TAMPA/HPA - Michigan/120187.1

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 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”). 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 of 2008 (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;
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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. 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.whitehouse.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 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 hereunder.

(1) 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 
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and requirements, applicable to the provision of the Services by HFA and Eligible Entity,

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 1681c(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, injunction, 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 supporting 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) perform 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 

conflicts 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 

conflicts 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 of the 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 of the 

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 perform. 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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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 offsite 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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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.

(1) Eligible Entity constitutes a “financial institution” as such term is defined in 

section 3(5) of EESA, 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 carry on 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 of the 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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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 of such 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-1; 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 of such 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 of the 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 amount 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 of New 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 of the 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 (15th) day of the second month following the end of such quarter. 

Treasury, in its sole discretion, may request that HFA modify its performance criteria or seek 
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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 of the Services prior to full launch of the 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 implementation 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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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 of its 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 of the 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 of this Agreement or End of Term, 

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

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

terminated by Treasury prior to the end of the 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”):

(1) 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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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 effectuating 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 of state 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; (f) 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 of the 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 performance 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.
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TAMPA/HPA - Michigan/120187.1

B. Treasury, in its sole discretion, may take any or all of the following actions upon the 

occurrence of an Event of Default:

(1) 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 of servicers, 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 of the 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:

(1) 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.
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TAMPA/HPA - Michigan/120187.1

(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:

(1) 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 
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TAMPA/HPA - Michigan/120187.1

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

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 of, 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 effective 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 of this 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 of such 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. 
- 15 -

TAMPA/HPA - Michigan/120187.1

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 of such 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 Liability

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

AFFILIATES BE LIABLE TO ELIGIBLE ENTITY WITH RESPECT TO THE SERVICES OR 
- 16 -

TAMPA/HPA - Michigan/120187.1

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 of this 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 of this 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 terms 

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 
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TAMPA/HPA - Michigan/120187.1

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 of this 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 thereof) 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 of this 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-1 - 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]
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:

MICHIGAN STATE HOUSING

DEVELOPMENT AUTHORITY

By: /s/ Keith Molin

Name: Keith Molin

Title: Executive Director

ELIGIBLE ENTITY:

MICHIGAN HOMEOWNER ASSISTANCE

NONPROFIT HOUSING CORPORATION

By: /s/ Edwin R. Harlin

Name: Edwin R. Harlin

Title: President

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 I-IFA Participation Agreement- Michigan]
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:

MICHIGAN STATE HOUSING

DEVELOPMENT AUTHORITY

By:

Name:

Title:

ELIGIBLE ENTITY:

MICHIGAN HOMEOWNER ASSISTANCE

NONPROFIT HOUSING CORPORATION

By:

Name:

Title:

TREASURY:

UNITED STATES DEPARTMENT OF THE

TREASURY

By:

Name: Herbert M. Allison, J .

Title: Assistant Secretary r

Financial Stability

[Signature Page to Commitment to Purchase Financial Instrument and HFA Participation Agreement - Michigan]
TAMPA/HPA - Michigan/120187.1

EXHIBITS AND SCHEDULES

Exhibit A Form of Financial Instrument

Exhibit B-1 Form of HFA Certification

Exhibit B-2 Form of Eligible Entity Certification

Exhibit C Form of Capital Draw Request

Exhibit D-1 Form of Legal Opinion - HFA

Exhibit D-2 Form of Legal Opinion - Eligible Entity 

Schedule A Basic Information

Schedule B Service Schedules

Schedule C Permitted Expenses

Schedule D Qualifications to Representations and Warranties

Schedule E Indemnification
TAMPA/HPA - Michigan/120187.1

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 effective 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 of the Agreement, to the satisfaction of 

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

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

(b) This 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 during the Term, Eligible Entity shall use such 

repaid funds to continue to provide Services to other eligible homeowners.

(b) Second, if such funds are repaid after the termination or expiration of the Term, 

Eligible Entity shall use such repaid amounts to replenish the required reserve for 

administrative expenses until the reserve amount indicated on the Service 

Schedule for such year is satisfied.

