B-1-1

HHF Kentucky Date: October 1, 2018

SERVICE SCHEDULE B-1

KENTUCKY HOUSING CORPORATION

KENTUCKY UNEMPLOYMENT BRIDGE PROGRAM

Summary Guidelines

1. Program Overview The Kentucky Housing Corporation’s (KHC) Kentucky 

Unemployment Bridge Program (UBP) will provide funds to 

lenders and servicers on behalf of qualified homeowners who 

are delinquent on their mortgage payments or anticipate default 

due to a loss of income due to unemployment or a reduction in 

income due to substantial underemployment or a qualifying 

disability. Maximum assistance per household is set at $15,000.

There is a time limit of twelve (12) months for households to 

utilize the assistance – assistance ends at the earlier to occur of 

twelve (12) months from the loan closing or receipt of $15,000 

in assistance, so long as other conditions of eligibility are met 

and continue. Funds will be available on a first-come firstserved basis.

Borrowers will enter the UBP through the statewide 

Homeownership Protection Center operated by KHC. 

Applications will be processed by housing counseling agencies 

who will return the application to KHC for final underwriting, 

loan closing, disbursements and loan servicing. Borrowers will 

not be required to make any portion of the monthly payment. If 

a household qualifies for the UBP, program funds will be used 

for 100 percent of the monthly payment and reinstatement fees 

to include homeowner’s delinquent balance late fees, penalty 

interest, taxes, insurance, and protective advances.

2. Program Goals To prevent avoidable foreclosure for homeowners who have 

experienced loss of income due to unemployment or a reduction 

in income due to substantial underemployment or a qualifying 

disability by providing funds to reinstate, pay the household’s 

mortgage payments during the period of 

unemployment/underemployment/disability and for two (2) 

months after re-employment or substantially increased income, 

if needed, up to the maximum dollar threshold for assistance of

$15,000.
B-1-2

3. Target Population / 

Areas

The UBP will be available statewide. No specific population is 

targeted. During the first twelve (12) months of the UBP,

$10,000,000 will be set aside to serve rural counties.

4. Program Funds 

(Excluding 

Administrative 

Expenses)

Not applicable. Program Funds may be disbursed under any 

program included in Schedule B.

5. Borrower Eligibility 

Criteria

All borrowers must submit a hardship affidavit 

documenting inability to pay their mortgage.

Housing counselors and KHC will determine eligibility for the 

UBP. Eligible households must meet ALL of the following 

requirements:

 The homeowners must be legal U.S. residents.

 The financial hardship must be loss of employment 

income due to unemployment or a 15% reduction in 

income for the underemployed or qualified disabled 

homeowners.

• The homeowner’s cash reserves cannot exceed six (6) 

months, excluding retirement reserves. For purposes of 

the UBP, “cash reserves” is defined as non-retirement 

liquid assets sufficient to pay the household’s monthly 

payment of principal, interest, taxes and insurance (PITI) 

including both first and second lien home mortgage(s).

• The homeowner must be experiencing a financial 

hardship due to involuntary loss or reduction in 

homeowner’s income documented by an executed 

hardship affidavit.

 The homeowner must contact KHC or their counselor if 

there is a change in income or employment during the 

twelve (12) months of UBP participation.

6. Property / Loan 

Eligibility Criteria

Property/Loan Eligibility Requirements:

• Owner-occupied primary residence located in Kentucky.

• Existing single-family homes or condominiums(attached 

or detached) and manufactured or mobile homes on 

foundations permanently affixed to real estate owned by 

the borrower.
B-1-3

7. Program Exclusions A household is not eligible for the UBP if:

• Borrower’s total unpaid principal balances exceed

$275,000, including first and second mortgages 

combined.

• Borrower owns other residential or rental property

• Borrower’s hardship is a result of voluntary resignation 

of employment or voluntary reduction in hours or 

income.

• Borrower’s application is for a second home or 

investment properties.

• Borrower does not occupy the property as his/her 

primary residence.

The UBP will not fund job training costs.

8. Structure of Assistance All assistance will be structured as a 0% interest, nonamortizing, forgivable, nonrecourse loan, secured by a 

junior lien on the property, which will be forgiven 20 

percent each year over five (5) years.

The loan will only be repayable if the borrower sells the 

property before the period expires and there is sufficient equity 

to pay the loan.

