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Hardest Hit Fund Fifth Round Funding Allocation:

Phase 2 – Application Overview

In December 2015, Congress passed the Consolidated Appropriations Act, 2016 (the Act) that 

amended the Emergency Economic Stabilization Act of 2008 (as amended, EESA) as it relates to 

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

Fund or HHF). The Act gives the Secretary of the Treasury the ability to commit up to $2 billion 

in additional Troubled Asset Relief Program (TARP) funds to the 19 state housing finance 

agencies and designated “eligible entities” (collectively, HFAs) currently participating in the 

Hardest Hit Fund. The following guidelines apply to the HHF Fifth Round Funding Allocation

(Fifth Round): Phase 2 –Application, as announced by Treasury on February 19, and do not 

apply directly to funds allocated in Phase 1 – Formula. Only HFAs that currently participate in 

the Hardest Hit Fund may apply. The term of HHF will be extended by three years, to expire on 

December 31, 2020.

GUIDELINES FOR PHASE 2 – APPLICATION

HFAs who wish to request additional funding under Phase 2 must submit a written application 

specifying the amount of funds requested and meeting the criteria described below, no later than 

March 11, 2016. Treasury will review applications and score them in three categories (as 

outlined below) to determine if the key elements of each category are fully addressed (5 points), 

partially addressed (2 points) or not addressed (0 points). Please refer to Appendix A attached 

hereto for the Phase 2 – Application Checklist, which provides further information on how 

Treasury will score applications.

HFAs are encouraged to use data obtained from public, private, and program-specific data 

sources throughout the application, including sources such as the U.S. Bureau of Labor and 

Statistics, CoreLogic, Mortgage Bankers Association, or other industry-standard non-public 

sources, reports published by the HFA, HHF Quarterly Performance or Financial Reports, and 

other sources that provide either relevant economic information or demonstrate ongoing market 

needs related to foreclosure prevention or state housing market stabilization in specific HHF 

programs.

An HFA may request no more than 50% of previous allocations (i.e., Rounds 1-4) or $250

million (whichever is lower). The amount of the final allocation for each HFA will vary and 

depend on a number of factors, including, but not limited to, the content of the application 

submitted, applications submitted by other HFAs, and availability of funds. Treasury reserves 

the right to require an application meet a minimum score and/or to adjust the amount of the 

allocation based on the application’s score as compared to other applications. Treasury expects to 
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announce final allocations under Phase 2 on or about April 20, 2016. HFAs are not guaranteed 

to receive an allocation under Phase 2.

Note that funds allocated in the Fifth Round are subject to the “use or lose” provisions described 

on Schedule I attached hereto. In addition, Fifth Round funding is contingent on the execution of 

an amendment to the HFA’s existing Commitment to Purchase Financial Instrument and HFA 

Participation Agreement (together with related exhibits, schedules and other documents, the 

HPA), in a form that will be provided by Treasury at a later date.

APPLICATION CATEGORIES

CATEGORY I: CONDITIONS OF APPLICATION ELIGIBLITY

Please briefly describe how the application for Fifth Round funds supports foreclosure 

prevention and state housing market stabilization efforts, as well as the applicant’s performance 

to-date in the Hardest Hit Fund.

• Applications must specify each existing and/or proposed program for which the HFA 

intends to apply additional funding and explain how the program(s) support ongoing 

foreclosure prevention and state housing market stabilization efforts through HHF.

• Applications that do not support foreclosure prevention and state housing market 

stabilization efforts will not be considered.

• If an HFA has received a performance memorandum from Treasury, the HFA must 

include a justification with performance data to demonstrate how it has addressed and/or 

met Treasury’s expectations for performance improvement. All HFAs who have 

received a performance memorandum from Treasury must complete this 

component to be evaluated for additional funds.

CATEGORY II: DEMONSTRATED NEED (25 points)

Please briefly describe the current neighborhood stabilization and foreclosure prevention needs 

of your jurisdiction. Use relevant statistics as appropriate. 

• Consideration will be given to how clearly the need is articulated and the relevant data

provided to demonstrate the need. 

• Relevant statistics may include, for example, recent trends in monthly production of 

existing HHF program(s) (i.e., pipeline demand of current program) and current market 

indicators related to mortgage delinquencies, foreclosures, unemployment, negative 

equity, blight and/or vacancy.

• Any data or statistics provided should be accompanied by the relevant source and any 

assumptions included within the analysis provided.