(c) Third, if such funds are repaid after the termination or expiration of the Term, and 

no amounts are required to replenish the required reserve for administrative 

expenses pursuant to Section 2(b) above, Eligible Entity shall remit such funds to 

Treasury, monthly on the 15th day of each month or first business day thereafter.
TAMPA/HPA - Michigan/120187.1

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.

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.
TAMPA/HPA - Michigan/120187.1

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 - Michigan/120187.1

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 of the 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] Date

[Title of Authorized Official]
TAMPA/HPA - Michigan/120187.1

EXHIBIT B-2

FORM OF ELIGIBLE ENTITY CERTIFICATION

This Certification is delivered as required by Section 2.A(15) 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 of the 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 of Authorized Official] Date

[Title of Authorized Official]
TAMPA/HPA - Michigan/120187.1

EXHIBIT C

FORM OF CAPITAL DRAW REQUEST

[insert date]

The Bank of New York Mellon

tarpcppclosing@bnymellon.com

Attn: Matthew Sabino

The United States Department of the Treasury

OFSChiefCounselNotices@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 of such date, as if made 

on and as of the 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/HPA - Michigan/120187.1

(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 of Authorized Official]

[Title of Authorized Official]

[INSERT FULL LEGAL NAME OF ELIGIBLE ENTITY]

[Name of Authorized Official]

[Title of Authorized Official]
TAMPA/HPA - Michigan/120187.1

CAPITAL DRAW SCHEDULE

Capital Draw Request for:

[______] Program $____________

[______] Program $____________

[______] Program $____________

Permitted Administrative Expenses $____________

Total Capital Draw Request $____________

Total Capital Draw Request as a Percentage of Program Participation Cap1: _____%

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:

_____%

________________________

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

2 May not exceed 5.0% on the date of submission of the Draw Request.

Depository Account Information/Wire Instructions 

for payment of Capital Draw:
TAMPA/HPA - Michigan/120187.1

EXHIBIT D-1

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 of _________.

2. HFA has duly authorized the execution and delivery of the 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 perform 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 of the 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 of, or that seeks to enjoin the performance of, or seeks damages 

with respect to the Agreements or any of HFA’s obligations thereunder.
TAMPA/HPA - Michigan/120187.1

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 of the State of _________.

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 

obligated 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.
SCHEDULE A

BASIC INFORMATION

Eligible Entity Information:

Name ofthe Eligible Entity: Michigan Homeowner Assistance Nonprofit

Housing Corporation

Corporate or other organizational fonn: Domestic Nonprofit Corporation

Jurisdiction of organization:

Notice Infonnation:

HFA Infonnation:

NameofHFA:

Organizational fonn:

Date ofApplication:

Notice Infonnation:

TAMPA/BPA Miclligallll20187.1

State ofMichigan

Michigan State Housing Development Authority

Public body cOl]Jorate and politic of the State of

Michigan

April 14, 2010
TAMPA/HPA - Michigan/120187.1

Program Participation Cap: $154,500,000

Closing Date: June 23, 2010

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

Account Control Agreement between 

Treasury and Eligible Entity regarding the 

HHF Program.
TAMPA/HPA - Michigan/120187.1

SCHEDULE B

SERVICE SCHEDULES

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

Schedule B-2, et. seq.) together comprise Schedule B 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 of the Treasury and the undersigned parties. 
TAMPA/HPA - Michigan/120187.1

SERVICE SCHEDULE B-1

Michigan State Housing Development Authority

PRINCIPAL CURTAILMENT PROGRAM

Summary Guidelines

1. Program Overview The Principal Curtailment Program will provide a one-time 

matching fund of up to $10,000 to homeowners seeking to 

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

matching forgiveness of principal overhang and to modify the 

reduced loan balance.

2. Program Goals The Principal Curtailment will prevent avoidable foreclosures by 

helping homeowners who currently cannot refinance or modify 

their mortgages due to negative equity positions. Homeowners 

will benefit from both a restructured loan payment and the 

reduction in principal balance, reducing monthly payments and 

increasing sustainability.

3. Target 

Population/Areas

The Authority does not anticipate targeting this assistance on a 

geographic basis, nor have we anticipated targeting specific 

income limits. However, in practical terms this program will 

most likely assist working and middle-income families although 

there are no hard income limits. 

4. Program Allocation 

(Excluding 

Administrative 

Expenses)

$30.4 million. 

