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TWELFTH AMENDMENT TO 

COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT 

and 

HFA PARTICIPATION AGREEMENT 

This Twelfth Amendment to Commitment to Purchase Financial Instrument and HFA 

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

Schedule A attached hereto as the Twelfth Amendment Date (the “Amendment Date”), by 

and among the United States Department of the Treasury (“Treasury”), the undersigned 

party designated as HFA whose description is set forth in Schedule A attached hereto (for 

convenience, a “state housing finance agency” or “HFA”) and the undersigned institution 

designated by HFA to participate in the program described below (“Eligible Entity”). 

Recitals 

WHEREAS, Treasury, HFA and Eligible Entity entered into that certain Commitment to 

Purchase Financial Instrument and HFA Participation Agreement (the “Original HPA”) dated 

as of the Closing Date set forth on Schedule A attached hereto, as previously amended by those 

certain Amendments to Commitment to Purchase Financial Instrument and HFA Participation 

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

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

HPA”), in connection with Treasury's federal housing program entitled the Housing Finance 

Agency Innovation Fund for the Hardest Hit Housing Markets (the “HHF Program”), which 

was established pursuant to the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 

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

WHEREAS, HFA and Eligible Entity submitted a request to Treasury to make certain revisions 

to their Service Schedules and Permitted Expenses, as applicable, and Treasury has agreed to the 

same; 

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

all approved modifications to the Service Schedules and Permitted Expenses, as applicable; 

Accordingly, in consideration of the representations, warranties, and mutual agreements set forth 

herein and for other good and valuable consideration, the receipt and sufficiency of which are 

hereby acknowledged, Treasury, HFA and Eligible Entity agree as follows. 

Agreement 

1. Amendments 

A. Definitions. All references in the Current HPA to the “Agreement” shall mean the 

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

to Schedules A, B or C shall mean the Schedules A, B or C attached to this Amendment. All 

references herein to the “HPA” shall mean the Current HPA, as further amended by this 

Amendment. 
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B. Schedule A. Schedule A attached to the Current HPA is hereby deleted in its entirety 

and replaced with Schedule A attached to this Amendment. 

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

and replaced with Schedule B attached to this Amendment. 

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

and replaced with Schedule C attached to this Amendment. 

2. Representations, Warranties and Covenants 

A. HFA and Eligible Entity. HFA and Eligible Entity, each for itself, make the 

following representations, warranties and covenants to Treasury and the truth and accuracy 

of such representations and warranties and compliance with and performance of such 

covenants are continuing obligations of HFA and Eligible Entity, each as to itself. In the 

event that any of the representations or warranties made herein cease to be true and correct or 

HFA or Eligible Entity breaches any of its covenants made herein, HFA or Eligible Entity, as 

the case may be, agrees to notify Treasury immediately and the same shall constitute an 

Event of Default under the HPA. 

(1) HFA and Eligible Entity each hereby certifies, represents and warrants as of the 

date hereof that each of the representations and warranties of HFA or Eligible Entity, as 

applicable, contained in the HPA are true, correct, accurate and complete in all material 

respects as of the date hereof. All covenants of HFA or Eligible Entity, as applicable, 

contained in the HPA shall remain in full force and effect and neither HFA, nor Eligible 

Entity is in breach of any such covenant. 

(2) Eligible Entity has the full corporate power and authority to enter into, execute, 

and deliver this Amendment and any other closing documentation delivered to Treasury 

in connection with this Amendment, and to perform its obligations hereunder and 

thereunder. 

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

Amendment and any other closing documentation delivered to Treasury in connection 

with this Amendment, and to perform its obligations hereunder and thereunder. 

3. Miscellaneous 

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

are incorporated herein by this reference. 

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

them in the HPA. 

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

jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or 

unenforceability without invalidating the remaining provisions of the HPA, and no such 
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prohibition or unenforceability in any jurisdiction shall invalidate such provision in any other 

jurisdiction. 

D. This Amendment may be executed in two or more counterparts (and by different 

parties on separate counterparts), each of which shall be deemed an original, but all of which 

together shall constitute one and the same instrument. Facsimile or electronic copies of this 

Amendment and any other closing documentation delivered in connection therewith shall be 

treated as originals for all purposes. 

[SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE 

INTENTIONALLY LEFT BLANK] 
[Signature Page to Twelfth Amendment to HPA – Tennessee] 

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

execute and deliver this Amendment as of the Amendment Date. 