CATEGORY III – PLAN OF ACTION (50 points)

Please briefly describe your Plan of Action for the requested funds, including the program(s)

identified in Category I and how such program(s) directly relate to the need outlined in Category

II. In addition, briefly describe any changes to your program term sheet(s), organizational

structure (e.g. hiring additional staff,) or processes and procedures (e.g. acquiring a new 

vendor), that are required to implement the Plan of Action. 

• Consideration will be given to: the program(s) ability to address the need(s) identified in 

Category II; whether design of the program(s) has a demonstrated record of effectiveness; 

the implementation timeline (i.e., the speed at which the program(s) can be implemented
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and meet defined targets); and the existing track record of the HFA in utilizing previously 

allocated HHF funds.

• The Plan of Action must include clearly defined program targets (e.g., households 

assisted, spending and utilization) that align with the need identified in Category II. 

• Any data or statistics provided must explain how the plan of action addressed the 

demonstrated need, as described in Category II. 

CATEGORY IV – ESTIMATED SPENDING PROJECTIONS (25 points)

Please provide estimated spending projections for both administrative expenses and program 

disbursements, on a quarterly basis, for all HHF allocations (including the Fifth Round Formula 

and Application Phases) through December 31, 2020. Estimates must demonstrate an ability to 

utilize the existing HHF allocations as well as the Fifth Round Funding. Estimates should 

indicate timing of any program or organizational changes required. 

• Consideration will be given to whether spending estimates are reasonable based on past 

performance of HFA and program(s) proposed, as well as efficient administration of the 

program(s).

• Estimated spending projections should take into account any necessary revisions to 

administrative expenses reflected on Schedule C to the HPA, and the cost of any program 

or organizational changes necessary to implement the Plan of Action as described in 

Category III.

• Relevant data may include, for example, projections based on HHF Quarterly 

Performance or Financial Reports, Draw Schedules, or other HHF program-specific data 

that accounts for operational and programmatic spending concerns.

INSTRUCTIONS FOR SUBMITTAL

Deadline

Applications must be submitted in PDF format to Hannah Resig at Hannah.Resig@Treasury.gov

by 5:00 p.m. EST on Friday, March 11, 2016. 

Format

Each application must include a one-page cover letter that provides: (i) the name, title, mailing 

address, e-mail address, and phone number of the individual designated to receive 

communications from Treasury concerning the Phase 2 application; and (ii) a certification 

statement that the HFA (i.e., both the state housing finance agency and its designated “eligible 

entity”) understands and agrees to the terms set forth in these guidelines.

Applications may not exceed 10, one-sided pages, prepared in 12-point, Times New Roman font 

with 1 inch margins. Applications must not include other documents or attachments including 

but not limited to generic marketing or sales information unless directly related to the ability of 

the HFA to execute the proposed plan. Applications must not rely on cross-references to other 

documents or websites unless directly related to the ability of the HFA to execute the proposed 

plan.
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Applications should not include any personally identifiable information (PII) other than names, titles 

and contact information for representatives of the HFA acting in their official capacity. Treasury reserves 

the right to make publicly available any application (in its entirety) submitted to Treasury, including on 

www.financialstability.gov.

Treasury Review

Applications will be scored according to the application checklist and reviewed by an 

interdisciplinary committee within Treasury. The purpose of the review is to confirm that 

applications adhere to the requirements of EESA and to evaluate how well the proposals fulfill 

the criteria described herein. Treasury may contact the HFA with questions as part of its review 

and may require the HFA to submit additional information. Treasury will notify the applicants 

once all applications have been reviewed and approved. Treasury expects to complete this 

process on or around April 20, 2016.

Communication with Treasury

HFAs are responsible for and encouraged to seek clarification on any aspect of these guidelines 

that they do not fully understand. All questions should be directed to: 

HFAInnovation@treasury.gov. 

Treasury, in its sole discretion, may respond orally or in writing to any question(s) submitted by 

an HFA or about an HFA’s application. Substantive questions should be submitted as soon as 

possible. No information gained from any communication may be considered in any way binding 

or limiting on Treasury.

Other Terms and Conditions

Treasury assumes no obligation to reimburse or otherwise compensate the HFA for expenses or 

losses incurred in connection with these guidelines, other than as specifically detailed in the 

HPA.

Treasury reserves the right to: (i) modify the requirements in these guidelines or withdraw these 

guidelines at any time; (ii) negotiate with each HFA and confirm any application considered 

acceptable in part or in total; (iii) request, orally or in writing, clarification of or additional 

information on an application; (iv) waive minor informalities or irregularities, or any 

requirement of these guidelines; and (v) reject an application that does not conform to the 

requirements of these guidelines or for other reasons .

