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SEVENTEENTH AMENDMENT TO

COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT

and

HFA PARTICIPATION AGREEMENT

This Seventeenth Amendment to Commitment to Purchase Financial Instrument and HFA

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

Schedule A attached hereto as the Seventeenth 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 set forth on Schedule A attached hereto, as previously amended by those

certain Amendments to Commitment to Purchase Financial Instrument and HFA Participation

Agreement dated as of their respective dates as set forth on Schedule A attached hereto (each, 

an “Amendment” and together with the Original HPA as amended thereby, the “Current

HPA”), 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 (12 U.S.C. 

5201 et seq.), as amended, and as the same may be amended from time to time (“EESA”);

WHEREAS, on February 19, 2016 Treasury announced that it would (i) extend the HHF 

Program through 2020, and (ii) make $2 billion of additional assistance available under the HHF 

Program (the “Fifth Round Funding”) to help prevent foreclosure and stabilize housing markets

in certain states that had previously received HHF Program funding for such purposes; and

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

memorialize the extension of the HHF Program, increase the amount of HHF Program funds

available to Eligible Entity hereunder, and make certain other changes to the terms of the Current 

HPA and the Exhibits and Schedules attached thereto.

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. End of Term. The definition of End of Term in Section 2(A)(14) of the Current 

HPA is hereby deleted and replaced with the following: 
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“End of Term” shall mean the last day of the calendar month in which the Eligible Entity 

makes the last disbursement of HHF Program funds in furtherance of the Services, which

shall occur no later than December 31, 2021 (or such later date as Treasury may 

determine in its sole discretion with written notice to Eligible Entity and HFA). For the 

sake of clarity, Capital Draws shall not be permitted after the End of Term other than for 

payment of Permitted Expenses.

B. Bring Down Certificate. Section 2(A)(15) of the Current HPA is hereby amended 

by (i) striking “on each anniversary of the Effective Date during the Term (as defined 

below)” and replacing it with “on each anniversary of the Effective Date through

September 30, 2016, and from and after October 1, 2016, no later than one hundred 

twenty (120) days after the end of each of their respective fiscal years”, and (ii) by adding 

to the end “A final certification shall be delivered by each of HFA and Eligible Entity on 

the Final Repayment Date (as defined in the Financial Instrument).”

C. Program Participation Cap. Section 3(D) of the Current HPA is hereby deleted in 

its entirety and replaced with the following: 

D. The value of this Agreement is limited to the amount set forth in Schedule A as the 

Program Participation Cap, as may be adjusted from time to time as set forth on Schedule 

F attached hereto (the “Program Participation Cap”). Notwithstanding anything to the 

contrary contained herein, 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.

D. Performance Reports. Section 4(A) is hereby amended by (i) striking the third 

sentence and replacing it with “HFA shall submit the Performance Report to Treasury or 

its designee no later than forty-five (45) days after the end of each calendar quarter and 

otherwise as requested by Treasury. After Treasury has communicated in writing that the 

Performance Report is in a form acceptable to Treasury, HFA shall promptly post the 

Performance Report to its website”; and (ii) adding to the end “A final Performance 

Report shall be delivered no later than forty-five (45) days after the end of the calendar 

quarter in which the End of Term occurs.”

E. Financial Reporting. Section 4(G) of the Current HPA is hereby deleted in its 

entirety and replaced with the following:

G. Each of HFA and Eligible Entity shall provide annual audited financial 

statements to Treasury no later than one hundred twenty (120) days after the end of 

its respective fiscal year, commencing with the first fiscal year ending after the 

Effective Date, and concluding with the fiscal year in which the End of Term occurs. 

Eligible Entity shall provide 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 concluding with the quarter in 

which the End of Term occurs.
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F. Term. Section 5(A) of the Current HPA is hereby deleted in its entirety and 

replaced with the following:

(A) The term of this Agreement (“Term”) 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. Subject to the foregoing, new Services may be undertaken (e.g., 

approval of assistance actions with respect to unique homeowners or properties, 

including, where applicable, final underwriting decisions and payment schedules), 

through and including December 31, 2020 (or such later date as may be determined 

by Treasury in its sole discretion upon prior written notice to Eligible Entity). 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 the 

End of Term, and that funds are to be reserved as set forth in Schedule C to pay for 

the cost of the same, through and including the Final Repayment Date.

G. Modifications. 

(a) Section 9(A) of the Current HPA is hereby amended by inserting “and except as 

expressly set forth herein,” after “Subject to Section 9.B.,”

(b) Section 9(B) of the Current HPA is hereby amended by adding the following at the 

end: 

Notwithstanding anything to the contrary contained herein, Treasury may approve 

revisions proposed by Eligible Entity and HFA to any Schedule or Exhibit attached 

hereto, by written notice to Eligible Entity and HFA, pursuant to a procedure 

established by Treasury in its sole discretion and provided to Eligible Entity and 

HFA. The applicable Schedule or Exhibit shall be deemed modified for all 

purposes hereunder as of the date such written notice is received pursuant to 

Section 8 hereof.

(c) Section 9(C) of the Current HPA is hereby amended by deleting the last sentence 

in its entirety.

H. Exhibit A. Exhibit A attached to the Current HPA is hereby deleted in its entirety 

and replaced with Exhibit A attached to this Amendment.

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

entirety and replaced with Schedule A attached to this Amendment.

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

entirety and replaced with Schedule B attached to this Amendment.

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

entirety and replaced with Schedule C attached to this Amendment.
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L. Schedule F. A new Schedule F is added to the Current HPA in the form attached 

to this Amendment as Schedule F.

M. Definitions. All references in the Current HPA to the "Agreement" shall mean the 

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

to the “Financial Instrument” shall mean the Second Amended and Restated Financial 

Instrument in the form attached to this Amendment as Exhibit A; and all references in the 

Current HPA to Exhibit A or Schedules A, B, C or F shall mean the Exhibit A or 

Schedules A, B, C or F attached to this Amendment. All references herein to the "HPA" 

shall mean the Current HPA, as further amended by this Amendment.

2. Substitution of Financial Instrument. 

Eligible Entity shall deliver to Treasury on the date hereof a Second Amended and 

Restated Financial Instrument in the form attached to this Amendment as Exhibit A. By 

executing this Amendment, Treasury, HFA and Eligible Entity authorize The Bank of 

New York Mellon to cancel the Financial Instrument previously delivered under the 

Current HPA against delivery of such Second Amended and Restated Financial 

Instrument and direct The Bank of New York Mellon to return the cancelled Financial 

Instrument to (or at the direction of) the Eligible Entity.

3. 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 Amendment, the Second Amended and Restated Financial 

Instrument, and any other closing documentation delivered to Treasury in connection

therewith, and to perform its obligations hereunder and thereunder.

