Amended and Restated June 8, 2017

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SCHEDULE F

HHF FIFTH ROUND FUNDING REALLOCATION MODEL

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

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

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

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

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

I. Definitions

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

1-4 Funding Allocation.

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

1-4 Funding Allocation.

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

Participation Cap.

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

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

reduced pursuant to the Reallocation Model, as applied with respect to each 

Utilization Threshold.

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

Agreement.

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

Purchase Financial Instrument and HFA Participation Agreements entered into by 

the States, as amended from time to time.

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

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

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

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

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

declines an increase to its Program Participation Cap and Round 5 Funding 

Allocation for which it is eligible pursuant to this Schedule F, such State shall not be 

considered a Recipient State. 

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

1-4 Funding Allocation.”

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

Funding Allocation”, as adjusted from time to time in accordance with this Schedule 

F.
Amended and Restated June 8, 2017

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

applicable Annual Reallocation Amount, as determined using the methodology 

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

Share of Annual Reallocation Amount will be zero for the applicable year.

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

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

Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, and Washington, 

D.C.

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

Utilization Threshold and the 2018 Utilization Threshold.

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

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

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

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

Allocation as of such date.

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

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

Allocation shall be reduced by 75% of the Round 5 Funding Allocation as of such 

date.

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

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

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

Funding Allocation which has not yet been Drawn nor obligated with respect to a 

unique homeowner or property as of such date.

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

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

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

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

such date.

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

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

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

respect to such date.

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

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

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

such date.
Amended and Restated June 8, 2017

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

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

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

Round 5 Funding Allocation will be increased by an amount calculated as follows: 

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

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

Population of all Recipient States.

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

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

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

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

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

Rounds 1-4 Funding Allocation as of such dates, or (II) 100%. 

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

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

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

Program Participation Cap as of such date.

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

Utilization Percentages using the z-score methodology, a standard statistical 

standardization procedure. The Utilization Score for each Recipient State is calculated as 

(I)(x) the Utilization Percentage for such Recipient State, less (y) the mean Utilization 

Percentage for all Recipient States (“Average”), divided by (II) the standard deviation of 

the Utilization Percentages for all Recipient States. If a Recipient State’s Utilization 

Percentage is greater than the Average, the Utilization Score will be positive. If a 

Recipient State’s Utilization Percentage is less than Average, the Utilization Score will 

be negative.

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

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

amount by which each Recipient State’s Per Capita Amount will be adjusted. The Need 

Factor is calculated as the dollar amount that would result in the highest adjusted Per 

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

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

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

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

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

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

and Recipient States with negative Utilization Scores will have dollars subtracted from 

the Recipient State’s Per Capita Amount.
Amended and Restated June 8, 2017

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

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

State’s Population to arrive at a “Preliminary Share”. The Preliminary Share for each 

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

Amount by multiplying (x) a ratio, the numerator of which is the Preliminary Share for 

such Recipient State and the denominator of which is the sum of the Preliminary Shares 

for all Recipient States, and (y) the Annual Reallocation Amount.

V. Notices; Modifications

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

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

Related adjustments to program allocations and other amounts set forth in 

the Service Schedules, and Permitted Expenses set forth on Schedule C, shall be 

made as set forth in such written notice.

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

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

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

Round 5 Funding Allocation set forth on Schedule A to the Agreement shall be 

deemed to be modified upon receipt of the written notice sent pursuant to Section V

(a) above. 

 

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

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

Entity.