HHF Michigan Date: October 1, 2018

B-1-1

SERVICE SCHEDULE B-1

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY

PRINCIPAL CURTAILMENT PROGRAM (PC) 

Summary Guidelines

1. Program Overview The Principal Curtailment Program will provide a onetime matching fund of up to $10,000 to homeowners seeking 

to modify their loans. The Lender/Servicer must agree to 

provide matching forgiveness of principal and to modify

the reduced loan balance.

2. Program Goals The Principal Curtailment will prevent avoidable foreclosures 

by helping homeowners who have a qualifying, involuntary 

hardship (for example, homeowners who currently cannot 

refinance or modify their mortgages due to negative equity 

positions). Homeowners will benefit from both a restructured 

loan payment and the reduction in principal balance, reducing 

monthly payments and increasing sustainability.

3. Target

Population/Areas

MHA does not anticipate targeting this assistance on a

geographic basis, nor have we anticipated targeting specific 

income limits.

4. Program Funds

(Excluding 

Administrative 

Expenses)

Not applicable. Program Funds may be disbursed under any 

program included in Schedule B.

5. Borrower Eligibility

Criteria

MHA determines homeowner eligibility. Homeowners

presently having negative equity, greater than 100% Loan to 

Value (LTV) or greater than 100% Combined Loan to Value 

(CLTV), and needing principal curtailment in order to reach a 

sustainable mortgage payment. Homeowners are required to 

provide a hardship affidavit; it must be the occupying 

Homeowner who has the qualifying, involuntary hardship. If 

providing assistance on a 2nd lien, first lien must be

documented as current. MHA considers a sustainable

mortgage payment 45% or less (gross household income to 

validated mortgage payment).

6. Property/Loan

Eligibility Criteria

The homeowner must currently occupy the property as 

his/her primary residence and it must be located within the

state of Michigan. Homeowners must execute all Hardest Hit 

Funds application and closing documents. Eligible structures 

to include single-family, attached or detached, or

manufactured homes on a permanent foundation attached to 

real property; 1- 4 unit properties are eligible if one unit is 
B-1-2

primary residence of homeowner. Existing mortgage loan 

balance must be equal to or less than $729,250.

7. Program Exclusions Second homes or investment properties. Homeowners with

Liquid- cash reserves exceeding 6 months validated mortgage 

payments. Lender/Servicer is not required to accept 

homeowner to the program if a notice of trustee/sheriff sale 

has been recorded or the trustee/sheriff sale is scheduled less 

than seven days from date the Lender/Servicer is notified of 

borrower eligibility.

8. Structure of

Assistance

Homeowners receiving assistance will execute a secured

Subordinate lien mortgage and note in favor of the MHA. 

Loan will be 0%, non-amortizing loan, forgivable over a 5-

year term at 20% per year, which will be due on sale, transfer 

of the property, or when the property ceases to be the

principal residence of the homeowner. If the primary lien is

paid in full due to a no cash out, limited-term, refinance, the

MHA may subordinate lien position in accordance with

program guidelines. Mortgage will be recorded through 

public records and ongoing monitoring, repayments, 

discharges, and subordinations will be conducted by MHA. 

Any repayment of program funds will be re-invested back 

into program allocation. All funds remaining in the program 

will be returned to Treasury in accordance with the 

Agreement. Hardest Hit Funds will be available on a first 

come, first serve basis.

The Lender/Servicer will determine terms of modification 

according to their internal guidelines. The Lender/Servicer 

will transmit modification terms to the MHA for review and 

agree to match MHA’s assistance dollar for dollar towards 

principal curtailment. Awarded funds will be remitted to 

Lender/Servicer to be applied towards the capitalized balance 

resulting in a reduction in existing principal on either the 1st

or 2nd Mortgage.

Lender/Servicer is required to provide timely communication 

of homeowner’s loan data to the MHA and agree to place 

collection and foreclosure activity on hold upon their 

acceptance of the homeowner into the Hardest Hit Funds 

Program; active foreclosure action to be canceled upon 

receipt of Hardest Hit Funds. Lender/Servicer is required to 

provide evidence of timely application of Hardest Hit Funds

inclusive of their required minimum 1:1 match. 

Lender/Servicer is required to waive all accumulated late 

charges and non- sufficient funds (NSF) fees.
B-1-3

9. Per Household

Assistance

Maximum of $10,000 per household with a minimum 1:1

match from the Lender/Servicer; total of $20,000 per 

household.