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

this Amendment and any other closing documentation delivered to Treasury in 

connection therewith, and to perform its obligations hereunder and thereunder.
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4. Miscellaneous

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

are incorporated herein by this reference.

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

to them in the HPA.

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

any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such

prohibition or unenforceability without invalidating the remaining provisions of the HPA,

and no such prohibition or unenforceability in any jurisdiction shall invalidate such

provision in any other jurisdiction.

D. This 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 Amendment, the Second Amended and Restated Financial 

Instrument, and any other closing documentation delivered in connection therewith, shall be

treated as originals for all purposes.

[SIGNATURE PAGE FOLLOWS;REMAINDER OF PAGE 

INTENTIONALLY LEFT BLANK]
[Signature Page to Seventeenth Amendment to HPA – Arizona]

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

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

Instrument and HFA Participation Agreement as of the Amendment Date.

HFA: TREASURY:

STATE OF ARIZONA, ARIZONA 

DEPARTMENT OF HOUSING

UNITED STATES DEPARTMENT OF THE 

TREASURY

By: /s/ Michael Trailor By:

Name: Michael Trailor Name: Mark McArdle

Title: Director Title: Deputy Assistant Secretary for 

Financial Stability

ELIGIBLE ENTITY:

ARIZONA HOME FORECLOSURE 

PREVENTION FUNDING CORPORATION

By: /s/ Michael Trailor

Name: Michael Trailor

Title: Chairman 
EXHIBITS AND SCHEDULES

Exhibit A Form of Second Amended and Restated Financial Instrument

Schedule A Basic Information

Schedule B Service Schedules

Schedule C Permitted Expenses

Schedule F HHF Fifth Round Funding Reallocation Model
EXHIBIT A

FORM OF SECOND AMENDED AND RESTATED FINANCIAL INSTRUMENT

This Second Amended and Restated 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 “Commitment”), entered into as of the Effective Date, as 

modified by those certain Amendments to Commitment to Purchase Financial Instrument and 

HFA Participation Agreement dated as of the dates set forth on Schedule A to the Commitment

(together, the “Agreement”), by and among the United States Department of the Treasury 

(“Treasury”), the party designated as HFA in the Commitment (“HFA”) and Eligible Entity. 

This Second Amended and Restated Financial Instrument is effective as of May 3, 2016. All of 

the capitalized terms that are used but not defined herein shall have the meanings ascribed to 

them in the Agreement.

Recitals

WHEREAS, Eligible Entity executed and delivered that certain Amended and Restated Financial 

Instrument dated as of September 23, 2010 to Treasury (“Original Financial Instrument”); and

WHEREAS, Treasury and Eligible Entity desire to amend certain terms of the Original Financial 

Instrument regarding repayment of the Purchase Price in connection with the extension of the 

HHF Program through 2020 and availability of additional assistance under the HHF Program

Fifth Round Funding; and

WHEREAS, Treasury and the Eligible Entity desire to restate and replace the Original Financial 

Instrument in its entirety.

Accordingly, 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 Second Amended and Restated 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 Second Amended and Restated 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 (12 U.S.C. 5201 et seq.) as amended, as the same may 

be amended from time to time (“EESA”).

2. Repayment of Purchase Price. 

If a recipient of HHF Program funds repays any or all of the funds received from Eligible 

Entity in connection with the Services (“Repaid Funds”), and such repayment occurs on 

or before the Final Repayment Date (hereinafter defined), Eligible Entity shall deposit 

such Repaid Funds in the Depository Account and use such Repaid Funds to provide 

Services or to fund the Permitted Expenses to the extent the full amount as indicated on 

Schedule C to the Agreement has not been drawn from Treasury pursuant to Section 3(A) 

of the Agreement. Any Repaid Funds retained by Eligible Entity to fund Permitted 

Expenses shall correspondingly reduce the amount that Eligible Entity may draw from 

Treasury pursuant to Section 3(A) of the Agreement to fund Permitted Expenses.

For the sake of clarity, if a recipient of HHF Program funds repays any or all of the funds 

received from Eligible Entity in connection with the Services, and such repayment occurs 

after the Final Repayment Date, such repaid funds shall not be considered HHF Program 

funds. 

3. Final Repayment. In the event Eligible Entity is holding any HHF Program funds, 

including, but not limited to, amounts reserved for payment of Permitted Expenses and 

Repaid Funds, as of the date that is ninety (90) days after the End of Term (the “Final 

Repayment Date”), all such funds shall be returned to Treasury or its designee prior to

1:00pm Eastern Time on the Final Repayment Date. For the sake of clarity, no Capital 

Draws will be permitted after the Final Repayment Date.

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 Second Amended and Restated 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 Second Amended and Restated Financial Instrument by 

reference.

IN WITNESS WHEREOF, Eligible Entity hereby executes this Second Amended and Restated 

Financial Instrument on the date set forth below.

[INSERT FULL LEGAL NAME OF ELIGIBLE ENTITY]

By:

Name: 

Title: 

Date: ____________ __, 2016
A-1

SCHEDULE A

BASIC INFORMATION

Eligible Entity Information:

Name of the Eligible Entity: Arizona Home Foreclosure Prevention Funding 

Corporation

Corporate or other organizational form: Arizona Non-Profit corporation

Jurisdiction of organization: Arizona domiciliary

Notice Information:

HFA Information:

Name of HFA: State of Arizona, Arizona Department of 

Housing

Organizational form: Constituent Department of the State of Arizona

Date of Application: April 16, 2010

Date of Action Plan: September 1, 2010

Notice Information:

Program Participation Cap: $296,048,525.00

Portion of Program Participation Cap 

Representing Original HHF Funds: $125,100,000.00

Portion of Program Participation Cap 

Representing Unemployment HHF Funds: N/A

Rounds 1-4 Funding Allocation: $267,766,006.00

Round 5 Funding Allocation: $28,282,519.00

Permitted Expenses: $39,779,745.00

Closing Date: June 23, 2010

First Amendment Date: September 23, 2010

Second Amendment Date: September 29, 2010
A-2

Third Amendment Date: December 16, 2010

Fourth Amendment Date: January 26, 2011

Fifth Amendment Date: March 31, 2011

Sixth Amendment Date: May 25, 2011

Seventh Amendment Date: August 31, 2011

Eighth Amendment Date: March 29, 2012

Ninth Amendment Date: July 17, 2012

Tenth Amendment Date: August 24, 2012

Eleventh Amendment Date: June 6, 2013

Twelfth Amendment Date: October 30, 2013

Thirteenth Amendment Date: February 27, 2014

Fourteenth Amendment Date: October 10, 2014

Fifteenth Amendment Date: May 21, 2015

Sixteenth Amendment Date: December 18, 2015

Seventeenth Amendment Date: May 3, 2016

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.
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.
B-1-1

SERVICE SCHEDULE B-1

SAVEOURHOMEAZ

Principal Reduction Assistance

Summary Guidelines

1. Program Overview Principal Reduction Assistance is being administered by the 

Arizona Department of Housing (“ADOH”) on behalf of the 

Arizona Home Foreclosure Prevention Funding Corporation 

(“AHFPFC”). Assistance under this component is provided to 

homeowners who have suffered an eligible hardship to reduce 

the outstanding principal balances of qualifying properties.

