Third Amendment to HPA — California 

TAMPA/139499.1

THIRD AMENDMENT TO 

COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT 

and 

HFA PARTICIPATION AGREEMENT 

This Third Amendment to Commitment to Purchase Financial Instrument and HFA Participation 

Agreement (the “Third Amendment”) is entered into as of the date set forth on Schedule A

attached hereto as the Third Amendment Date (the “Amendment Date”), by and among the 

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

HFA whose description is set forth in Schedule A attached hereto (for convenience, a “state 

housing finance agency” or “HFA”) and the undersigned institution designated by HFA to 

participate in the program described below (“Eligible Entity”). 

Recitals 

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

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

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

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

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

Instrument and HFA Participation Agreement (the “Second Amendment”; and together with the 

Original HPA as amended thereby and by the First Amendment, the “Current HPA”), dated as of 

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

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

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

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

from time to time (“EESA”); 

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

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

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

document all approved modifications to the Service Schedules and Permitted Expenses; 

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

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

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

Agreement 

1. Amendments

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

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

HPA to Schedules A, B or C shall mean the Schedules A, B or C attached to this Third 
- 2 - 

TAMPA/139499.1

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

amended by this Third Amendment. 

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

and replaced with Schedule A attached to this Third Amendment. 

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

and replaced with Schedule B attached to this Third Amendment. 

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

and replaced with Schedule C attached to this Third Amendment. 

2. Representations, Warranties and Covenants

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

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

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

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

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

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

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

Event of Default under the HPA. 

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

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

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

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

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

Entity is in breach of any such covenant. 

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

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

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

hereunder and thereunder. 

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

Third Amendment and any other closing documentation delivered to Treasury in 

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

thereunder. 

3. Miscellaneous

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

and are incorporated herein by this reference. 

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

them in the HPA. 
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TAMPA/139499.1

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

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

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

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

jurisdiction. 

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

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

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

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

[SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE 

INTENTIONALLY LEFT BLANK] 
[Signature Page to Third Amendment to HPA — California] 

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

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

Instrument and HFA Participation Agreement as of the Amendment Date. 

HFA: TREASURY: 

CALIFORNIA HOUSING FINANCE 

AGENCY 

UNITED STATES DEPARTMENT OF THE 

TREASURY 

By: /s/ L. Steven Spears By: 

Name: L. Steven Spears Name: Timothy G. Massad 

Title: Executive Director Title: Acting Assistant Secretary for 

 Financial Stability 

 

ELIGIBLE ENTITY:

CALHFA MORTGAGE ASSISTANCE 

CORPORATION 

By: /s/ L. Steven Spears 

Name: L. Steven Spears 

Title: Executive Director 

 

TAMPA/139499.1

EXHIBITS AND SCHEDULES

Schedule A Basic Information 

Schedule B Service Schedules 

Schedule C Permitted Expenses 
TAMPA/139499.1

SCHEDULE A

BASIC INFORMATION

Eligible Entity Information: 

Name of the Eligible Entity: CalHFA Mortgage Assistance Corporation

Corporate or other organizational form: Nonprofit Public Benefit Corporation

Jurisdiction of organization: California

Notice Information: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HFA Information: 

Name of HFA: California Housing Finance Agency 

Organizational form: Agency of the State of California 

Date of Application: April 16, 2010 

Date of Action Plan: September 1, 2010 

Notice Information: 

 

 

 

 

 

 

 
TAMPA/139499.1

With a copy to: 

 

 

 

 

 

 

 

Program Participation Cap: $1,975,334,096.00 

Portion of Program Participation Cap 

Representing Original HHF Funds: $ 699,600,000.00 

Portion of Program Participation Cap 

Representing Unemployment HHF Funds: $ 476,257,070.00 

Permitted Expenses: $ 148,150,057.20

Closing Date: June 23, 2010 

First Amendment Date: September 23, 2010 

Second Amendment Date: September 29, 2010 

Third Amendment Date: December 16, 2010 

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

Depository Account Control Agreement 

between Treasury and Eligible Entity 

regarding the HHF Program. 
TAMPA/139499.1

SCHEDULE B

SERVICE SCHEDULES

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

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

Schedule B-2, et. seq.), which collectively comprise Schedule B to the HPA. 
TAMPA/139499.1

SCHEDULE B-1

California Housing Finance Agency Mortgage Assistance Corporation 

(“CalHFA MAC”) 

UNEMPLOYMENT MORTGAGE ASSISTANCE PROGRAM 

Summary Guidelines 

1. Program 

Overview 

The Unemployment Mortgage Assistance Program (UMA) is one of 

CalHFA MAC’s federally-funded programs developed to provide 

temporary financial assistance to eligible California homeowners 

who wish to remain in their homes but have suffered a loss of income 

due to unemployment. 