This information is being collected under OMB Control Number 1505-0254. According to the 

Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not 

required to respond to, a collection of information unless it displays a valid control number.
Category Eligibility Criteria Point Max. Addressed Partially Addressed Not Addressed Total Points Reviewer Comments

Conditions of Application Eligibility

HHF Programs Under EESA Does the program support foreclosure prevention and neighborhood stabilization efforts as 

currently offered by HHF programs? N/A

Performance History If an HFA has received a performance memorandum from Treasury, did the HFA must include 

a justification with performance data that demonstrates how it has addressed and/or met 

Treasury's expectations for performance improvement.

N/A

Demonstrated Need (25 points)

Economic/Needs Indicators Does the application clearly articulate ongoing housing market needs? 5

State indicators exceed the national average; or applicable existing program application pipeline 

indicates the need is ongoing 5

Local indicators exceed the state average; or applicable existing program application pipeline in 

target areas indicate the need the is ongoing 5

Program Specific Needs Does the application clearly articulate how previous HHF funds were effectively used by the HFA 

to address identified needs? 5

Does the application clearly demonstrate why the need is ongoing or persistent on the state 

and/or local level? 5

Plan of Action (50 points)

Program Design Does the plan involve a) re-opening or providing additional funds to the HFA's existing 

program(s) with limited changes; or b) introduction of a new program approved in another 

state?

5

Does the plan align with the demonstrated needs presented? 5

Operational Capacity Does the HFA have a demonstrated operational structure in place and/or experience for 

implementing the plan? 5

Is there a reasonable staffing plan proposed, including training for new or inexperienced staff? 5

Program Targets Does the plan of action include program targets that will have a meaningful impact on the 

demonstrated need? 5

Does the plan target funding to the geographic areas or population(s) of greatest identified 

need? 5

Does the plan proposed address program targets that align with spending and utilization 

targets? 5

Do the program targets for households or properties assisted align with current production 

rates and demonstrated need? 5

Does the HFA have a reasonable marketing and promotions plan to achieve program targets? 5

Length of Time to Implement Can the HFA implement the plan through production phase (i.e. program launch, if applicable), 

within 90 calendar days of HPA amendment? 5

Estimated Spending Projections (25 points)

Operational/Administrative Costs Do the administrative spending projections and costs estimates reasonably reflect operational 

needs outlined in the plan of action? 5

Utilization Reasonability Do the estimated spending projections align with current utilization rates1

? 5

Utilization Projections Does the plan demonstrate the HFA's ability to utilize 70% of existing allocation by December 

31, 2016? 5

Does the plan demonstrate the HFA's ability to utilize all of its existing allocation by December 

31, 2017? 5

Does the plan demonstrate a reasonable way to utilize all requested funding by December 31, 

2020? 5

Total Score: 1

The utilization rate is calculated using the amount drawn-to-date by the HFA as a percentage of the HHF allocation.

APPENDIX A: HHF Fifth Round Funding Allocation: Phase 2 - Application Checklist
Hardest Hit Fund Fifth Round Funding Allocation:

Schedule I – Utilization Thresholds

The following guidance applies to the Hardest Hit Fund (HHF) Fifth Round Funding Allocation 

(Fifth Round) (Phase 1 – Formula and Phase 2 – Application), as announced by Treasury on 

February 19. Only state housing finance agencies (HFAs) that currently participate in the

Hardest Hit Fund are eligible for the Fifth Round. Any additional funds received will be subject 

to the following utilization thresholds:

• By December 31, 2016, an HFA must have utilized1 at least 70% of its existing allocation 

(i.e., Rounds 1-4).

o If the threshold is not met, the HFA will forfeit 50% of any funds allocated under 

the Fifth Round.

• By December 31, 2017, an HFA must have utilized at least 95% of its existing allocation

(i.e., Rounds 1-4).

o If the threshold is not met, the HFA will forfeit up to 100% of any funds allocated 

under the Fifth Round.

• By December 31, 2018, an HFA must have utilized at least 80% of its Total Allocation 

(i.e., Rounds 1-5).

o If the threshold is not met, the HFA will forfeit any funds allocated under the 

Fifth Round that have not been obligated on behalf of a unique HHF program 

participant (e.g., a homeowner) or property.

Fifth Round funds which are forfeited as described above will be reallocated to HFAs who meet 

the above utilization thresholds, using a methodology similar to that used in Phase 1 – Formula.

Treasury reserves the right to adjust the utilization thresholds in the future.

 1 Utilized refers to the amount drawn as of a given date by the HFA.