Efforts under this component include monetary assistance for: 

(a) principal reduction of a borrower’s primary mortgage 

accomplished exclusively through either an interest rate 

reduction and/or term extension to achieve a permanent 

modification, or a reamortization of the remaining unpaid 

principal balance (“recast”) to achieve a lower monthly payment 

(“Modification or Reamortization PRA”); (b) principal reduction 

of a borrower’s primary mortgage contingent upon eligibility for 

a Home Affordable Refinance Program (“HARP”) mortgage 

refinance or other substantively similar mortgage refinance 

(“HARP PRA”); (c) reduction or elimination of an amount up to 

or equal to the existing non-interest-bearing forbearance that was 

the outcome of a prior loan modification (“Forbearance 

Elimination”); or (d) principal reduction of primary mortgages in 

significant negative equity positions for “non-delinquent” 

borrowers to an amount as close to 100% loan-to-value (“LTV”) 

ratio as the amount of per-household assistance will permit to 

reduce the risk of potential default by such borrowers (“Negative 

Equity Reduction”).

A borrower’s primary mortgage lender may agree to make a 

matching reduction to the principal balance of the primary loan.

 

2. Program Goals The goal of the Principal Reduction Assistance component is to 

help homeowners avoid foreclosure by reducing the principal 

balance of their primary mortgage to either (a) facilitate a 

permanent loan modification or recast that achieves an 

affordable monthly mortgage payment or (b) reduces a 

borrower’s negative equity position to an amount as close to 

100% LTV ratio as the amount of per-household assistance will 

permit. 
B-1-2

3. Target 

Population/Areas

The targeted populations are households whose income does not 

exceed 150% of Area Median Income (“AMI”).

It is projected that component assistance will be provided to 

targeted areas according to the following breakdown of counties. 

These projections are based on population, delinquent loans and 

pending foreclosures in these areas.

Maricopa County: 79% of component funds

Pima County: 9% of component funds

Pinal County: 9% of component funds

All other areas: 3% of component funds

4. Program Allocation 

(Excluding 

Administrative 

Expenses)

$97,334,171

5. Borrower 

Eligibility Criteria

General Eligibility Criteria Applicable to All Types of Principal 

Reduction Assistance:

• Property must be borrower’s primary residence.

• Income less than 150% of AMI. 

• Depending on the agreement with the servicer, eligibility will 

be determined through an application process and application 

evaluation by ADOH along with either approved counselors 

or the servicer.

• Requests for Mortgage Assistance with hardship and Dodd 

Frank Certification.

Additional Eligibility Criteria Applicable to Each Structure of 

Principal Reduction: 

(a) In the case of Modification or Reamortization PRA

(i.e. principal reduction of a borrower’s primary 

mortgage accomplished exclusively through either an 

interest rate reduction and/or term extension to achieve a 

permanent modification, or a reamortization of the 

remaining unpaid principal balance (“recast”) to achieve 

a lower monthly payment: 

• Eligible financial hardships: includes reduced income 

due to such hardships as underemployment, medical 

condition, divorce or death, as set forth in the 

program guidelines. 

• Post-assistance affordability: a monthly mortgage 

payment that does not exceed either (1) 31% of the 

borrower’s gross monthly income; or (2) 40% of the 

borrower’s gross monthly income for borrowers who 
B-1-3

have demonstrated an ability to make the modified 

mortgage payment for a 3-month period (“Expanded 

Affordability”).

(b) In the case of HARP PRA (i.e. principal reduction of a 

borrower’s primary mortgage contingent upon eligibility 

for a HARP mortgage refinance or other substantively 

similar mortgage refinance):

• Post-assistance affordability: determined by the 

lender’s approval of the HARP or other substantively 

similar mortgage refinance

(c) In the case of Forbearance Elimination PRA (i.e. 

reduction or elimination of an amount up to the existing 

non-interest-bearing forbearance that was the outcome of 

a prior loan modification):

• Eligible financial hardship: Borrower has an eligible 

forbearance. Eligible forbearances include a noninterest bearing forbearance that is the outcome of a 

prior loan modification, such as any forbearance 

structured through the Home Affordable Modification 

Program (“HAMP”) or other substantially similar 

loan modification.

• Pre-assistance affordability: 

o borrower must be in good standing with the 

modification 

o monthly mortgage payment must not exceed 

either (1) 31% of the borrower’s gross 

monthly income; or (2) 40% of the 

borrower’s gross monthly income for 

Expanded Affordability

(d) In the case of Negative Equity Reduction PRA (i.e. 

principal reduction of primary mortgages in significant 

negative equity positions for “non-delinquent” borrowers 

to an amount as close to 100% LTV ratio as the amount 

of per-household assistance will permit to reduce the risk 

of potential default by such borrowers):

• Eligible financial hardship: 

o “Severe Negative Equity” defined as: (1) a 

negative equity position in which LTV is 

120% or more or (2) a negative equity 

position in which 10% or more of unpaid 

principal balance (“UPB”) constitutes 

negative equity so long as such negative 

equity amount is at least $20,000

o borrower must not have liquid assets in 

excess of the total amount of assistance 

provided under this component (as defined in 
B-1-4

the program guidelines)

• Pre-assistance affordability: 

o borrower must be “non-delinquent” or made 

“non-delinquent” at the time of assistance

o monthly mortgage payment must not exceed 

either (1) 31% of the borrower’s gross 

monthly income; or (2) 40% of the 

borrower’s gross monthly income for 

Expanded Affordability

6. Property/Loan 

Eligibility Criteria

• Property must be owner-occupied.

• UPB of the mortgage(s) must be no greater than $500,000 

(including interest-bearing unpaid principal balance(s) and 

any existing non-interest-bearing forbearance balance(s)).

• Depending on the agreement with the servicer, servicer may 

not be required to approve a homeowner’s participation in 

the component if a trustee’s sale is scheduled to take place 

within seven days or less from date the servicer is notified of 

borrower eligibility.

• Severe Negative Equity.

• Property must be a single-family dwelling (1 to 4 units).

7. Program 

Exclusions

• Current unpaid principal balance(s) exceeds 150% of the 

homeowner’s purchase price. 

• Total assistance of $10,000 or less.