5. Borrower Eligibility 

Criteria

Homeowners presently having severe negative equity, greater or 

equal to 115% of Combined Loan to Value (CLTV), and need 

principal curtailment in order to reach a sustainable mortgage 

payment. Homeowners will be required to provide a financial 

hardship affidavit. First mortgage LTV may not be reduced 

below 100%. The Lender will determine homeowners’ 

qualifying ratios for eligibility according to their own 

standardized modification guidelines; housing ratios should not 

exceed 31%. The Lender will transmit eligible homeowner data 

to the Authority for review, and agree to match MSHDA’s 

assistance dollar for dollar towards principal curtailment. 

Awarded funds will be remitted to Lender to be applied towards 

only the outstanding principal, on either 1st or 2nd mortgage. 

Lender to supply evidence to the Authority that funds were 

applied as approved. Hardest-Hit funds will be available on a 

first come, first serve basis. 

6. Property/Loan 

Eligibility Criteria

The homeowner must currently occupy the property as his/her 

primary residence, and must be located within the state of 

Michigan. Eligible structures to include single-family, attached 
TAMPA/HPA - Michigan/120187.1

or detached, or manufactured homes on a permanent foundation 

attached to real property. Existing mortgage loan balance must 

be equal to or less than $729,250.

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

liquid cash reserves exceeding 3 months PITI.

8. Structure of Assistance Homeowners receiving MSHDA award will execute a secured 

subordinate lien mortgage and note in favor of the Eligible 

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

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

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

principal residence of the homeowner, or if the mortgagor repays 

in full any mortgage loan encumbering the property, no other 

principal payments on the loans are due. Repayment of funds 

will be re-invested back into new homeowner awards. Mortgage 

will be recorded through public records and ongoing monitoring, 

repayments and discharges will be conducted by the Authority.

9. Per Household 

Assistance 

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

from the Lender. 

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

Lender/Servicer for application towards principal curtailment. 

11. Estimated Number of 

Participating 

Households

3,044 households could be served under this program if they all 

receive the maximum funding amount of $10,000. 

12. Program Inception/ 

Duration

This Program will be available to homeowners within two 

months after approval by Treasury and will last up to three years. 

However, based on the overwhelming need, funds allocated to 

this Program will likely be exhausted second quarter 2012. 

13. Program Interactions 

with Other HFA 

Programs 

Homeowners will only be eligible for one MSHDA HHF 

Program. MSHDA owned and serviced loans are eligible for 

this program.

14. Program Interactions 

with HAMP

Lender/Servicer will analyze homeowners’ request for loan 

workout and offer the best possible solution to provide for long 

term sustainability. Some homeowners are given HAMP 

modifications, yet many will not qualify due to inability to reach 

a sustainable mortgage payment or 31% ratio without making a 

principal curtailment. This program, with the Lender’s 1:1 

match, may make it possible. This assistance is available for 

non-HAMP loans as well. 

15. Program Leverage 

with Other Financial 

Resources

Existing Lender/Servicer will be required to match HHF 

Program funds 1:1. The matching funds will be paid at closing.
TAMPA/HPA - Michigan/120187.1

SERVICE SCHEDULE B-2

Michigan State Housing Development Authority

LOAN RESCUE PROGRAM

Summary Guidelines

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

unemployment, many Michigan families have encountered some 

significant obstacle in their lives that resulted in mortgage 

delinquency. This program will provide up to $5,000 in 

assistance to households who can now sustain homeownership, 

catch up on delinquent payments and avoid foreclosure. 

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

homeowners, who otherwise are on the brink of foreclosure, but 

can now afford to sustain homeownership, back on solid footing 

without increasing their indebtedness. In so doing, the program 

will stem the oversupply of foreclosed homes and short sales that 

dominate many markets and help stabilize the broader housing 

market in Michigan.

3. Target 

Population/Areas

The Authority does not anticipate targeting this assistance on a 

geographic basis, nor have we anticipated targeting specific 

income limits. However, in practical terms this program will 

most likely assist working and middle-income families although 

there are no hard income limits. 

4. Program Allocation 

(Excluding 

Administrative 

Expenses)

$15.5 million.