10. Duration of Assistance One-time assistance to homeowner paid directly to

Lender/Servicer for application towards capitalized balance.

11. Estimated Number of

Participating

Households

300 households could be served under this program if they all

receive the maximum funding amount of $10,000.

12. Program Inception/

Duration

Program rolled out July 12, 2010. Based on the

overwhelming need, funds allocated to this Program will 

likely be exhausted 3rd quarter 2014.

13. Program Interactions

with Other HFA 

Programs

Homeowners will only be eligible for one MHA Hardest Hit

Funds Program. MSHDA owned and serviced loans are 

eligible for this program.

14. Program Interactions

with HAMP

Homeowners can receive HAMP assistance (including UP

program assistance) prior to or after receiving Hardest Hit 

Funds assistance; Hardest Hit Funds cannot be used to pay 

HAMP trial period payments. Lender/Servicers to follow

current guidance issued by their investor and/or U.S. Treasury.

15. Program Leverage

with Other Financial

Resources

Existing Lender/Servicer will be required to match Hardest

Hit Funds at a minimum of 1:1 towards capitalized debt. 

Lender/Servicer agrees to waive all accumulated late fees and 

NSF fees upon receipt of Hardest Hit Funds.
B-2-1

SERVICE SCHEDULE B-2

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY

LOAN RESCUE PROGRAM (LR)

Summary Guidelines

1. Program Overview Whether it was a divorce, a serious illness, or a recent period

unemployment, many Michigan families have encountered 

some significant obstacle in their lives that resulted in 

delinquent mortgage, property tax, or condominium 

association fees that could result in property foreclosure.

This program will provide up to $30,000 in assistance to 

households who had a qualifying, involuntary hardship and

can sustain homeownership, but need assistance to catch up 

on delinquent payments, escrow shortage, delinquent 

property taxes, and/or delinquent condominium association 

fees to avoid foreclosure. (Condominium assessed fees as 

described in Act 59, MCL 559.101, et seq., as amended). 

2. Program Goals This program will prevent avoidable foreclosures by helping 

homeowners get back on solid footing. In so doing, the

program will stem the oversupply of foreclosed homes and

short sales that dominate many markets and help stabilize the 

broader housing market in Michigan.

3. Target

Population/Areas

Michigan homeowners currently delinquent on mortgage 

payments including property taxes and/or condominium 

association fees. 

4. Program Funds

(Excluding 

Administrative 

Expenses)

Not applicable. Program Funds may be disbursed under any 

program included in Schedule B.

5. Borrower Eligibility

Criteria

MHA determines homeowner eligibility. Homeowners who

had a qualifying, involuntary hardship (for example, job 

loss, decreased income or a catastrophic event). 

Homeowners are required to provide a hardship affidavit; it 

must be the occupying Homeowner who has the qualifying, 

involuntary hardship. If providing assistance on a second

lien, first lien must be documented as current. MHA 

considers a sustainable mortgage payment 45% or less 

(gross household income to validated mortgage payment). If 

the property is free and clear of mortgage liens, sustainable 

housing ratio will be calculated on monthly payment of 

annual tax and condominium association fees; must be 45% 

or less. 
B-2-2

6. Property/Loan

Eligibility Criteria

The homeowner must currently occupy the property as

their primary residence and it must be located within the state

of Michigan. Homeowners must execute all Hardest Hit 

Funds application and closing documents. Eligible structures 

to include single-family, attached or detached, or 

manufactured homes on a permanent foundation attached to 

real property; 1-4 unit properties are eligible if one unit is 

primary residence of homeowner. Existing mortgage loan 

balance must be equal to or less than $729,250.

7. Program Exclusions Second homes or investment properties. Properties already 

foreclosed; after the sheriff sale date or after the foreclosure 

judgment becomes final (property taxes or condominium 

association fees.) Homeowners with liquid cash reserves 

exceeding $10,000. 

8. Structure of Assistance Homeowners receiving assistance must be able to execute a

secured subordinate lien mortgage and note in favor of the

Eligible Entity. Loan will be 0%, non-amortizing loan, 

forgivable over a 5-year term at 20% per year, which will be

due on sale, transfer of the property, or when the property

ceases to be the principal residence of the homeowner. If the 

primary lien is paid in full due to a refinance transaction, the 

MHA may subordinate lien position in accordance with 

program guidelines. Mortgage will be recorded through public

records; repayments, discharges, and subordinations will be 

conducted by MHA. Any lien recoveries will be recycled into 

Michigan’s Hardest Hit Funds for future allocation. All funds 

remaining in the program will be returned to Treasury in 

accordance with the Agreement. Hardest Hit Funds will be

available on a first come, first serve basis.