• The principal reduction contribution exceeds $100,000 (the 

maximum household assistance). 

• The principal reduction contribution exceeds the amount 

necessary to bring the outstanding mortgage balance to 100% 

of the property’s fair market value: except as applied to 5(a). 

• Properties with an outstanding UPB of the mortgage(s) that 

is greater than $500,000 (including interest-bearing unpaid 

principal balance(s) and any existing non-interest-bearing 

forbearance balance(s)).

8. Structure of 

Assistance

Depending on the agreement with the servicer, the structure of 

assistance may be provided in one of the following ways:

• In the case of Modification or Reamortization PRA, 

principal reduction assistance may be structured as a onetime up-front, forgivable loan in the amount of the assistance 

provided to eligible borrowers. Promissory notes evidencing 

these loans in favor of AHFPFC will be placed on the 

property as a junior lien. A forgiveness clause will extinguish 

the loan in the following manner: (a) the loan amount 

representing the amount necessary to bring the homeowner’s 
B-1-5

LTV down to 100% will be forgiven at the end of five (5) 

years, and (b) the remainder of the loan amount representing 

the amount of the loan that brought the homeowner’s LTV 

below 100% will be forgiven at the end of thirty (30) years, 

provided the borrower has satisfied all terms of the loan. The 

terms of these loans will be zero-interest, zero-payment for 

the duration of the loan. The loan will be considered 

satisfied upon expiration of the respective term and AHFPFC 

will release the lien connected with the note. These loans 

will be utilized to reduce a portion of the principal on the 

first mortgage loan, the amount of which may be matched by 

the primary lender/servicer. All or part of the loan funds will 

be repaid to AHFPFC in the event that the home increases in 

equity and a sale or a refinance yields excess equity proceeds 

(net of transaction expenses) to the borrower sufficient to 

repay all or a portion of the loan funds.

• In the case of HARP PRA, principal reduction assistance is 

structured as a one-time up-front installment evidenced by a 

promissory note with a five-year term. Assistance is 

contingent upon eligibility for a HARP or other substantively 

similar mortgage refinance.

• In the case of Forbearance Elimination PRA and 

Negative Equity PRA, principal reduction assistance may be

structured as a one-time up-front, forgivable loan in the 

amount of the assistance provided to eligible borrowers. 

Promissory notes evidencing these loans will be for a term of 

five (5) years in favor of AHFPFC and placed on the 

property as a junior lien. A forgiveness clause will extinguish 

the loan amount at the end of five (5) years, provided the 

borrower has satisfied all terms of the loan. The terms of 

these loans will be zero-interest, zero-payment for the 

duration of the loan. The loan will be considered satisfied 

upon expiration of a five-year term and AHFPFC will release 

the lien connected with the note. These loans will be utilized 

to reduce a portion of the principal on the first mortgage 

loan, the amount of which may be matched by the primary

lender/servicer. All or part of the loan funds will be repaid to 

AHFPFC in the event that the home increases in equity and a 

sale or a refinance yields excess equity proceeds (net of 

transaction expenses) to the borrower sufficient to repay all 

or a portion of the loan funds.

• Any proceeds that are returned to the component will be 

reutilized to assist additional homeowners in accordance with 

the Agreement.
B-1-6

9. Per Household 

Assistance

• $100,000 is the maximum amount of assistance.

• $60,000 is the estimated median amount of assistance.

• The principal reduction contribution must be no greater than 

$100,000 (the maximum household assistance).

• The principal reduction contribution must be no greater than 

the amount necessary to bring the outstanding mortgage 

balance to an amount as close to a 100% LTV ratio as the 

amount of per-household assistance will permit, except as 

applied to 5(a).

• Borrowers will not always receive the maximum amount of 

assistance.

10. Duration of 

Assistance

Assistance will be available to households on a one-time-only 

basis.

11. Estimated Number 

of Participating 

Households

It is anticipated that the Principal Reduction Assistance 

component will assist a minimum of 1,808 households in 

avoiding foreclosures.

12. Program 

Inception/Duration

• This component began in September 2010 and it is projected 

that assistance will be expended by December 31, 2021. 

• All funds still available on December 31, 2021 will be 

returned to Treasury in accordance with the Agreement.

13. Program 

Interactions with 

Other Programs 

(e.g. other HFA 

programs)

Borrowers may participate in other components, as long as the 

borrower meets the eligibility criteria of each component and 

combined total assistance received from all of the components 

does not exceed the lesser of: (a) the maximum household 

assistance of $100,000 or (b) the amount necessary to bring the 

outstanding mortgage balance to an amount as close to a 100% 

LTV ratio as the amount of per-household assistance will permit 

except as applied to 5(a). 

14. Program 

Interactions with 

HAMP

ADOH’s program may interact with aspects of the Making 

Home Affordable Program (“MHA”) as ADOH tries to leverage 

the resources provided by the MHA programs to expand the pool 

of borrowers who are eligible for HAMP or other MHA options. 

In some cases, the assistance the ADOH provides under HHF 

can supplement and extend assistance provided through MHA. 

To maximize the effectiveness of our foreclosure mitigation 

efforts, servicers should use reasonable efforts to ensure that 

Troubled Asset Relief Program funds are used efficiently and 

that HHF programs complement MHA programs. 

15. Program Leverage 

with Other 

In order to leverage the funds, ADOH will attempt to have the 

lender/servicer match any principal reduction provided through 
B-1-7

Financial Resources the Principal Reduction Assistance component. 
B-2-1

SERVICE SCHEDULE B-2

SAVEOURHOMEAZ

Second Mortgage Assistance Component

Summary Guidelines

1. Program Overview Under the Second Mortgage Assistance Component, assistance 

will be provided to eliminate second mortgages on eligible 

transactions. 

2. Program Goals The goals of the Second Mortgage Assistance Component are to 

help homeowners avoid foreclosure by eliminating a second 

mortgage if necessary to modify the terms of the primary loan, 

achieve affordability and to reduce the likelihood that a borrower 

will re-default under its primary loan as a result of the burden of 

a second mortgage. 

3. Target 

Population/Areas

The targeted populations are households whose income does not 

exceed 150% of Area Median Income (“AMI”).

It is projected that component assistance will be provided to 

targeted areas according to the following breakdown of counties. 

These projections are based on population, delinquent loans and 

pending foreclosures in these areas.

Maricopa County: 75% of component funds

Pima County: 8% of component funds

Pinal County: 9% of component funds

All other areas: 8% of component funds

4. Program Allocation 

(Excluding 

Administrative 

Expenses)

$12,053,697

5. Borrower Eligibility 

Criteria

• Eligible financial hardships include (a) reduced income due 

to under employment, medical condition, divorce or death; or 

(b) “Severe Negative Equity” defined as: (1) a negative 

equity position in which LTV is 120% or more or (2) a 

negative equity position in which 10% or more of unpaid 

principal balance (“UPB”) constitutes negative equity so 

long as such negative equity amount is at least $20,000.