5. Borrower Eligibility 

Criteria

Homeowners must be able to document a “recovery” from a onetime crisis and have the future ability to sustain their current 

mortgage. Homeowners will be required to provide a financial 

hardship affidavit. The Lender/Servicer will determine 

homeowners qualifying ratios for eligibility according to their 

own standardized modification guidelines, i.e. HAMP, FDIC, 

etc. The Lender will transmit eligible homeowner data to the 

Authority for review, confirmation that homeowner has 

overcome the one-time crisis and is back on track with 

successful payments. Housing ratio should not exceed 31% after 

approved modification. Award funds will be remitted to Lender 

for application to arrearage on homeowner’s loan. Proof to be 

supplied to the Authority that funds were applied and account 

brought current. Hardest-Hit funds will be available on a first 

come, first serve basis.

6. Property/Loan The homeowner must currently occupy the property as his/her 

primary residence, and must be located within the state of 
TAMPA/HPA - Michigan/120187.1

Eligibility Criteria Michigan. Eligible structures to include single-family, attached 

or detached, or manufactured homes on a permanent foundation 

attached to real property. Existing mortgage loan balance must 

be equal to or less than $729,250. 

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

liquid cash reserves exceeding 3 months PITI.

8. Structure of Assistance Homeowners receiving award will execute a secured subordinate 

lien mortgage and note in favor of the Eligible Entity. Loan will 

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

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

property, or when the property ceases to be the principal 

residence of the homeowner, or if the mortgagor repays in full 

any mortgage loan encumbering the property, no other principal 

payments on the loan are due. Repayment of funds will be reinvested back into new homeowner awards. Mortgage will be 

recorded through public records and ongoing monitoring, 

repayments and discharges will be conducted by the Authority.

9. Per Household 

Assistance 

One time award up to $5,000 per household.

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

Lender/Servicer for application towards arrearage on 

homeowners’ account.

11. Estimated Number of 

Participating 

Households

Based upon maximum program funding of $5,000 per 

household, 3,090 households may be assisted. 

12. Program 

Inception/Duration

This Program will be available to homeowners within two 

months after approval by Treasury and will last up to three years. 

However, based on the overwhelming need, funds allocated to 

this Program will likely be exhausted second quarter 2012. 

13. Program Interactions 

with Other HFA 

Programs

Homeowners will only be eligible for one MSHDA HHF 

Program. MSHDA owned and serviced loans are eligible for 

this program.

14. Program Interactions 

with HAMP

Lender/Servicer will analyze homeowners’ request for loan 

workout and offer the best possible solution to provide long term 

sustainability. Some homeowners are given HAMP 

modifications, yet some may not qualify due to adding the 

delinquency to the balance and not being able to reach a 31% 

ratio; this program may help. This assistance is also available 

for non-HAMP loans.

15. Program Leverage 

with Other Financial 

Resources

None.
TAMPA/HPA - Michigan/120187.1

SERVICE SCHEDULE B-3

Michigan State Housing Development Authority

UNEMPLOYMENT MORTGAGE SUBSIDY PROGRAM

Summary Guidelines

1. Program Overview MSHDA is partnering with financial institutions to directly provide 

funds to subsidize an eligible borrower’s current or modified 

mortgage payment. 

This one-time fund will assist the borrower in retaining 

homeownership by subsidizing 50% or $750 (whichever is less) of 

their mortgage payments during their time of unemployment. The 

assistance will not exceed a total of 12 consecutive months or 

$9,000. Homeowners will continue to be responsible for the 

remaining 50% of their monthly payment.

2. Program Goals Provide mortgage payment assistance to Michigan unemployed 

residents, helping them remain successful with homeownership.

3. Target 

Population/Areas

The Authority does not anticipate targeting this assistance on a 

geographic basis, nor have we anticipated specific hard income 

limits. However, in practical terms this program will most likely 

assist working and middle-income families although there are no 

hard income limits. 

4. Program Allocation 

(Excluding 

Administrative 

Expenses)

$99.8 million. 