If assistance is paid directly to tax authority or condominium 

association, homeowner will execute an additional, 

simultaneous Demand Note in the amount of delinquent taxes 

and/or delinquent condominium association fees.

Lender/Servicer and/or eligible third party (property tax 

authority or condominium association) is required to provide

timely communication of homeowner’s loan data to the MHA

and agree to place collection and foreclosure activity on hold 

upon their acceptance of the homeowner into the Hardest Hit 

Funds Program; active foreclosure action to be canceled upon 

receipt of Hardest Hit Funds. Lender/Servicer and/or eligible 

third party (property tax authority or condominium 

association) is required to provide evidence of timely 

application of Hardest Hit Funds. Lender/Servicer is required 
B-2-3

to waive all accumulated late charges and non-sufficient 

funds (NSF) fees.

9. Per Household

Assistance

One-time award up to $30,000 per household.

10. Duration of Assistance One-time assistance to homeowner, paid directly to

Lender/Servicer and/or eligible third party, for application 

towards homeowner’s total, accrued delinquent mortgage

payments, escrow shortages, corporate advances, excluding

late charges and NSF fees, delinquent property taxes and/or 

delinquent condominium association fees on homeowners’

account. 

11. Estimated Number 

of Participating Households

Based upon maximum program funding of $30,000 per 

household, 6,854 households may be assisted.

12. Program Inception /

Duration

Based on the overwhelming need, funds allocated to this

Program will likely be exhausted prior to December 31, 2020.

13. Program Interactions

with Other HFA 

Programs

Homeowners will only be eligible for one MHA Hardest Hit

Funds Program. MSHDA owned and serviced loans are 

eligible for this program. Homeowners are eligible for 

simultaneous disbursements to multiple, eligible 

entities/participating partners in this Program. 

14. Program Interactions 

with HAMP

Homeowners can receive HAMP assistance prior to or 

after receiving Hardest Hit Funds assistance; Hardest Hit 

Funds cannot be used to pay HAMP trial period 

payments. Lender/Servicers to follow current guidance

issued by their investor and/or U.S. Treasury.

15. Program Leverage with

Other Financial

Resources

Lender/Servicer agrees to waive all accumulated late fees and

NSF fees. No further matching is required.
B-3-1

SERVICE SCHEDULE B-3

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY

UNEMPLOYMENT MORTGAGE SUBSIDY PROGRAM (UMS)

Summary Guidelines

1. Program Overview Michigan, through its Unemployment Mortgage Subsidy

Program, may directly provide funds to the Lender/Servicer 

to subsidize an eligible homeowner’s current or modified 

monthly mortgage payment and/or reinstate an existing 

mortgage, property tax or condominium association fees 

delinquency.

This Program assists the homeowner who has had a qualifying,

unemployment or underemployment-related hardship in 

retaining homeownership by subsidizing up to 50% or $1,000 

(whichever is less) of the monthly mortgage payment. The 

monthly subsidy will not exceed a total of 12 consecutive 

months or $12,000. Homeowners will be responsible for the 

unsubsidized portion of their first mortgage lien’s monthly

payment, which will be collected by MHA’s special subservicer and sent to MHA; MHA will always remit the full

mortgage payment directly to the Lender/Servicer. 

Homeowners will also be eligible for upfront assistance to 

contribute towards a mortgage delinquency; inclusive of 

current mortgage payment due, delinquent mortgage 

payments, escrow shortages, corporate advances, excluding 

accrued late charges and non-sufficient funds (NSF) fees, on 

homeowners’ mortgage account. Unemployed or 

underemployed homeowners that do not have a first 

mortgage lien or the first mortgage lien is documented as 

current and is not with a participating lender/servicer may 

be eligible for one-time reinstatement of delinquent property 

taxes and/or condominium association dues only. Maximum

reinstatement amount cannot exceed the maximum program 

reservation of $30,000 less the total amount initially reserved 

for 12 monthly subsidy amounts.