• Property must be borrower’s primary residence.

• Income less than 150% of AMI.

• Requests for Mortgage Assistance with hardship and Dodd 

Frank Certification.

• Affordability for Home Affordable Refinance Program

(“HARP”) structured assistance is determined by the lender’s 
B-2-2

approval of the HARP or other substantively similar 

mortgage refinance, otherwise it is 31% of the household’s 

gross monthly income or up to 40% of the borrower’s gross 

monthly income for borrowers who have demonstrated an 

ability to make the modified mortgage payment for a 3-

month period (“Expanded Affordability”).

6. Property/Loan 

Eligibility Criteria

• Property must be owner-occupied.

• Unpaid principal balance (“UPB”) of the mortgage(s) must 

be no greater than $500,000 (including interest-bearing 

unpaid principal balance(s) and any existing non-interestbearing forbearance balance(s)).

• Property must be a Single-family dwelling (1 to 4 units).

7. Program Exclusions • Current UPB of the mortgage(s) exceeds 150% of the 

homeowner’s purchase price. 

• Assistance exceeds $60,000. 

• Assistance exceeds the amount necessary to bring the 

outstanding mortgage balance to 100% of the property’s fair 

market value.

• Properties with an outstanding UPB of the mortgage(s) that 

is greater than $500,000 (including interest-bearing unpaid 

principal balance(s) and any existing non-interest-bearing 

forbearance balance(s)).

8. Structure of 

Assistance

• The Second Mortgage Assistance Component will provide 

up-front, forgivable, loans to eligible borrowers. Promissory 

notes on the forgivable loans will be for a term of five (5) 

years in favor of the Eligible Entity and placed on the 

property as a junior lien. A forgiveness clause will extinguish 

the loan amount at the end of five (5) years, provided the 

consumer has satisfied all terms of the loan. The terms of the 

loan are zero-interest, zero-payment for the duration of the 

loan. The assistance loan will be considered satisfied upon 

expiration of five-year term and the Arizona Department of 

Housing (“ADOH”) will release the second lien connected 

with the note. These loans will be utilized to reduce a 

portion of the principal on the existing second mortgage and 

the remaining balance will be extinguished by the 

lender/servicer, if the assistance is less than the outstanding 

principal balance due. All or part of the loan funds will be 

repaid to ADOH in the event that the home increases in 

equity and a sale or a refinance yields excess equity proceeds 

(net of transaction expenses) to the borrower sufficient to 

repay all or a portion of the loan funds.
B-2-3

• Second Mortgage Assistance provided as a part of a HARP 

or other approved refinance will be provided in a one-time 

installment evidenced by a promissory note with a five-year 

term. If coupled with Principal Reduction Assistance 

component on a first mortgage the amount of the promissory 

note will be for the combined total of all assistance under 

both components. 

• Any proceeds that are returned to the program will be 

reutilized to assist additional homeowners in accordance with 

the Agreement.

9. Per Household 

Assistance

• $60,000 is the maximum amount of assistance. 

• $50,000 is the estimated median amount of assistance.

10. Duration of 

Assistance

Second mortgage assistance will be disbursed in full in a onetime payment contingent upon the closing of the transaction. 

11. Estimated Number 

of Participating 

Households

It is anticipated that the Second Mortgage Assistance Component 

will assist a minimum of 407 households.

12. Program 

Inception/Duration

• This program component began in September 2010 and it is 

projected that assistance will be expended by December 31, 

2021. 

• All funds still available on December 31, 2021 will be 

returned to Treasury in accordance with the Agreement.

13. Program 

Interactions with 

Other Programs 

(e.g. other HFA 

programs)

ADOH will, on behalf of an approved seller, attempt to 

extinguish the second mortgage as part of a short sale that is part 

of the Short Sale Assistance Component. Assistance is capped at 

$8,500 when combined with the Short Sale Assistance 

Component. Borrowers may participate in other components, as 

long as borrower meets the eligibility criteria of each component 

and the combined total assistance received from all of the 

components is the lesser of the individual component caps or the 

total Program cap of $100,000.
B-2-4

14. Program 

Interactions with 

HAMP

ADOH’s program may interact with aspects of the Making 

Home Affordable Program (“MHA”) as ADOH tries to leverage 

the resources provided by the MHA programs to expand the pool 

of borrowers that are eligible for the Home Affordable 

Modification Program (“HAMP”) or other MHA options. In 

some cases, the assistance the ADOH provides under HHF can 

supplement and extend assistance provided through MHA. To 

maximize the effectiveness of our foreclosure mitigation efforts, 

servicers should use reasonable efforts to ensure that TARP 

funds are used efficiently and that HHF programs complement 

MHA programs.

15. Program Leverage 

with Other 

Financial Resources

N/A
B-3-1

SERVICE SCHEDULE B-3

SAVEOURHOMEAZ

Unemployment/Underemployment/Reinstatement Mortgage Assistance Component

Summary Guidelines

1. Program Overview The Unemployment/Underemployment/Reinstatement 

Mortgage Assistance Component (“UMA”) will provide 

mortgage relief for qualified unemployed and underemployed 

borrowers. 

Arizona Department of Housing (“ADOH”) may, on behalf of 

the eligible borrower, bring the first mortgage and any junior 

mortgage (as applicable) current by curing all past due 

payments, accrued interest and legal fees. Additional benefits 

may consist of a full monthly mortgage payment to the 

servicer until the applicable program cap is reached or the 

borrower becomes sufficiently employed and is able to sustain 

the payment at 31% of gross monthly income. 

The borrower will be required to pay a portion of their 

monthly mortgage payment to ADOH in the amount of 31% 

of the household gross monthly income, excluding 

unemployment benefits.

ADOH will be responsible for ongoing monitoring of 

borrowers to ensure continued eligibility if receiving monthly 

assistance.

2. Program Goals This Component will provide assistance for a set period of 

time and/or maximum dollar amount. The purpose of the 

Component is to assist borrowers until they can obtain 

sufficient income to resume scheduled mortgage payments or 

qualify for a modified mortgage payment. 

• Sustain the unemployed/underemployed borrower’s 

monthly mortgage payment until the borrower can or 

the maximum assistance has been provided.

• Maintain the borrower’s contribution towards its 

monthly mortgage payment at 31% of his or her 

current gross monthly income for the duration of the 

assistance, excluding unemployment benefits.

3. Target The target population includes eligible homeowners whose 
B-3-2

Population/Area hardship is caused by unemployment or underemployment.