5. Borrower Eligibility 

Criteria

Homeowners who have lost their job and qualify to receive 

unemployment benefits will apply for assistance to their 

Lender/Servicer. Homeowners will be required to provide a 

financial hardship affidavit. The Lender/Servicer will determine 

borrower’s qualifying ratios for eligibility according to their own 

standardized modification guidelines, i.e. HAMP, FDIC, etc. The 

Lender will transmit eligible homeowner data to the Authority for 

review and confirmation that unemployment benefits are being 

received. The Authority will communicate approval to the Lender. 

Housing ratios will not be permitted to exceed 31%; this assistance 

will not be permitted to reduce housing ratio below 31%. HardestHit funds will be available on a first come, first serve basis.

6. Property/Loan 

Eligibility Criteria

The borrower must currently occupy the property as his/her 

primary residence, and must be located within the state of 

Michigan. The unemployed homeowner must have been obligated 

on the original note. Eligible structures to include single-family, 

attached or detached, or manufactured home on a permanent 

foundation attached to real property. Existing mortgage loan 
TAMPA/HPA - Michigan/120187.1

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

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

cash reserves exceeding 3 months PITI.

8. Structure of 

Assistance

Homeowners receiving award will execute a secured subordinate 

lien mortgage and note in favor of the Eligible Entity. Loan will be 

0%, non-amortizing, forgivable over a 5 year term at 20% per year, 

which will be due on sale or transfer of the property, or when the 

property ceases to be the principal residence of the homeowner, or 

if the mortgagor repays in full any mortgage loan encumbering the 

property, no other principal payments on the loan are due. 

Repayment of funds will be re-invested back into new homeowner 

awards. Mortgage will be recorded through public records and 

ongoing monitoring, repayments and discharges will be conducted 

through the Authority.

9. Per Household 

Assistance 

The lesser of 50% of current or modified PITI or $750 per month, 

not to exceed 12 consecutive months; a maximum of $9,000 per 

household.

10. Duration of 

Assistance

Subsidy ceases two months after borrower returns to work; 

maximum subsidy is never to exceed 12 months.

11. Estimated Number 

of Participating 

Households

Based upon maximum program funding of $9,000 per household, 

11,090 households may be assisted. If average assistance per 

household is $6,000, more than 16,500 households may be assisted. 

12. Program 

Inception/Duration

This Program will be available to homeowners within two months 

after approval by Treasury and will last up to three years. 

However, based on the overwhelming need, funds allocated to this 

Program will likely be exhausted second quarter 2012. 

13. Program 

Interactions with 

Other HFA 

Programs

Homeowners will only be eligible for one MSHDA HHF Program. 

After permanent employment is obtained, the Lender/Servicer may 

offer and approve a permanent loan modification program. 

MSHDA owned and serviced loans are eligible for this program.

14. Program 

Interactions with 

HAMP

Lender/Servicer will analyze homeowners request for loan workout 

and offer the best possible solution to provide for long term 

sustainability. Some homeowners are given HAMP modifications, 

yet many will not quality due to inability to prove long term 

unemployment benefits. This program will provide the temporary

needed assistance to bridge the homeowner’s gap to maintain their 

homes. This assistance is also eligible for non-HAMP loans.

15. Program Leverage 

with Other 

Financial Resources

None.
TAMPA/HPA - Michigan/120187.1

SCHEDULE C

PERMITTED EXPENSES

Michigan

One-time / Start-Up Expenses:

Initial Personnel $0

Building, Equipment, Technology $0

Professional Services $125,000

Supplies / Miscellaneous $0

Marketing /Communications $262,500

Travel $0

Website development /Translation $0

Contingency $0

Subtotal $387,500

Operating / Administrative 

Expenses:

Salaries $6,953,539

Professional Services (Legal, 

Compliance, Audit, Monitoring) $218,750

Travel $0

Buildings, Leases & Equipment $75,000

Information Technology & 

Communications $125,000

Office Supplies/Postage and 

Delivery/Subscriptions $0

Risk Management/ Insurance $0

Training $150,000

Marketing/PR $325,000

Miscellaneous $0

Subtotal $7,847,289

Transaction Related Expenses:

Recording Fees $460,850

Wire Transfer Fees $112,500

Counseling Expenses

File Intake $0

Decision Costs $0

Successful File $0

Key Business Partners On-Going $0

Subtotal $573,350

Grand Total $8,808,139

% of Total Award 5.70%

Award Amount $154,500,000