throughout

the program period.

16. Qualify as an

Unemployment

Program

 Yes  No