4. Program Allocation

(Excluding 

Administrative 

Expenses)

$74,251,694

5. Borrower Eligibility 

Criteria

General Requirements:

• One or more of the responsible borrowers must be 

unemployed/underemployed.

• Borrowers must participate in quarterly (face-to-face 

when possible) continued eligibility validation.

• Borrower must occupy the subject property as his or 

her primary residence during the assistance 

disbursement period.

• Income less than 150% of Area Median Income 

(“AMI”). 

• Requests for Mortgage Assistance with hardship and 

Dodd Frank Certification.

Additional Unemployment Requirements:

• If the eligible borrower is unemployed, the borrower 

must provide proof he or she applied for 

unemployment benefits and was approved or denied 

(UB107, UB100, Claim status report) for reasons 

identified as acceptable within the Component’s 

guidelines.

Additional Underemployment Requirements

• If the eligible borrower is underemployed, the 

borrower must provide documentation of a significant 

reduction of income, as specified in the program 

guidelines, resulting in a housing payment greater than 

31% of his or her gross monthly income.

Additional Reinstatement Assistance Requirements:

• Borrower must demonstrate that the hardship caused 

by unemployment or underemployment has passed. 

For example, one of the borrowers was unemployed 

and now the same borrower is employed, eliminating 
B-3-3

the hardship.

• There must be a correlation between the qualified 

hardship and the delinquency in the mortgage 

payments.

• Borrowers must demonstrate that they now have the 

ability to afford the monthly mortgage payment. 

Affordability is defined as the payment being at or 

under 31% of the borrower’s documented gross 

monthly income.

• A monthly mortgage payment that does not exceed 

40% of the borrower’s gross monthly income for 

borrowers who have demonstrated an ability to make 

the modified mortgage payment for a 3-month period 

(“Expanded Affordability”).

• The reinstatement assistance may be inclusive of 

junior mortgages (as applicable) and subject to 

Component eligibility criteria.

6. Property/Loan 

Eligibility Criteria

• Unpaid principal balance (UPB) of the mortgage(s) must 

be no greater than $500,000 (including interest-bearing 

unpaid principal balance(s) and any existing non-interestbearing forbearance balance(s)). 

• Property must be owner-occupied.

• Mortgage(s) must be delinquent by at least two (2) 

payments; provided, however, in the case of a borrower 

that is current or has only one payment due and unpaid by 

the end of the month in which it is due, and makes 

application for Component assistance, such borrower will 

be evaluated to determine if it is at risk of imminent 

default.

• Component payments must go toward a first mortgage 

except when reinstating a junior mortgage.

• Property must be a single-family dwelling (1 to 4 units).

7. Program Exclusions • Properties that have an outstanding mortgage(s) in excess 

of 150% of the purchase price.

• Properties that have an outstanding mortgage(s) in an 

amount greater than $500,000.

8. Structure of 

Assistance

• ADOH will execute and record a non-recourse, noninterest bearing forgivable note of no more than five (5) 

years in duration, secured by a junior lien on the property. 

The note amount will be forgiven at the completion of the 

loan term. All or part of the loan funds will be repaid to 

ADOH in the event that the home increases in equity and a 
B-3-4

sale or a refinance yields excess equity proceeds (net of 

transaction expenses) to the borrower sufficient to repay 

all or a portion of the loan funds. 

• Any proceeds that are returned to the program will be 

reutilized to assist additional homeowners in accordance 

with the Agreement.

9. Per Household 

Assistance

Servicers have no responsibility for monitoring individual 

program participation and are not required to refund payments 

received that exceed individual program caps. 

• Original approved monthly mortgage assistance of 

$2,000. Later adjustments to the monthly mortgage 

assistance may exceed the $2,000 a month maximum. 

Assistance is available for a maximum of twenty-four 

(24) months. 

• Upfront reinstatement assistance required by servicers 

in order for the homeowner to participate in UMA will 

be limited to twelve (12) months of monthly mortgage 

payment assistance in order for the homeowner to have 

available at least twelve (12) months of monthly 

mortgage payment assistance.

• Maximum amount of assistance will be limited to a cap 

of $60,000.

10. Duration of 

Assistance

Servicers have no responsibility for monitoring payment 

duration. 

• Up to twenty-four (24) months’ of mortgage payment 

assistance.

• Benefits may be provided for up to two (2) months 

post re-employment, provided the twenty-four (24) 

months’ maximum of mortgage payment assistance has 

not been met.

• Borrowers whose payments remain unaffordable to 

them at the end of the twenty-four (24) month UMA 

term, may be provided an extended term of mortgage 

assistance for six (6) additional months. During the 

extended term the homeowner will make no 

contribution toward the mortgage payment and will be 

required to meet with their housing counselor to adopt 

a transition plan.

11. Estimated Number of 

Participating 

It is anticipated that the Unemployment/Underemployment 

Mortgage Assistance Component will assist a minimum of 

4,211 households.
B-3-5

Households

12. Program 

Inception/Duration

• This component began in March 2011 and assistance is 

expected to be expended by December 31, 2021. 

• All funds still available on December 31, 2021 will be 

returned to Treasury in accordance with the Agreement.

13. Program Interactions 

with Other Programs 

(e.g. other HFA 

Programs)

Borrowers may participate in other components, as long as the 

borrower meets the eligibility criteria of such component and 

combined total assistance received from all of the components 

is the lesser of the individual component caps or total program 

cap of $100,000.

14. Program Interactions 

with HAMP

ADOH’s program may interact with aspects of the Making 

Home Affordable Program (“MHA”) as ADOH tries to 

leverage the resources provided by the MHA programs to 

expand the pool of borrowers that are eligible for Home 

Affordable Modification Program (“HAMP”) or other MHA 

options. In some cases, the assistance the ADOH provides 

under HHF can supplement and extend assistance provided 

through MHA. To maximize the effectiveness of our 

foreclosure mitigation efforts, servicers should use reasonable 

efforts to ensure that TARP funds are used efficiently and that 

HHF programs complement MHA programs. 

15. Program Leverage 

with Other Financial 

Resources

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

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

If the loan is reinstated or modified following ADOH

mortgage assistance, servicers will waive all administrative 

fees accrued since the beginning of the delinquency.
B-4-1

Doc#: US1:10590310v3

SERVICE SCHEDULE B-4

SAVEOURHOMEAZ

Short Sale Assistance Component

Summary Guidelines

1. Program Overview Short Sale Assistance Component will provide the eligible 

seller the funds needed to relocate or secure a lease option 

purchase agreement on the property when a short sale has 

been approved by the homeowner’s servicer. It will provide 

much needed enhancements to the short sale process for 

qualified sellers.

The Arizona Department of Housing (“ADOH”) is responsible 

for screening sellers to determine program eligibility and 

providing confirmation to the seller and servicer/lender that it 

intends to provide assistance to the seller.