CalHFA MAC is partnering with financial institutions to directly 

provide program funds to subsidize an eligible borrower’s mortgage 

payments. 

UMA provides mortgage payment assistance equal to the lesser of 

$3,000 per month or 100% of the PITI+escrowed A (principal, 

interest, tax, insurance and escrowed homeowner’s association dues) 

for up to six (6) months, with the purpose of preventing avoidable 

foreclosures until such time that the borrower retains employment 

sufficient to meet the demands of satisfying their regular mortgage 

payment. 

2. Program Goals UMA’s goal is to help homeowners remain in their homes and 

prevent avoidable foreclosures despite loss of income due to 

unemployment. 

The UMA program will minimize past due payments, and provide a 

borrower with additional time to find alternate employment and 

replace income needed to make their mortgage payment. 

UMA was designed to assist borrowers who are currently eligible to 

receive unemployment benefits. 

UMA was designed to complement other loss mitigation programs, 

including increasing a borrower’s eligibility for an extended written 

forbearance plan and/or loan modification. 

3. Target 

Population / 

UMA is designed to target low-to-moderate income homeowners and 

address the needs of a borrower’s specific situation in lieu of 

targeting certain regions or counties. 
TAMPA/139499.1

Areas 

4. Program 

Allocation

(Excluding 

Administrative 

Expenses) 

$874,995,915.28 

5. Borrower 

Eligibility 

Criteria 

• Borrower must qualify as a low-to-moderate income 

household, as follows: 

o Low-to-moderate income of 120% or less of the HCD 

(as defined by the California State Department of 

Housing and Community Development) Area Median 

Income, for a family of four, in the county where 

borrower resides. 

o A loan financed in whole or in part by bonds that are 

tax-exempt under IRC section 143, the borrower is 

presumed to satisfy income limits. 

• Borrower must complete and sign a Hardship Affidavit / 3rd 

Party Authorization documenting the reason for the hardship. 

• Borrowers who have recently encountered a financial 

hardship due to underemployment or unemployment, 

including those whose financial hardship is related to their 

military service. 

• Borrower must agree to provide all necessary documentation 

to satisfy program guidelines established by CalHFA MAC. 

• Borrower must be currently eligible to receive unemployment 

benefits. 

• Mortgage loan is delinquent or at risk of imminent default as 

substantiated by borrower’s hardship documentation. Loans 

in foreclosure are not eligible. 

• General program eligibility is determined by CalHFA MAC, 

the housing counselor or servicer based on information 

received from the borrower. Program-specific eligibility is 

determined by CalHFA MAC on a first-come/first-approved 

basis until program funds and funding reserves have been 

exhausted. Loan servicer will implement the HHF program 

based on participation agreement terms and conditions. 

• Funding allocation will be tracked, monitored and performed 

by CalHFA MAC in a centralized processing operation.

6. Property / Loan 

Eligibility 

Criteria 

• Property is encumbered by a first lien mortgage loan that was 

originated on or before January 1, 2009. 

• Current unpaid principal balance (UPB) of the first lien 

mortgage loan is not greater than $729,750 (GSE conforming 
TAMPA/139499.1

limit for a one-unit property). 

• The property securing the mortgage loan must not be 

abandoned, vacant or condemned. 

• The applicant must own and occupy the single family, 1-4 

unit home (an attached or detached house or a condominium 

unit) located in California and it must be their primary 

residence. 

7. Program 

Exclusions 

• Loan is more than three (3) payments delinquent as of the 

date of request for assistance or at the time homeowner 

requested HAMP UP forbearance from their servicer. 

• Loan is in foreclosure. 

• Borrower owns other real property. 