9. Per Household 

Assistance

Estimated Average - $15,000 

Maximum Assistance - $15,000

10. Duration of Assistance Payment of assistance will end on the first to occur of: (1) 

twelve (12) months from assistance loan closing date, (2) two

(2) months after re-employment or substantially increased 

employment, (3) the expenditure of the maximum amount of 

assistance ($15,000) or (4) the household no longer complies 

with other required program provisions.

In the case of a new qualifying event of unemployment or 

underemployment or qualifying disability, the household may 

re-apply for assistance. Provided, however that new assistance 

will be made available only to the extent assistance is available, 

up to the maximum total assistance for the household and the 

maximum time period for assistance has not been exhausted.

11. Estimated Number of 

Participating 

Households

KHC is estimating that approximately 10,000 households will be 

served over the term of the UBP.
B-1-4

12. Program Inception / 

Duration

KHC implemented the UBP in two stages. This first phase of 

the UBP began January 3, 2011 to serve as a pilot period. Full 

implementation to all qualified borrowers statewide began April 

1, 2011. The program will expire December 31, 2020.

13. Program Interaction 

with Other Programs 

(e.g. other HFA 

programs)

The UBP will be leveraged with existing programs including the 

Homeownership Protection Center (HPC), the Homeownership 

Education and Counseling Program funded through HUD and 

KHC and the NeighborWorks Foreclosure Mitigation 

Counseling Program (NFMC). Homeowners who participate in 

the UBP will work with a KHC-approved counselor and utilize 

the Homeownership Protection Center website for their initial 

information.

14. Program Interactions 

with HAMP

KHC and housing counselors will analyze borrowers for their

eligibility for the Hardest Hit Unemployment Bridge Program as 

well as any other loss mitigation options that may be available to 

them. Where possible, HHF assistance will precede HAMP UP.

15. Program Leverage with 

Other Financial 

Resources

No investor match is required for this program.

This program will not be combined with other financial 

resources.
B-2-1

SERVICE SCHEDULE B-2

KENTUCKY HOUSING CORPORATION

HARDEST HIT FUND DOWN PAYMENT ASSISTANCE PROGRAM

Summary Guidelines

1. Program 

Overview

The Down Payment Assistance (“DAP”) Program will provide an 

incentive to qualified homebuyers to purchase a primary residence in 

targeted areas in Kentucky. 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 initially be offered as a pilot that 

includes four Kentucky counties.

2. Program Goals The goal of the DAP Program is to help homeowners avoid foreclosure 

by assisting in the stabilization of housing prices in targeted areas.

Kentucky will identify meaningful indicators that will enable them to 

track and quantify the DAP Program’s impact in the targeted areas.

3. Target 

Population/Areas

Targeted areas are those counties identified in Secondary Market 

Program Guide including: Jefferson, Kenton, Christian and Hardin 

(“Targeted Area”). For these four counties, Kentucky Housing 

evaluated five housing market distress indicators across all one-hundred 

and twenty Kentucky counties—seriously delinquent mortgage loans, 

negative equity, short sales, REO sales, and foreclosures—as well as 

loan origination volume. Targeted counties exceed the statewide rate in 

at least four out of the five distressed housing market indicators, and a 

minimum threshold origination volume was achieved in these counties 

in 2014.

4. Program Funds 

(Excluding 

Administrative 

Expenses)

Not applicable. Program Funds may be disbursed under any program 

included in Schedule B.

5. Borrower 

Eligibility Criteria

Eligible borrowers must qualify for and meet all requirements of a 

Kentucky Housing Corporation’s homebuyer loan program first 

mortgage loan originated through a participating lender. Allowable first 

mortgage loans are 30-year, fixed-rate loans from the Federal Housing 

Administration (FHA), Veterans Administration (VA), U.S. Department 

of Agriculture – Rural Development (RD) and Fannie Mae. Eligible 

borrowers must also meet the following criteria:
B-2-2

• Must meet income limits that do not exceed 175% of the Area 

Median Income (“AMI”), as specified in the Secondary Market 

Program Guide.

• Borrowers must be First-Time Homebuyers. For purposes of this 

program, a First-Time Homebuyer is someone who has not had an 

ownership interest in their primary residence in the past three years.

• All borrowers must complete pre-purchase home buyer education 

and counseling in the form of an online, telephone, or face-to-face 

workshop.

• Borrowers must be a legal U.S. citizen or lawful permanent resident 

or otherwise meet the applicable Agency (FHA, VA, USDA-RD) or 

GSE (Fannie Mae) requirements.

• Borrowers must be able to provide a Dodd-Frank affidavit as 

specified in the Secondary Market Program Guide.