Servicers may refer potentially eligible sellers to ADOH.

Depending on the agreement with the servicer and or 

purchaser of the subject property, one of two methods will be 

used to provide short sale assistance:

• Assistance may be provided in order to facilitate the 

short sale.

• Assistance may be provided in order to facilitate a 

short sale lease option transaction.

The structure of these two types of assistance is further 

discussed in Section 8.

ADOH may provide funds directly to the homeowner as a part 

of the short sale closing/funding process but not prior to 

closing.

2. Program Goals Short Sale Assistance Component was designed to help 

stabilize communities by providing assistance to consumers in 

unrecoverable situations to transition from homeownership to 

renting as well as enhance the marketability of short sale 

properties and accelerate the stabilization of property value.

3. Target The targeted populations are households whose income does 
B-4-2

Population/Area not exceed 150% of Area Median Income (“AMI”).

4. Program Allocation 

(Excluding 

Administrative 

Expenses)

$1,261,490

5. Borrower Eligibility 

Criteria

• Lender-approved short sale.

• Purchase and Sale Agreement.

• Income less than 150% of AMI.

• Requests for Mortgage Assistance with hardship and Dodd 

Frank Certification.

6. Property/Loan 

Eligibility Criteria

• Property must have been owner-occupied within the last 

12 months.

• Unpaid principal balance (“UPB”) of the mortgage(s) must 

be no greater than $500,000 (including interest-bearing 

unpaid principal balance(s) and any existing non-interestbearing forbearance balance(s)).

• Property must be a Single-family dwelling (1 to 4 units)

7. Program Exclusions • Property located outside of Arizona.

• Properties with an outstanding UPB of the mortgage(s) 

that is greater than $500,000.

• Sellers who apply for assistance after the short sale has 

been completed. 

• Sellers who are executing a “strategic default” 

(determination made through program underwriting 

guidelines).

• Properties that have an outstanding mortgage(s) in an 

amount greater than $500,000 (including interest-bearing 

unpaid principal balance(s) and any existing non-interestbearing forbearance balance(s)).

8. Structure of 

Assistance

Assistance under this component will be structured as a onetime installment to the appropriate party.

When provided to facilitate a short sale, assistance may be 

structured in the following manner:

• Transition assistance may be available to the seller.

• Seller-paid closing cost assistance on behalf of the 

buyer when applicable.

• Assistance to extinguish junior liens when applicable.
B-4-3

When provided to facilitate a short sale with a lease purchase 

option, assistance may be structured in the following manner:

• Lease Purchase Option (“LPO”) for the subject 

property between the seller and the buyer.

• Transaction fee paid to the buyer on behalf of the 

seller.

• Property maintenance cash reserve payment paid to the 

buyer on behalf of the seller.

• Financial assistance when the sales price exceeds 80% 

of the Broker Price Opinion (“BPO”) used to 

determine the sales price. These funds will be paid 

directly to the current lender to satisfy the short sale 

pay-off balance as part of the short sale closing 

process.

9. Per Household 

Assistance

• Maximum assistance for short sale assistance shall be 

$25,000, in accordance with program guidelines.

• Maximum assistance for Short Sale Assistance Component 

with a lease purchase option shall be $66,000, in 

accordance with program guidelines, including when 

combined with other programs.

10. Duration of 

Assistance

Program is a one-time payment per seller household, made 

upon close of escrow on the short sale.

11. Estimated Number of 

Participating 

Households

Based on ADOH eligibility criteria and available funding, it is 

anticipated that the Short Sale Assistance Component will 

assist a minimum of 163 households. 

12. Program 

Inception/Duration

This component began in June 2011 and it is projected that 

assistance will be expended by December 31, 2021. All funds 

still available on December 31, 2021 will be returned to 

Treasury in accordance with the Agreement.

13. Program Interactions 

with Other Programs 

(e.g. other HFA 

Programs)

Borrowers may participate in other components, as long as the 

borrower meets the eligibility criteria of each component and 

combined total assistance received from all of the components 

is the lesser of the individual component caps or the total 

Program cap of $100,000. Sellers participating in Home 

Affordable Foreclosure Alternative (“HAFA”) Assistance may 

receive up to $1,500 for relocation assistance.
B-4-4

14. Program Interactions 

with HAMP

ADOH’s program may interact with aspects of the Making 

Home Affordable Program (“MHA”) as ADOH tries to 

leverage the resources provided by the MHA programs to 

expand the pool of borrowers that are eligible for Home 

Affordable Modification Program (“HAMP”) or other MHA 

options. In some cases, the assistance the ADOH provides 

under HHF can supplement and extend assistance provided 

through MHA. To maximize the effectiveness of our 

foreclosure mitigation efforts, servicers should use reasonable 

efforts to ensure that TARP funds are used efficiently and that 

HHF programs complement MHA programs.

15. Program Leverage 

with Other Financial 

Resources

Short sale assistance may be combined with lease purchase 

options funded by a third party.
B-5-1

Doc#: US1:10590310v3

SERVICE SCHEDULE B-5

SAVEOURHOMEAZ (SOHAZ)

Down Payment Assistance (DPA)

Summary Guidelines

1. Program

Overview

The Down Payment Assistance (DPA) Program will provide an 

incentive to qualified homebuyers to purchase a primary

residence in targeted areas in Arizona. Providing incentives to 

qualified homebuyers in housing markets that have been hardest 

hit by serious delinquency, negative equity, distressed sales, and 

foreclosures will strengthen demand in those areas, stabilize 

housing prices and prevent future foreclosures. This Program 

will be offered within 17 municipalities in Arizona.

2. Program Goals The goal of the DPA Program is to prevent future 

foreclosures by assisting with the stabilization of housing

prices in targeted areas. The Arizona Home Foreclosure 

Prevention Funding Corporation (AHFPFC) will identify

meaningful indicators that will enable them to track and

quantify the DPA Program’s impact in the targeted areas.

3. Target 

Population/Areas

Targeted areas (“Targeted Area”) are as follows: 

This component will be offered within 17 municipalities in 

Arizona, to include: Arizona City, Avondale, Buckeye, Casa 

Grande, Coolidge, Douglas, El Mirage, Fort Mohave, Goodyear, 

Huachuca City, Laveen, Maricopa, Red Rock, Sierra Vista, 

Snowflake, Tucson, and Yuma.

For these specific areas, AHFPFC evaluated five (5) housing 

market distress indicators across the entirety of Arizona. Each 

Targeted Area exceeded the statewide rate in at least four (4) out 

of the five (5) distressed housing market indicators which 

include: change in sale price from one year ago; REO sales rate; 

Short sales rate; Negative Equity; and the Foreclosure Rate. 