• Borrower’s “hardship” is a result of voluntary resignation of 

employment. 

• The borrower is no longer eligible for unemployment benefits 

from the California Employment Development Department 

(EDD) benefit or such benefits will expire within 90 days. 

• Borrower consummated a “cash-out” refinance of the subject 

first lien mortgage property. 

o Refinancing for the sole purpose of obtaining a new 

interest rate and loan term is permissible. 

o Costs associated with the first mortgage refinance may 

be financed in the new loan. 

o Junior liens used to purchase the subject property first 

mortgage property are not excluded from eligibility. 

• Stand-alone second liens including home equity lines of credit 

are considered “cash-out.” Borrowers with junior liens that 

meet this description are not eligible for program assistance. 

• Borrower in an “active” bankruptcy is ineligible for program 

assistance consideration. Borrowers who have previously 

filed bankruptcy are eligible for consideration with proof of 

court order of “Dismissal” or “Discharge.” 

8. Structure of 

Assistance 

CalHFA MAC will structure the assistance as a non-recourse, noninterest bearing subordinate loan in favor of the Eligible Entity 

(CalHFA MAC) secured by a junior lien recorded against the 

property in the amount of the total reduced PITI+escrowed A and 

equal to the total amount of HHF unemployment assistance. At the 

conclusion of (3) three years, the subordinate loan will be forgiven 

and released. Loan funds will only be repaid to Eligible Entity 

(CalHFA MAC) in the event of a sale or refinance with sufficient net 

equity proceeds prior to forgiveness. Recovered funds will be 

recycled in order to provide additional program assistance until 

December 31, 2017, at which time any recovered funds will be 

returned to Treasury. 
TAMPA/139499.1

The lender/servicer shall be required to provide the borrower with a 

written approved forbearance plan for a period no less than three (3) 

months PITI+escrowed A. The lender/servicer forbearance plan may 

precede or follow the HHF program assistance. 

After December 31, 2017, any remaining or returned funds will be 

returned to Treasury. 

9. Per Household 

Assistance 

Up to $18,000 per household total (average funding of $14,455.43), 

equaling the lesser of $3,000 per month or 100% of PITI+escrowed 

A (and in all cases, subject to the HHF Program maximum benefit 

cap of $50,000 with respect to monies previously received under 

other HHF Programs, if any). 

10. Duration of 

Assistance 

Borrower participation in UMA is limited to six (6) months 

maximum. 

11. Estimated 

Number of 

Participating 

Households 

Approximately 60,531. This figure is based on loans with unpaid 

principal balances ranging from $200,000 to $400,000 with an 

average funding of $14,455.43. 

12. Program 

Inception / 

Duration 

A pilot of UMA will commence on or shortly after November 1, 

2010. Statewide launch of UMA is targeted to begin following 

January 1, 2011 and will last up to three (3) years or until funding is 

fully reserved. 

13. Program 

Interactions with 

Other HFA

Programs 

UMA will serve as a gateway to borrower programs aimed at 

reinstatement and principal reduction. 

14. Program 

Interactions with 

HAMP 

This benefit may precede or extend HAMP, including HAMP UP for 

temporary unemployment assistance which when combined may 

provide assistance for up to one year. HAMP UP currently offers a 

minimum of three months and up to six months for some borrowers. 

15. Program 

Leverage with 

Other Financial 

Resources 

The applicable servicer/lender is required to complement UMA 

assistance with a written approved forbearance plan for a period no 

less than three (3) months PITI+escrowed A. 

CalHFA MAC will request that the loan servicer waive fees (e.g., 

NSF and late charges). 

16. Qualify as an ; Yes  No 
TAMPA/139499.1

Unemployment 

Program 
TAMPA/139499.1

SCHEDULE B-2

California Housing Finance Agency Mortgage Assistance Corporation 

(“CalHFA MAC”) 

MORTGAGE REINSTATEMENT ASSISTANCE PROGRAM 

Summary Guidelines 

1. Program 

Overview 

The Mortgage Reinstatement Assistance Program (MRAP) is one of 

CalHFA MAC’s federally-funded programs developed to provide 

temporary financial assistance to eligible homeowners who wish to 

remain in their homes but are in imminent danger of losing their 

home to foreclosure. 