2. Program Goals Provide monthly mortgage payment assistance and delinquent 

mortgage, property tax, or condominium association fees 

reinstatement to unemployed or underemployed residents

helping them remain successful in homeownership by 

preventing avoidable foreclosures. In so doing, the program will 

stem the oversupply of foreclosed homes that dominate many 

markets and help stabilize the broader housing market in 

Michigan.
B-3-2

3. Target Population /

Areas

Unemployed and underemployed Michigan homeowners who 

need help paying their monthly mortgage payment and/or are 

currently delinquent on mortgage payments, property taxes and 

/or condominium fees. 

4. Program Funds

(Excluding 

Administrative

 Expenses)

Not applicable. Program Funds may be disbursed under any 

program included in Schedule B.

5. Borrower Eligibility

Criteria

MHA determines homeowner eligibility. Homeowners who

have lost their job and have received Michigan unemployment 

benefits (UIA) within the last 12 months of application date 

(not registration date) or homeowners who are underemployed 

and are able to document a 20% reduction in gross income. 

Homeowners are required to provide a hardship affidavit; it 

must be the occupying Homeowner who has the qualifying, 

involuntary hardship. Qualifying ratio of 45% or less (gross 

household income, including unemployment compensation, to 

borrower’s required portion of the validated mortgage

payment). If the property is free and clear of mortgage liens, 

sustainable housing ratio will be calculated on monthly 

payments of annual tax and/or condominium association fees; 

must be 45% or less.

6. Property / Loan

Eligibility Criteria

The homeowner must currently occupy the property as their 

primary residence and it must be located within the state of 

Michigan. Homeowners must execute all Hardest Hit Funds 

application and closing documents. Eligible structures to 

include single-family, attached or detached, or manufactured 

homes on a permanent foundation attached to real property;

1-4 unit properties are eligible if one unit is primary residence 

of homeowner. Existing mortgage loan balance must be

equal to or less than $729,250.

7. Program Exclusions Homeowners unable to document an eligible unemployment 

or underemployment hardship. Second homes or investment 

properties. Properties already foreclosed; after the sheriff sale or 

after the foreclosure judgment becomes final (property taxes or 

condominium association fees.) Homeowners with liquid cash 

reserves exceeding $10,000.

Assistance may not be provided on a loan in a 2nd lien position.

8. Structure of Assistance Homeowners receiving assistance must be able to execute a

secured subordinate lien mortgage and note in favor of the

MHA. Loan will be 0%, non-amortizing loan, forgivable over a
B-3-3

9. Per Household

Assistance

$ 30,000 maximum per household.

10. Duration of Assistance After one-time reinstatement assistance to mortgage 

lender/servicer, tax authority and/or condominium association, 

the monthly subsidy ceases after 12 months consecutive 

monthly payments OR if homeowner fails to pay their portion 

of the payment in accordance with terms of the Note.

11. Estimated Number of

Participating

Households

Based upon maximum program funding of $30,000 per

household, a minimum of 2,728 households may be assisted.

12. Program Inception /

Duration

Based on the overwhelming need, funds allocated to this

program will likely be exhausted prior to December 31, 2017.

13. Program Interactions

with Other HFA 

Programs

Homeowners will only be eligible for one MHA Hardest Hit

Funds Program. MSHDA owned and serviced loans are 

eligible for this program.

14. Program Interactions 

with HAMP

Homeowners can receive HAMP assistance prior to or 

after receiving Hardest Hit Funds assistance; Hardest Hit 

Funds cannot be used to pay HAMP trial period 

payments. Lender/Servicers to follow current guidance

issued by their investor and/or U.S. Treasury.

5-year term at 20% per year, which will be due on sale, transfer 

of the property, or when the property ceases to be the principal 

residence of the homeowner. If the primary lien is paid in full 

due to a refinance transaction, the MHA may subordinate lien 

position in accordance with in program guidelines. Mortgage

will be recorded through public records; repayments, 

discharges, and subordinations will be conducted by MHA. 

Any lien recoveries will be recycled into Michigan’s Hardest 

Hit Funds for future allocation. All funds remaining in the

program will be returned to Treasury in accordance with the 

Agreement. Hardest Hit funds will be available on a first come,

first serve basis.

Lender/Servicer is required to provide timely communication 

of homeowner’s loan data to the MHA and agree to place 

collection and foreclosure activity on hold upon their 

acceptance of the homeowner into the Hardest Hit Funds

Program; active foreclosure action to be canceled upon receipt 

of Hardest Hit Funds. Lender/Servicer is required to provide 

evidence of timely application of Hardest Hit Funds. 