4. Program Allocation 

(Excluding 

Administrative 

Expenses)

$71,367,728
B-5-2

Doc#: US1:10590310v3

5. Borrower Eligibility 

Criteria

Eligible borrowers must qualify for and meet all requirements of

the Arizona Housing Finance Authority’s (AzHFA) or Arizona 

Industrial Development Authority’s Pathway to Purchase Home 

Loan Program. Allowable first mortgage loans will be ”Qualified 

Mortgages” (QM) that are 30-year, fixed-rate loans from the 

Federal Housing Administration (FHA), U.S. Department of 

Veterans Affairs (VA), U.S. Department of Agriculture – Rural 

Development (RD), Fannie Mae HFA Preferred, and Freddie 

Mac HFA Advantage. Eligible borrowers must also meet the 

following criteria:

• Borrower(s) must be a first-time homebuyer. For 

purposes of the DPA Program, a first-time homebuyer is 

defined as someone who has not had an ownership 

interest in their primary residence in the past three years 

or qualifies under either a Veteran’s Exception (as 

defined in the DPA Program Guide) or is purchasing a 

home in a Federally Designated Targeted Area (as 

defined in the DPA Program Guide).

• Borrower(s) income not to exceed 150% of the State 

Median Income as determined by HUD.

• Purchase Price limit is four (4) times the annual income 

limit.

• Each borrower must complete a homebuyer education 

course before closing. The homebuyer education 

requirement may be met by taking a pre purchase course 

through an internet-based program developed by 

mortgage insurance companies, such MGIC or Genworth 

Financial or through another HUD-approved homebuyer 

education provider. 

• The homebuyer will work through one of the approved 

and participating mortgage lenders or a mortgage lender 

participating in one of the IDA’s comparable homebuyer 

programs. The lender will be the borrower’s point of 

contact throughout the process, working with the 

homebuyer to obtain a qualifying mortgage and 

registration for the DPA loan.

• Each borrower will be required to provide a satisfactory 

Dodd-Frank certificate.
B-5-3

Doc#: US1:10590310v3

6. Property/Loan 

Eligibility Criteria

• The property must be a single-family home, a condominium 

unit, a townhome, or a two-four family dwelling unit of which 

one unit is to be occupied by the mortgagor as his or her 

principal residence.

• Must be the borrower’s primary residence.

• Property must be located in a Targeted Area.

• Meet all applicable DPA, Ginnie Mae (FHA, VA, USDA-RD) 

or GSE (Fannie Mae & Freddie Mac) underwriting guidelines.

• Must be a resale of an existing property.

• Property must be within the purchase price limit of no more 

than four (4) times the annual income limit established for the 

program.

7. Program Exclusions • Borrowers, properties and loans not assisted through the 

Pathway to Purchase Home Loan Program or comparable IDA 

homebuyer program.

• Dodd-Frank exclusion for having been convicted of a 

mortgage-related felony in the past ten years.

8. Structure of Assistance Down payment assistance, including reasonable and customary 

closing costs, will be made available to homeowners as follows: 

Assistance will be structured as a one-time up-front, forgivable 

loan in the amount of the assistance provided to eligible 

borrowers. A promissory note evidencing the loan will be for a 

term of five (5) years in favor of AHFPFC and placed on the 

property as a junior lien. A forgiveness clause will extinguish the 

loan amount at the end of five (5) years, provided the borrower 

has satisfied all terms of the loan. The terms of these loans will 

be zero-interest, zero-payment for the duration of the loan. The 

loan will be considered satisfied upon expiration of a five-year 

term and AHFPFC will release the lien connected with the note. 

All or part of the loan funds will be repaid to AHFPFC in the 

event that a sale or a refinance yields excess equity proceeds (net 

of transaction expenses) to the borrower sufficient to repay all or 

a portion of the loan funds.

Any proceeds that are returned to the component will be 

reutilized to assist additional homeowners in accordance with 

the Agreement.

9. Per Household 

Assistance

The lesser of 10 percent of the purchase price amount or 

$20,000.
B-5-4

Doc#: US1:10590310v3

10. Duration of Assistance DPA Program funds will be used to reimburse the Arizona 

Housing Finance Authority, Arizona Industrial Development 

Authority, or a local Industrial Development Authority who prefunds the DPA at closing once it is determined that all DPA 

component requirements have been met. Funds may also be used 

to reimburse towards a homebuyer assisted through a local IDA 

homebuyer program that meets all program requirements.

11. Estimated Number of 

Participating 

Households

It is anticipated that the DPA Program will assist approximately 

4,261 households.

12. Program 

Inception/Duration

The DPA Program will begin in March 2016 and it is projected

that assistance will be expended through 2021.

13. Program Interactions 

with Other Programs 

(e.g. other HFA 

programs)

The DPA Program will take advantage of an existing

infrastructure of participating lenders who are already actively 

originating Pathway to Purchase Home Loans or lenders 

participating in a local IDA homebuyer program. If the

borrower has received HHF assistance under any other

Program Component, they will be excluded from receiving 

assistance under this component.

Any borrower receiving funds from the DPA Program will not 

be eligible for other down payment assistance programs 

offered by the Arizona Housing Finance Authority or Arizona 

Industrial Development Authority.

14. Program Interactions 

with HAMP

None.

15. Program Leverage with 

Other Financial 

Resources

None. 
C-1

SCHEDULE C

PERMITTED EXPENSES

Arizona

Program Duration (years)

One-time / Start-Up Expenses:

Initial Personnel $59,470.00

Building, Equipment, Technology $6,379.00

Professional Services $57,650.00

Supplies / Miscellaneous $0.00

Marketing /Communications $126.00

Travel $1,877.00

Website development /Translation $67,147.00

Contingency $0.00

Subtotal $192,649.00

Operating / Administrative Expenses:

Salaries $13,199,156

Professional Services (Legal, Compliance, Audit, 

Monitoring)

$1,647,728

Travel $56,650

Buildings, Leases & Equipment $0

Information Technology & Communications $475,000

Office Supplies/Postage and Delivery/Subscriptions $900,000

Risk Management / Insurance $0.00

Training $4,000.00

Marketing/PR $1,808,099

Miscellaneous $1,540,000

Subtotal $19,630,633

Transaction Related Expenses:

Recording Fees $8,532,736

Wire Transfer Fees $0.00 

Counseling Expenses

File Intake $0.00 

Decision Costs $0.00 

Successful File $0.00 

Key Business Partners On-Going $11,423,727

Subtotal $19,956,463

Grand Total $39,779,745

% of Total Award 13.44%
C-2

Award Amount $296,048,525
F-1

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.
F-2

(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 up to 100% 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.

IV. Methodology for Determining Recipient State’s Share of Annual Reallocation Amount
F-3

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.

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
F-4

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.