MRAP provides funds to assist income-qualified borrowers to help 

them cure their delinquent first mortgage loan arrearages, which 

may also include payments needed to reinstate their loans from 

foreclosure. 

2. Program Goals The MRAP program will prevent avoidable foreclosures by helping 

borrowers reinstate their past due first mortgage loans. 

MRAP will also mitigate the need for large reinstatement dollars to 

be capitalized with remaining loan balance, and thus, broaden the 

population of borrowers who otherwise may not qualify for 

modification. 

3. Target Population 

/ Areas 

MRAP is designed to target low-to-moderate income homeowners 

and address the needs of a borrower’s specific situation in lieu of 

targeting certain regions or counties. 

4. Program 

Allocation 

(Excluding 

Administrative 

Expenses) 

$129,400,000.00 

5. Borrower 

Eligibility Criteria 

• Borrower must qualify as a low-to-moderate income 

household, as follows: 

o Low-to-moderate income of 120% or less of the 

HCD (as defined by the California State Department 

of Housing and Community Development) Area 

Median Income, for a family of four, in the county 
TAMPA/139499.1

where borrower resides. 

o A loan financed in whole or in part by bonds that are 

tax-exempt under IRC section 143, the borrower is 

presumed to satisfy income limits. 

• Borrower must complete and sign a Hardship Affidavit / 3rd 

Party Authorization documenting the reason for the hardship. 

• Borrowers who have recently encountered a financial 

hardship due to their military service. 

• Borrower has adequate income to sustain modified mortgage 

payments per lender guidelines. 

• Borrower must agree to provide all necessary documentation 

to satisfy program guidelines established by CalHFA MAC. 

• Mortgage loan is delinquent or at risk of imminent default as 

substantiated by borrower’s hardship documentation. Loans 

in foreclosure are eligible. 

• General program eligibility is determined by CalHFA MAC, 

the housing counselor or servicer based on information 

received from the borrower. Program-specific eligibility is 

determined by CalHFA MAC on a first-come/first-approved 

basis until program funds and funding reserves have been 

exhausted. Loan servicer will implement the HHF program 

based on participation agreement terms and conditions. 

• Funding allocation will be tracked, monitored and performed 

by CalHFA MAC in a centralized processing operation. 

6. Property / Loan 

Eligibility Criteria 

• Property is encumbered by a first lien mortgage loan that 

was originated on or before January 1, 2009. 

• Current unpaid principal balance (UPB) of the first lien 

mortgage loan is not greater than $729,750 (GSE conforming 

limit for a one-unit property). 

• The property securing the mortgage loan must not be 

abandoned, vacant or condemned. 

• The applicant must own and occupy the single family, 1-4 

unit home (an attached or detached house or a condominium 

unit) located in California and it must be their primary 

residence. 

7. Program 

Exclusions 

• Borrower owns other real property. 

• Borrower’s “hardship” is a result of voluntary resignation of 

employment. 

• Borrower consummated a “cash-out” refinance of the subject 

first lien mortgage property. 

o Refinancing for the sole purpose of obtaining a new 

interest rate and loan term is permissible. 

o Costs associated with the first mortgage refinance 

may be financed in the new loan. 
TAMPA/139499.1

o Junior liens used to purchase the subject property 

first mortgage property are not excluded from 

eligibility. 

• Stand-alone second liens including home equity lines of 

credit are considered “cash-out.” Borrowers with junior 

liens that meet this description are not eligible for program 

assistance. 

• Loan is less than two (2) payments delinquent as of the date 

of request for assistance. 

• Borrower in an “active” bankruptcy is ineligible for program 

assistance consideration. Borrowers who have previously 

filed bankruptcy are eligible for consideration with proof of 

court order of “Dismissal” or “Discharge.” 

8. Structure of 

Assistance 

In the event that CalHFA MAC receives less than 100% match by 

the lender/servicer, CalHFA MAC will structure the assistance as a 

non-recourse, non-interest bearing subordinate loan in favor of the 

Eligible Entity (CalHFA MAC) secured by a junior lien recorded 

against the property in the amount of the HHF assistance. At the 

conclusion of (3) three years, the subordinate loan will be forgiven 

and released. Loan funds will only be repaid to Eligible Entity 

(CalHFA MAC) in the event of a sale or refinance with sufficient 

net equity proceeds prior to forgiveness. Recovered funds will be 

recycled in order to provide additional program assistance until 

December 31, 2017, at which time any recovered funds will be 

returned to Treasury. 