• Borrowers must be credit-worthy and meet minimum FICO scores, 

and have a maximum debt-to-income (DTI) ratio no greater than 

45%, each as specified in the Secondary Market Program Guide.

6. Property/Loan 

Eligibility Criteria

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

townhome, a manufactured on foundation permanently affixed to 

real estate owned by the borrower.

• Must be the borrower’s primary residence.

• Property must be located in a Targeted Area.

• Property must meet Kentucky Housing Corporation’s Secondary 

Market Program guide. Maximum purchase price limit is $294,000.

• Meet all applicable Agency (FHA, VA, USDA-RD) or GSE (Fannie 

Mae & Freddie Mac) underwriting guidelines.

7. Program 

Exclusions

• Borrowers, properties and loans not meeting eligibility requirements 

as specified in the Secondary Program Guide or Agency/GSE 

underwriting criteria.

• Dodd-Frank exclusion for having been convicted of a mortgagerelated 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 in the form of a zeropercent (0%) interest, non-recourse, forgivable second mortgage loan 

with a five-year term. This loan will be evidenced by a note and 

mortgage in favor of Kentucky Housing Corporation. The second 

mortgage will be forgivable at the rate of 20% per year over the five 

year term of the loan. Kentucky Housing Corporation reserves the right
B-2-3

to resubordinate the second mortgage as further detailed in the Closing 

and Quality Review- Secondary Market Program Guide.

If the borrower sells the home during any part of the loan term, the 

remaining principal balance will be due to Kentucky Housing 

Corporation in the event there are sufficient equity proceeds from the 

sale. If there is not enough equity in the home to repay the entire 

amount due, Kentucky Housing Corporation will forgive the excess 

portion or all of the remaining principal balance. Any loans repaid will 

be recycled back into the Program and used to provide assistance to 

additional borrowers for the duration of the Program.

9. Per Household 

Assistance

$10,000

10. Duration of 

Assistance

DAP Program funds will be used to reimburse participating lenders who 

table fund the loan at closing, once it is determined that all DAP 

Program requirements have been met.

11. Estimated 

Number of 

Participating 

Households

It is anticipated that the DAP Program will assist approximately 4085 

households.

12. Program 

Inception/Duration

The DAP Program will begin in 2016 and it is projected that assistance 

will be expended through 2020.

13. Program 

Interactions with 

Other Programs 

(e.g. other HFA 

programs)

The DAP Program will take advantage of an existing infrastructure of 

participating lenders who are already actively originating both first 

mortgage and down payment assistance loans as part of Kentucky’s 

current homebuyer loan programs. If the borrower has received HHF 

assistance under any other HHF program, the maximum amount of all 

assistance may not exceed $45,000.

14. Program 

Interactions with 

HAMP

None.

15. Program 

Leverage with 

Other Financial 

Resources

Kentucky Housing Corporation programs often use Secondary Market 

as a source of funding for the accompanying first mortgage loans. In 

addition, funds may be leveraged by our lenders using additional 

subsidy programs such as Federal Home Loan Bank down payment 

assistance, Neighborhood Stabilization Program (NSP) Funds or 

HOME funds.
C-1

HHF Kentucky Date: October 1, 2018

SCHEDULE C

PERMITTED EXPENSES

Kentucky

One-time / Start-Up Expenses:

Initial Personnel $0

Building, Equipment, Technology $115,100

Professional Services $1,900

Supplies / Miscellaneous $1,500

Marketing /Communications $100,000

Travel $0

Website development /Translation $0

Contingency $0

Subtotal $218,500

Operating / Administrative Expenses:

Salaries $7,653,102

Professional Services (Legal, Compliance, Audit, 

Monitoring) $5,300,398

Travel $40,000

Buildings, Leases & Equipment $0.00

Information Technology & Communications $306,066

Office Supplies/Postage and Delivery/Subscriptions $130,000

Risk Management/ Insurance $0.00

Training $6,000

Marketing/PR $733,920

Miscellaneous $0.00

Subtotal $14,169,486

Transaction Related Expenses:

Recording Fees $168,481

Wire Transfer Fees $117,228

Counseling Expenses

File Intake $0.00

Decision Costs $0.00

Successful File $5,301,690

Key Business Partners On-Going $0.00
C-2

HHF Kentucky Date: October 1, 2018

Kentucky

Subtotal $5,587,399

Grand Total $19,975,385

% of Total Award 9.64%

Award Amount $207,192,837