Lender/Servicer is required to waive all accumulated late 

charges and NSF fees.
B-3-4

15. Program Leverage

with Other Financial

Resources

Lender/Servicer agrees to waive all accumulated late fees and

NSF fees. No further matching is required.
B-4-1

SERVICE SCHEDULE B-4

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY

MODIFICATION PLAN PROGRAM (MP)

Summary Guidelines

1. Program Overview Michigan’s Modification Plan Program provides a permanent

solution to many homeowners who have a qualifying,

involuntary hardship and an unsustainable monthly mortgage 

payment and/or to borrowers with severe negative equity. Up to 

$30,000 in assistance may be provided to the Lender/Servicer to 

pay the capitalized balance or negative equity in order to 

contribute towards reaching a lower monthly payment. Reamortization only or Recast Modifications are eligible. 

2. Program Goals This program will prevent avoidable foreclosures by putting

homeowners who may be at a higher risk of foreclosure into a

permanent, affordable loan modification allowing them to 

maintain homeownership, curb vacancies and stabilize local 

communities.

3. Target

Population/Areas

Homeowners with negative equity greater than 115% Loan 

to Value (LTV) and homeowners who do not have a 

sustainable mortgage payment. 

4. Program Funds

(Excluding 

Administrative 

Expenses)

Not applicable. Program Funds may be disbursed under any 

program included in Schedule B.

5. Borrower Eligibility

Criteria

MHA determines homeowner eligibility. Homeowners who have

a qualifying, involuntary hardship and a present housing 

payment greater than 45% and/or have severe negative equity 

greater than 115% LTV. MHA considers a sustainable 

mortgage payment as 45% or less (gross household income to 

validated mortgage payment.) Homeowners are required to 

provide a hardship affidavit; it must be the occupying 

Homeowner who has the qualifying, involuntary hardship.

6. Property/Loan

Eligibility Criteria

The homeowner must currently occupy the property as their 

primary residence and it must be located within the state of 

Michigan. Homeowners must execute all Hardest Hit Funds 

application and closing documents. Eligible structures to include 

single-family, attached or detached, or manufactured homes on a 

permanent foundation attached to real property; 1-4 unit properties 

are eligible if one unit is primary residence of homeowner. 

Existing mortgage loan balance must be equal to or less than 

$729,250.
B-4-2

7. Program Exclusions Homeowners whose Lender/Servicer is unable to permanently

modify or recast their existing lien. Assistance may not be 

provided on a loan in a 2nd lien position. Second homes or 

investment properties. Properties already foreclosed; after the 

sheriff sale date or after the foreclosure judgment becomes final 

(property taxes or condominium association fees.) Homeowners

with liquid cash reserves exceeding $10,000.

8. Structure of

Assistance

Homeowners receiving assistance will execute a secured

subordinate lien mortgage and note in favor of the MHA. Loan 

will be 0%, non-amortizing loan, forgivable over a 5-year term at

20% per year, which will be due on sale, transfer of the property, 

or when the property ceases to be the principal residence of the 

homeowner. If the primary lien is paid in full due to a refinance 

transaction the MHA may be willing to subordinate lien position. 

Mortgage will be recorded through public records; repayments, 

discharges, and subordinations will be conducted by MHA. Any 

lien recoveries will be recycled into Michigan’s Hardest Hit 

Funds for future allocation. All funds remaining in the program 

will be returned to Treasury in accordance with the Agreement.

Hardest Hit Funds will be available on a first come, first serve

basis.

MHA will determine amount of assistance up to program 

maximum based on delinquency amount and/or if the loan is 

current, based on amount required to improve negative equity 

position. MHA equity calculation will not reduce principal loan 

balance below 100% LTV. Awarded funds will be remitted to

Lender/Servicer to be applied towards the capitalized balance. 

The Lender/Servicer will determine term of the modification 

according to their internal guidelines and transmit modification 

terms to the MHA. MHA will confirm final LTV is not less 

than 100% and reduced modified mortgage payment is 

sustainable i.e. 45% or less (gross household income to 

validated mortgage payment). 

Lender/Servicer is required to provide timely communication of 

homeowner’s loan data to the MHA and agree to place collection 

and foreclosure activity on hold upon their acceptance of the 

homeowner into the Hardest Hit Funds Program; active 

foreclosure action to be canceled upon receipt of Hardest Hit 

Funds. Lender/Servicer is required to provide evidence of timely 

application of Hardest Hit Funds. Lender/Servicer is required to 

waive all accumulated late charges and non-sufficient funds 

(NSF) fees.