If the lender/servicer matches the assistance in an amount equal to or 

greater than 100% of the HHF Program assistance provided to the 

borrower, then the assistance is not required to be structured as a 

loan to the borrower. 

After December 31, 2017, any remaining or returned funds will be 

returned to Treasury. 

9. Per Household 

Assistance 

Up to $15,000 per household (average funding of $14,047.92) for 

PITI+escrowed A (principal, interest, tax, insurance and escrowed 

homeowner’s association dues) arrearages (and in all cases, subject 

to the HHF Program maximum benefit cap of $50,000 with respect 

to monies previously received under other HHF Programs, if any). 

10. Duration of 

Assistance 

Available on a one-time only basis, per household. 

11. Estimated 

Number of 

Approximately 9,211. This figure is based on loans with unpaid 

principal balances ranging from $200,000 to $400,000 with an 
TAMPA/139499.1

Participating 

Households 

average funding of $14,047.92. 

12. Program 

Inception / 

Duration 

A pilot of MRAP will commence on or shortly after November 1, 

2010. Statewide launch of MRAP is targeted to begin following 

January 1, 2011 and will last up to three (3) years or until funding is 

fully reserved. 

13. Program 

Interactions with 

Other HFA

Programs 

MRAP will serve as a gateway to other loss mitigation programs 

including loan modification which may include principal reduction, 

including other HHF Programs and the Principal Reduction 

Program. 

14. Program 

Interactions with 

HAMP 

MRAP will serve as a gateway to HAMP which may include 

principal reduction of borrower’s mortgage. 

15. Program Leverage 

with Other 

Financial 

Resources 

The goal of the program is for the applicable servicer/lender to 

match MRAP funds on a dollar-for-dollar basis. The matching 

funds will be paid no later than at the time of CalHFA MAC 

program funding. 

CalHFA MAC will require that the servicer waive all accrued and 

unpaid late charges and NSF fees for all payments funded with 

MRAP benefits. 

16. Qualify as an 

Unemployment 

Program 

 Yes ; No 
TAMPA/139499.1

SCHEDULE B-3

California Housing Finance Agency Mortgage Assistance Corporation 

(“CalHFA MAC”) 

PRINCIPAL REDUCTION PROGRAM 

Summary Guidelines 

1. Program 

Overview 

The Principal Reduction Program (PRP) is one of CalHFA MAC’s 

federally-funded programs developed with a goal to provide capital 

on a dollar-for-dollar matching basis with participating lenders to 

reduce over a three-year period the outstanding principal balances of 

qualifying properties with negative equity. 

PRP will provide monies to reduce the principal balance of the first 

mortgage loan for the purpose of establishing an appropriate level of 

debt for eligible borrowers with qualifying properties. 

2. Program Goals The PRP program will, in cooperation with participating lenders, 

leverage the HHF dollars by reducing the principal balances of 

underwater mortgages and provide an incentive for qualifying 

homeowners to remain in their homes during this period of steep 

declines in value. 

A reduction in principal through PRP can achieve desired income 

ratios and affordability for a borrower on the existing mortgage loan 

or can be used in conjunction with a loan modification. 

3. Target Population 

/ Areas 

PRP is designed to target low-to-moderate income homeowners and 

address the needs of a borrower’s specific situation in lieu of 

targeting certain regions or counties. 

4. Program 

Allocation

(Excluding 

Administrative 

Expenses) 

$790,488,123.52 

5. Borrower 

Eligibility Criteria 

• Borrower must qualify as a low-to-moderate income 

household, as follows: 

o Low-to-moderate income of 120% or less of the 

HCD (as defined by the California State Department 

of Housing and Community Development) Area 
TAMPA/139499.1

Median Income, for a family of four, in the county 

where borrower resides. 

o A loan financed in whole or in part by bonds that are 

tax-exempt under IRC section 143, the borrower is 

presumed to satisfy income limits. 

