HHF Arizona Date: January 31, 2018

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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 

principal reduction of a borrower’s primary mortgage to 

facilitate a permanent loan modification or recast that achieves 

an affordable monthly mortgage payment. This will be 

accomplished exclusively through principal reduction, combined

with either (i) an interest rate reduction and/or term extension to 

achieve a permanent modification, or (ii) a reamortization of the 

remaining unpaid principal balance (“recast”) to achieve a lower 

monthly payment (“Modification or Reamortization PRA”).

The following types of assistance will be allowable for 

applications submitted on or before April 6, 2017: (a) 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”); (b) 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 (c) principal reduction of 

primary mortgages in significant negative equity positions for 

“non-delinquent” borrowers to an amount as close to 100% loanto-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) for applications 

submitted on or before April 6, 2017, reduces a borrower’s 

negative equity position to an amount as close to 100% LTV 
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ratio as the amount of per-household assistance will permit. 

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)

$96,833,784

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 combined with either (i) an interest rate 

reduction and/or term extension to achieve a permanent 

modification, or (ii) a reamortization of the remaining 

unpaid principal balance (“recast”) to achieve a lower 

monthly payment: 

• Eligible financial hardships: A monthly mortgage 

payment that exceeds 31% of the borrower’s gross 

monthly income, and a reduction in income due to 

such hardships as underemployment, medical 

condition, divorce or death, as set forth in the 

program guidelines. 
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• 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 

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 
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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 

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..

• 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 
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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 

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.
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• Any proceeds that are returned to the component will be 

reutilized to assist additional homeowners in accordance with 

the Agreement.

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”). 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 In order to leverage the funds, ADOH will attempt to have the 
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with Other 

Financial Resources

lender/servicer match any principal reduction provided through 

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)

$12,803,697

5. Borrower Eligibility 

Criteria

• Eligible financial hardships include (a) a monthly mortgage 

payment that exceeds 31% of the borrower’s gross monthly 

income, and a reduction in income due to under employment, 

medical condition, divorce or death as set forth in the 

program guidelines; or (b) “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.

• For applications received on or after April 6, 2017, the 

reduction or elimination of a second mortgage may only be 

provided to the extent necessary to achieve an affordable 

monthly mortgage payment for homeowners who have an 
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eligible financial hardship described in (a) above.

• Property must be borrower’s primary residence.

• Income less than 150% of AMI.

• Requests for Mortgage Assistance with hardship and Dodd 

Frank Certification.

• For applications received on or before April 6, 2017: 

Affordability for Home Affordable Refinance Program

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

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 
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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.

• 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)

For short sale commitments in existence as of April 6, 2017, 

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.
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14. Program 

Interactions with 

HAMP

ADOH’s program may interact with aspects of the Making 

Home Affordable Program (“MHA”). 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 

resume payment or the available 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 

Population/Area

The target population includes eligible homeowners whose 

hardship is caused by unemployment or underemployment.
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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 (face-to-face when 

possible) continued eligibility validations according to 

program guidelines.

• 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 

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 
B-3-3

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 

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.
B-3-4

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 for Borrowers applying for assistance 

prior to September 15, 2016, and for up to a maximum 

of twelve (12) months for applications submitted 

thereafter, including previously rejected applications 

that have been resubmitted to the program. 

• 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, regardless of the term length of 

monthly mortgage payment assistance approved for the 

Borrower.

• 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 for participants applying for assistance prior 

to September 15, 2016, and for up to a maximum of 

twelve (12) months for applications submitted 

thereafter, including previously rejected applications 

that have been resubmitted to the program.

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

post re-employment, provided the maximum term 

and/or amount 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, if such 

assistance has been approved by the Program prior to 

September 15, 2016. 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 It is anticipated that the Unemployment/Underemployment 
B-3-5

Participating 

Households

Mortgage Assistance Component will assist a minimum of 

4,211 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”). 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

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 

Population/Area

The targeted populations are households whose income does 

not exceed 150% of Area Median Income (“AMI”).
B-4-2

4. Program Allocation 

(Excluding 

Administrative 

Expenses)

$1,011,877

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.

When provided to facilitate a short sale with a lease purchase 
B-4-3

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”). 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

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)

$71,465,923
B-5-2

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) income not to exceed 150% of the Area

Median Income as determined by HUD for a four (4) 

person household, adjusted to a statewide average. 

• 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

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

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

Housing Finance Authority, Arizona Industrial Development 

Authority, the Arizona Department of Housing, or a local 

Industrial Development Authority who pre-funds 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. 
HHF Arizona Date: January 31, 2018

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 13.43%

Award Amount $296,146,720