9. Per Household One-time award up to $30,000 per household.
B-4-3

Assistance

10. Duration of

Assistance

One-time assistance to homeowner, paid directly to

Lender/Servicer, for application towards capitalized balance 

and/or negative equity, excluding late fees and NSF fees, on 

homeowners’ mortgage account.

11. Estimated Number

of Participating

Households

Based upon maximum program funding of $30,000 per

household, a minimum of 294 households may be assisted.

12. Program Inception/

Duration

Program rolled out July 2012. Based on the overwhelming need,

funds allocated to this Program will likely be exhausted prior to 

December 31, 2017.

13. Program

Interactions with 

Other HFA 

Programs

Homeowners will only be eligible for one MHA Hardest Hit

Funds Program. MSHDA owned and serviced loans are eligible 

for this program. 

14. Program 

Interactions with 

HAMP

Homeowners can receive HAMP assistance prior to or after

receiving Hardest Hit Funds assistance; Hardest Hit Funds cannot 

be used to pay HAMP trial period payments. Lender/Servicers to 

follow current guidance issued by their investor and/or U.S. 

Treasury.

15. Program Leverage

with Other Financial

Resources

Lender/Servicer agrees to waive all accumulated late fees and

NSF fees. No further matching is required.
B-5-1

SERVICE SCHEDULE B-5

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY

BLIGHT ELIMINATION PROGRAM (BE) 

Summary Guidelines

1. Program Overview Strategically target residential and multifamily demolition in 

designated areas within the state of Michigan, by partnering with 

land banks, non-profit and/or for- profit organizations (together, 

“Partners”). 

2. Program Goals The Blight Elimination Program (BE) primary purpose and goal 

is to focus efforts on decreasing foreclosures and stabilizing 

neighborhoods through the demolition and greening of vacant 

and abandoned single family and multi family structures in 

designated areas across Michigan. MHA will work with program 

Partners to identify meaningful indicators that will enable them 

to track and quantify the Blight Elimination Program’s impact in 

the designated communities.

3. Target

Population/Areas

Demolition funds will be focused in the cities of Detroit, Flint, 

Grand Rapids, Pontiac, Saginaw, Ecorse, Highland Park, River 

Rouge, Ironwood, Muskegon Heights, Inkster, Jackson, 

Hamtramck, Port Huron, Adrian and Lansing. Additional cities 

will be selected through an application process pursuant to a

Notice for Funds Availability (NOFA), and upon approval of the 

applicant’s strategic plan and execution of agreements. Please 

refer to program guides for additional information. MHA may 

authorize demolition to immediately adjacent neighborhoods to 

the designated cities if there is consensus among the applicable 

Partners that activity will promote increased values of remaining 

property and promote a positive economic impact. 

4. Program Funds

(Excluding 

Administrative 

Expenses)

Not applicable. Program Funds may be disbursed under any 

program included in Schedule B.

5. Property Eligibility

Criteria

MHA determines property eligibility. Property will be 

considered blighted if it meets any of the following criteria as 

determined by the local governing body in their strategic plan 

and pursuant to program guidelines.

• Considered a public nuisance according to local code or 

ordinance.

• Is a nuisance due to age, physical condition or use.

• Has had utilities, plumbing, heating or sewage disconnected, 

destroyed, removed or rendered ineffective so that property is 
B-5-2

unfit for the intended use.

For any requests submitted on or after January 15, 2016, 

properties must not be legally occupied at the time of any review 

or approval by the HFA or eligible entity (as applicable) for blight 

elimination activity.

6. Ownership/Loan

Eligibility Criteria

• Eligibility for residential (1-4 units) and multi-family (4+ 

units) demolition will be determined by MHA internal 

committee, ensuring funds will be appropriately spent, 

providing the greatest good for the city and neighborhood as 

defined in the program guidelines.

• MHA to issue note and mortgage not to exceed $25,000 per 

structure for actual costs incurred to acquire (if applicable), 

demolish, green, manage, and maintain property for a period 

to run concurrently with the term of the lien.

7. Program Exclusions • Commercial structures

• Properties listed on a national, state, or local historic register 

that do not receive approval from State Historic Preservation 

office and local Historical Chapters. 

8. Structure of

Assistance

MHA/MSHDA will determine project sites in direct consultation 

with Partners.

Partners will be responsible for property acquisition (if 

applicable), demolition work and on-going property 

maintenance.