• Borrower must complete and sign a Hardship Affidavit / 3rd 

Party Authorization documenting the reason for the hardship. 

• Borrowers who have recently encountered a financial 

hardship due to their military service. 

• Borrower has adequate income to sustain modified mortgage 

payments per lender guidelines. 

• Borrower must agree to provide all necessary documentation 

to satisfy program guidelines established by CalHFA MAC. 

• Mortgage loan is delinquent or at risk of imminent default as 

substantiated by borrower’s hardship documentation. Loans 

in foreclosure are eligible. 

• General program eligibility is determined by CalHFA MAC, 

the housing counselor or servicer based on information 

received from the borrower. Program-specific eligibility is 

determined by CalHFA MAC on a first-come/first-approved 

basis until program funds and funding reserves have been 

exhausted. Loan servicer will implement the HHF program 

based on participation agreement terms and conditions. 

• Funding allocation will be tracked, monitored and performed 

by CalHFA MAC in a centralized processing operation.

6. Property / Loan 

Eligibility Criteria 

• Property is encumbered by a first lien mortgage loan that 

was originated on or before January 1, 2009. 

• Current unpaid principal balance (UPB) of the first lien 

mortgage loan is not greater than $729,750 (GSE conforming 

limit for a one-unit property). 

• The property securing the mortgage loan must not be 

abandoned, vacant or condemned. 

• The applicant must own and occupy the single family, 1-4 

unit home (an attached or detached house or a condominium 

unit) located in California and it must be their primary 

residence. 

7. Program 

Exclusions 

• Borrower owns other real property. 

• Borrower’s “hardship” is a result of voluntary resignation of 

employment. 

• Borrower fails to satisfy lender underwriting guidelines. 

• LTV of 115% or less. 

• Borrower consummated a “cash-out” refinance of the subject 

first lien mortgage property. 

o Refinancing for the sole purpose of obtaining a new 
TAMPA/139499.1

interest rate and loan term is permissible. 

o Costs associated with the first mortgage refinance 

may be financed in the new loan. 

o Junior liens used to purchase the subject property 

first mortgage property are not excluded from 

eligibility. 

• Stand-alone second liens including home equity lines of 

credit are considered “cash-out.” Borrowers with junior 

liens that meet this description are not eligible for program 

assistance. 

• Borrower in an “active” bankruptcy is ineligible for program 

assistance consideration. Borrowers who have previously 

filed bankruptcy are eligible for consideration with proof of 

court order of “Dismissal” or “Discharge.” 

8. Structure of 

Assistance 

In the event that CalHFA MAC receives less than 100% match by 

the lender/servicer, CalHFA MAC will structure the assistance as a 

non-recourse, non-interest bearing subordinate loan in favor of the 

Eligible Entity (CalHFA MAC) secured by a junior lien recorded 

against the property in the amount of the HHF assistance. At the 

conclusion of (3) three years, the subordinate loan will be forgiven 

and released. Loan funds will only be repaid to Eligible Entity 

(CalHFA MAC) in the event of a sale or refinance with sufficient 

net equity proceeds prior to forgiveness. Recovered funds will be 

recycled in order to provide additional program assistance until 

December 31, 2017, at which time any recovered funds will be 

returned to Treasury. 

If the lender/servicer matches the assistance in an amount equal to or 

greater than 100% of the HHF Program assistance provided to the 

borrower, then the assistance is not required to be structured as a 

loan to the borrower. 

After December 31, 2017, any remaining or returned funds will be 

returned to Treasury. 

9. Per Household 

Assistance 

Up to $50,000 per household (average funding of $31,449.58), less 

program monies previously received under other HHF Programs. 

10. Duration of 

Assistance 

Available on a one-time only basis, per household. 

11. Estimated 

Number of 

Participating 

Households 

Approximately 25,135. This figure is based on loans with unpaid 

principal balances ranging from $200,000 to $400,000 with an 

average funding of $31,449.58. 
TAMPA/139499.1

12. Program 

Inception / 

Duration 

A pilot of PRP will commence on or shortly after November 1, 

2010. Statewide launch of PRP is targeted to begin following 

January 1, 2011 and will last up to three (3) years or until funding is 

fully reserved. 