Partners will submit to MHA/MSHDA the following for each 

demolition candidate:

• Property ownership and/or acquisition information including 

location, deed, title insurance or equivalent.

• Pre-demolition inspection with photos and post demolition 

inspection with photos. Third party environmental inspection 

(including asbestos information, if applicable), report 

providing proof of completion of demolition. 

• Any other miscellaneous information identified on property 

to include hazards, adverse findings, etc.

Upon receipt of the above documentation, MHA will provide 

Hardest Hit funding to Partner after Partner’s execution of a 

mortgage and note for a maximum of $25,000 in favor of MHA. 

Total assistance will provide for payoff of any existing lien (if 

applicable), demolition costs, a $500 one-time project 

management fee, and $750 maintenance fee to cover 

maintenance of property for a period to run concurrently with the 

term of the lien.

Loan will be 0%, non-amortizing loan, forgivable over a 5-year 

term at 20% per year, as long as covenants are met; outstanding 

balance of loan will be due on sale, transfer, or unauthorized use 
B-5-3

of the property, to the extent of net proceeds received. Mortgage

will be recorded through public records and ongoing monitoring,

repayments, and discharges will be conducted by MHA. Any

repayment of program funds will be re-invested back into 

program allocation. All funds remaining in the program will be 

returned to Treasury in accordance with the Agreement. Special 

considerations may be made by MHA to release lien prior to 5-

year term based on merit of request and to promote positive 

economic impact to community as set forth in program 

guidelines.

9. Per Property 

Assistance

Maximum of $25,000 per structure which includes payoff of 

existing lien (if applicable); demolition costs, a one-time project 

management fee, and maintenance fee.

10. Frequency of

Assistance

One-time assistance per property. 

11. Estimated Number of

Properties demolished

15,247 properties could be served under this program if they all

receive the maximum funding amount of $25,000. Further 

economies of scale savings will be investigated to drive costs 

down throughout all communities served for the BE program. 

This will in essence increase the total number of properties served 

to be greater than15,247

12. Program Inception/

Duration

Expansion of Program to roll out late November,2014. Based on 

the overwhelming need, funds allocated to this Program will 

likely be exhausted prior to December 31, 2020.

13. Program Interactions

 with Other

 HFA Programs

Property will only be eligible for one MHA Hardest Hit

Funds Program. MSHDA owned properties may be eligible for 

this program.
B-6-1

SERVICE SCHEDULE B-6

MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY

STEP FORWARD 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 that have been hardest hit by serious 

delinquency, foreclosures, negative equity and distressed sales. 

The increased sales activity in these distressed areas will help 

advance Michigan’s recovery efforts by increasing property 

values, stabilizing housing markets and preventing future 

foreclosures.

2. Program Goals The goal of the DPA program is to stabilize housing markets

and prevent foreclosure in targeted areas that are still 

struggling with high rates of vacancies, foreclosures and 

stagnant property values. Michigan will identify meaningful 

indicators to track and quantify the DPA program’s impact in 

the targeted areas.

3. Target Population/Areas The DPA program will be available in the following 61 zip 

codes (the Targeted Areas), located in 10 counties:

Bay County (48706, 48708); Genesee County (48457, 48458, 

48503, 48504, 48506, 48507, 48509, 48519, 48529, 48532); 

Ingham County (48906, 48910, 48911, 48912, 48915); 

Jackson County (49202, 49203, 49254); Macomb County

(48015, 48021, 48048, 48066, 48089, 48091); Muskegon 

County (49442); Oakland County (48030, 48033, 48075, 

48340, 48341, 48342); Saginaw County (48602, 48604); 

Washtenaw County (48160, 48198); and Wayne County

(48111, 48122, 48125, 48135, 48141, 48146, 48174, 48180, 

48184, 48192, 48195, 48205, 48214, 48215, 48219, 48221, 

48223, 48224, 48225, 48227, 48228, 48235, 48239, 48240).

In selecting the Targeted Areas, Michigan evaluated five 

indicators of housing distress—90+ day delinquencies, 

completed foreclosures, negative equity, real estate owned 

(REO) sales, and short sales—as well as loan origination 

volume. Each of the Targeted Areas exceeded the statewide 

average in at least four of the five distressed housing market 

indicators, and were located in counties that achieved a 

minimum threshold origination volume.
B-6-2

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 a Michigan State Housing 

Development Authority (MSHDA) first lien mortgage loan,

originated through a MSHDA-approved lender, and meet the 

lender’s conventional, Federal Housing Administration 

(FHA), Veteran’s Administration (VA), or Rural Development 

(RD) program guidelines. Eligible borrowers must also meet 

the following criteria

• MSHDA income and sales price limits by geographic area, 

as set forth in program guidelines;

• Execution of a Dodd-Frank Certification attesting to no 

mortgage- or real estate-related felonies within the past 10 

years; and

• Completion of a Step Forward Homebuyer Education 

course from a MSHDA- or HUD-approved agency.