13. Program 

Interactions with 

Other HFA 

Programs 

PRP may be used in conjunction with MRAP aimed at 

reinstatement. 

14. Program 

Interactions with 

HAMP 

PRP may work in conjunction with a standard HAMP modification 

to help eligible borrowers achieve desired income ratios and 

affordability. PRP may not be combined or used in conjunction 

with the HAMP Principal Reduction Alternative (PRA). PRP 

layering with HAMP PRA is strictly prohibited. PRP funds are not 

eligible in any combination to qualify for HAMP PRA investor 

incentive compensation. 

15. Program Leverage 

with Other 

Financial 

Resources 

The goal of the program is for the applicable servicer/lender to 

match PRP funds on a dollar-for-dollar basis. The servicer/lender’s 

matching funds will be paid no later than at the time of CalHFA 

MAC program funding. 

CalHFA MAC will require that the servicer waive all accrued and 

unpaid late charges and NSF fees at the time the modification 

agreement is completed 

16. Qualify as an 

Unemployment 

Program 

 Yes ; No 
TAMPA/139499.1

SCHEDULE B-4

California Housing Finance Agency Mortgage Assistance Corporation 

(“CalHFA MAC”) 

THE TRANSITION ASSISTANCE PROGRAM 

Summary Guidelines 

1. Program 

Overview 

The Transition Assistance Program (TAP) is one of CalHFA MAC’s 

federally-funded programs developed to provide eligible 

homeowners with transition assistance when it is determined that 

they can no longer afford their home. 

TAP will be used in conjunction with short sale and deed-in-lieu 

programs to help borrowers make a smooth transition to housing. 

Borrowers will be required to occupy and maintain the property 

until the home is sold or returned to the lender as negotiated. 

Program funds would be available on a one-time only basis up to 

$5,000 per household and can be used or layered with other CalHFA 

MAC HHF Programs. No funds will go directly to the borrower. 

All funds will be sent to the Servicer subject to Servicer/Investor 

approval of short sale or deed-in-lieu of foreclosure. Funds are 

intended to help the borrower secure new housing (e.g., rent, 

moving expenses, and security deposits) and will be available for 

transition assistance counseling services. 

2. Program Goals CalHFA MAC envisions that these monies would be used to 

complement other federal or lender programs designed specifically 

to stabilize communities by providing assistance to borrowers who 

have suffered a financial hardship and as a result are no longer 

financially able to afford their mortgage payments. 

3. Target Population 

/ Areas 

TAP is designed to target low-to-moderate income homeowners and 

address the needs of a borrower’s specific situation in lieu of 

targeting certain regions or counties. 

4. Program 

Allocation

(Excluding 

Administrative 

Expenses) 

$32,300,000.00 
TAMPA/139499.1

5. Borrower 

Eligibility Criteria 

• Borrower must qualify as a low-to-moderate income 

household, as follows: 

o Low-to-moderate income of 120% or less of the 

HCD (as defined by the California State Department 

of Housing and Community Development) Area 

Median Income, for a family of four, in the county 

where borrower resides. 

o A loan financed in whole or in part by bonds that are 

tax-exempt under IRC section 143, the borrower is 

presumed to satisfy income limits. 

• Borrower must complete and sign a Hardship Affidavit / 3rd 

Party Authorization documenting the reason for the hardship. 

• Borrowers who have recently encountered a financial 

hardship due to their military service. 

• Borrower must agree to provide all necessary documentation 

to satisfy program guidelines established by CalHFA MAC. 

• Mortgage loan is delinquent or at risk of imminent default as 

substantiated by borrower’s hardship documentation. Loans 

in foreclosure are eligible. 

• General program eligibility is determined by CalHFA MAC, 

the housing counselor or servicer based on information 

received from the borrower. Program-specific eligibility is 

determined by CalHFA MAC on a first-come/first-approved 

basis until program funds and funding reserves have been 

exhausted. Loan servicer will implement the HHF program 

based on participation agreement terms and conditions. 

• Funding allocation will be tracked, monitored and performed 

by CalHFA MAC in a centralized processing operation. 

6. Property / Loan 

Eligibility Criteria 

• Property is encumbered by a first lien mortgage loan that 

was originated on or before January 1, 2009. 