6. Property/Loan

 Eligibility Criteria

The property must be an existing, single-family home, 

condominium unit (attached or detached), or manufactured 

home on a foundation permanently affixed to real estate. In 

addition, the property must:

• Be the borrower’s primary residence;

• Be located in a Targeted Area; and

• Meet all applicable insurer’s or guarantor’s program 

guidelines.

7. Program Exclusions • Second homes or investment properties; 

• Borrowers who previously received assistance from other 

Michigan HHF programs; and

• Borrowers not able to meet the Dodd-Frank requirements.

8. Structure of Assistance DPA assistance will be structured as a subordinate lien 

mortgage and note in favor of MHA. Loan will be 0%

interest, non-amortizing loan, forgivable over a 5- year term at 

20% per year, and due on sale, transfer of the property, or 

when the property ceases to be the principal residence of the

homeowner. If the primary lien is paid in full due to a no 

cash-out refinance transaction, MHA may subordinate its lien 

position in accordance with program guidelines. Mortgage will 

be recorded through public records and ongoing monitoring,
B-6-3

repayments, discharges, and subordinations will be conducted 

by MHA. Any lien recoveries will be recycled into 

Michigan’s Hardest Hit Funds for future allocation. All funds 

remaining in the program will be returned to Treasury in 

accordance with the Agreement. Hardest Hit Funds will be

available on a first come, first serve basis.

9. Per Household

 Assistance

$15,000 per household

10. Duration of Assistance DPA program funds will be used to reimburse the originating,

MSHDA-approved lender, who table funds the loan at closing 

once it is determined that all DPA program requirements have 

been met.

11. Estimated Number of

Participating

 Households

Up to 1,333 households could be served under the DPA

program, based on assistance of $15,000 per household.

12. Program Inception/

Duration

The DPA program will be rolled out in 2018. Based on 

expected demand, Michigan anticipates that funds will likely

be exhausted by the 4th quarter of 2019.

13. Program Interactions

with Other HFA 

Programs

The DPA program will take advantage of an existing 

infrastructure of MSHDA-approved lenders who are actively 

originating both first lien mortgage and down payment 

assistance loans as part of MSHDA’s single family loan 

origination programs.

The DPA program loan must be subordinate to a MSHDA 

originated first lien mortgage loan, and cannot be used in 

conjunction with other MSHDA down payment assistance 

programs.

 14. Program Interactions

 with HAMP

None.

 15. Program Leverage with 

 Other Financial

 Resources

MSHDA may use tax-exempt bond proceeds as the source of 

funding for the accompanying first mortgage lien.
HHF Michigan Date: October 1, 2018

C-1

SCHEDULE C

PERMITTED EXPENSES

Michigan

One-time / Start-Up Expenses:

Initial Personnel $0.00

Building, Equipment, Technology $0.00

Professional Services $57,270

Supplies / Miscellaneous $0.00

Marketing /Communications $787,500

Travel $0.00

Website development /Translation $0.00

Contingency $0.00

Subtotal $ 844,770

Operating / Administrative 

Expenses:

Salaries $33,756,910

Professional Services (Legal, 

Compliance, Audit, Monitoring) $ 5,000,000

Travel $160,000

Buildings, Leases & Equipment $ 1,757,730

Information Technology & 

Communications $ 1,375,000

Office Supplies/Postage and 

Delivery/Subscriptions $603,000

Risk Management/ Insurance

Training $ 25,000

Marketing/PR $9,535,003

Miscellaneous $ 650,000

Subtotal $ 52,862,643

Transaction Related Expenses:

Recording Fees $2,650,000 

Wire Transfer Fees $405,000 

Counseling Expenses

File Intake $94,440

Decision Costs $0.00

Successful File $0.00

Key Business Partners On-Going $4,490,000
HHF Michigan Date: October 1, 2018

C-2

Subtotal $ 7,639,440

Grand Total $ 61,346,853

% of Total Award 8.06%

Award Amount $761,622,301