• Current unpaid principal balance (UPB) of the first lien 

mortgage loan is not greater than $729,750 (GSE conforming 

limit for a one-unit property). 

• The property securing the mortgage loan must not be 

abandoned, vacant or condemned. 

• The applicant must own and occupy the single family, 1-4 

unit home (an attached or detached house or a condominium 

unit) located in California and it must be their primary 

residence. 
TAMPA/139499.1

7. Program 

Exclusions 

• Borrower owns other real property. 

• Borrower consummated a “cash-out” refinance of the subject 

first lien mortgage property. 

o Refinancing for the sole purpose of obtaining a new 

interest rate and loan term is permissible. 

o Costs associated with the first mortgage refinance 

may be financed in the new loan. 

o Junior liens used to purchase the subject property 

first mortgage property are not excluded from 

eligibility. 

• Stand-alone second liens including home equity lines of 

credit are considered “cash-out.” Borrowers with junior 

liens that meet this description are not eligible for program 

assistance. 

• Borrower in an “active” bankruptcy is ineligible for program 

assistance consideration. Borrowers who have previously 

filed bankruptcy are eligible for consideration with proof of 

court order of “Dismissal” or “Discharge.” 

8. Structure of 

Assistance 

TAP assistance will not be structured as a loan. After December 31, 

2017, any remaining or returned funds will be returned to Treasury. 

9. Per Household 

Assistance 

Up to $5,000 per household (average funding of $5,000.00). 

10. Duration of 

Assistance 

Available on a one-time only basis, per household. 

11. Estimated 

Number of 

Participating 

Households 

Approximately 6,460. This figure is based on loans with unpaid 

principal balances ranging from $200,000 to $400,000 with an 

average funding of $5,000.00. 

12. Program 

Inception / 

Duration 

A pilot of TAP will commence on or shortly after November 1, 

2010. Statewide launch of TAP is targeted to begin following 

January 1, 2011 and will last up to three (3) years or until funding is 

fully reserved. 

13. Program Leverage

with Other HFA 

Programs 

TAP benefits may be available to the borrower even if UMA, 

MRAP and/or PRP benefits have been utilized, subject to the HHF 

Program maximum benefit cap of $50,000. 

14. Program 

Interactions with 

HAMP 

TAP complements HAMP and HAFA. The funds will leverage 

monies being made available through HAFA. Servicer is required to 

follow HAFA guidelines for allowable costs. In cases where the 

Servicer has approved the borrower for a HAFA transaction, TAP 

dollars will be limited to $2,000 in order to maintain the $5,000 
TAMPA/139499.1

HHF Program maximum per household.

15. Program Leverage 

with Other 

Financial 

Resources 

None. 

16. Qualify as an 

Unemployment 

Program 

 Yes ; No 
TAMPA/139499.1

SCHEDULE C

PERMITTED EXPENSES

California 

 

 One-time / Start-Up Expenses: 

Initial Personnel $369,345.13

Building, Equipment, Technology $124,373.82

Professional Services $3,827,371.75

Supplies / Miscellaneous $33,650.00

Marketing /Communications $213,217.36

Travel $40,000.00

Website development /Translation $0.00

Contingency $22,741,544.19

 Subtotal $27,349,502.25 

 

Operating / Administrative Expenses: 

Salaries $2,611,419.00

Professional Services (Legal, Compliance, 

Audit, Monitoring) 

$67,176,330.00

Travel $178,750.00

Buildings, Leases & Equipment $288,000.00

Information Technology & Communications 

$202,790.00

Office Supplies/Postage and 

Delivery/Subscriptions 

$59,500.00

Risk Management/ Insurance $65,200.00

Training $0.00

Marketing/PR $435,000.00

Miscellaneous $90,000.00

 Subtotal $71,106,989.00 

 

 Transaction Related Expenses: 

Recording Fees $14,784,248.85

Wire Transfer Fees $469,073.50

 Counseling Expenses 

File Intake $30,000,000.00

Decision Costs $4,440,243.60

Successful File $0.00

Key Business Partners On-Going $0.00

 Subtotal $49,693,565.95 

 

 Grand Total $148,150,057.20

 

% of Total Award 7.50%

Award Amount $1,975,334,096.00