HFA: TREASURY: 

TENNESSEE HOUSING DEVELOPMENT 

AGENCY 

UNITED STATES DEPARTMENT OF THE 

TREASURY 

By: /s/ Ralph M. Perrey By: 

Name: Ralph M. Perrey Name: Mark McArdle 

Title: Executive Director Title: Deputy Assistant Secretary for 

 Financial Stability 

 

ELIGIBLE ENTITY:

TENNESSEE HOUSING DEVELOPMENT 

AGENCY 

By: /s/ Ralph M. Perrey 

Name: Ralph M. Perrey 

Title: Executive Director 

 
 

EXHIBITS AND SCHEDULES 

Schedule A Basic Information 

Schedule B Service Schedules 

Schedule C Permitted Expenses 
A-1 

SCHEDULE A

BASIC INFORMATION 

Eligible Entity Information: 

Name of the Eligible Entity: Tennessee Housing Development Agency1

Corporate or other organizational form: body, politic and corporate; political subdivision 

and instrumentality of the State of Tennessee, 

established and existing under the Tennessee 

Housing Development Agency Act, Tenn. Code 

Ann. § 13-23-101 et seq. 

Jurisdiction of organization: Tennessee

Notice Information: 

 

HFA Information: 

Name of HFA: Tennessee Housing Development Agency1

Organizational form: body, politic and corporate; political subdivision 

and instrumentality of the State of Tennessee, 

established and existing under the Tennessee 

Housing Development Agency Act, Tenn. Code 

Ann. § 13-23-101 et seq. 

Date of Application: September 1, 2010 

Date of Action Plan: September 1, 2010 

Notice Information: Same as notice information for Eligible Entity 

Program Participation Cap: $302,055,030.00 

 

1

 References in the Agreement to the term “HFA” shall mean Tennessee Housing Development Agency (“THDA”) in its 

capacity as an HFA as such term is used in the Agreement; references in the Agreement to the term “Eligible Entity” shall 

mean THDA, in its capacity as Eligible Entity as such term is used in the Agreement. 

Notwithstanding anything to the contrary in the Agreement, (A) for purposes of Section 4(G) thereof (as amended by the 

Tenth Amendment), annual audited financial statements shall be due no later than one hundred eighty (180) days after the 

end of THDA’s fiscal year, and (B) for purposes of Section 7 thereof, the powers and authority of THDA shall be 

governed and construed in accordance with the laws of the State of Tennessee. 

For the avoidance of doubt, THDA has no obligation to ensure that the funds in the Depository Account are collateralized 

should the amount of money in the account be in excess of the FDIC insurance limits. 
A-2 

Portion of Program Participation Cap 

Representing Original HHF Funds: N/A 

Portion of Program Participation Cap 

Representing Unemployment HHF Funds: $81,128,260.00 

Rounds 1-4 Funding Allocation: $217,315,593.00 

Round 5 Funding Allocation: $84,739,437.00 

Permitted Expenses: $35,590,599.07 

Closing Date: September 23, 2010 

First Amendment Date: September 29, 2010 

Second Amendment Date: December 16, 2010 

Third Amendment Date: May 25, 2011 

Fourth Amendment Date: September 28, 2011 

Fifth Amendment Date: December 8, 2011 

Sixth Amendment Date: May 3, 2012 

Seventh Amendment Date: November 15, 2012 

Eighth Amendment Date: June 11, 2014 

Ninth Amendment Date: September 29, 2015 

Tenth Amendment Date: April 1, 2016 

Eleventh Amendment Date: June 28, 2016 

Twelfth Amendment Date: December 19, 2016 

Eligible Entity Depository Account Information: See account information set forth in the 

Depository Account Control Agreement between 

Treasury and Eligible Entity regarding the HHF 

Program. 
SCHEDULE B

SERVICE SCHEDULES

The Service Schedules attached as Schedule B to the Current HPA are hereby deleted in their 

entirety and replaced with the attached Service Schedules (numbered sequentially as Service 

Schedule B-1, Service Schedule B-2, et. seq.), which collectively comprise Schedule B to the 

HPA.
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SCHEDULE B-1

Tennessee Housing Development Agency 

Hardest Hit Fund Program (HHFP)

Summary Guidelines

1. Program Overview The Tennessee Housing Development Agency (THDA) Hardest

Hit Fund Program (HHFP) will provide loans to unemployed or 

substantially underemployed homeowners, or those homeowners

impacted by a recent divorce or death of a spouse, who, through

no fault of their own, are financially unable to make their

mortgage payments and are in danger of losing their homes to

foreclosure. 

Loan proceeds will be used to pay all mortgage and mortgagerelated expenses (e.g., property taxes, homeowner insurance,

homeowner dues) (i) until, for those unemployed or substantially

underemployed homeowners, the homeowner secures

employment or completes training for a new career and (ii) for 

all eligible homeowners, subject to maximum assistance criteria

described in Section 9. 

For homeowners who were unemployed or substantially

underemployed and accumulated payment arrearages, but have

since found a new job, reinstatement assistance will be available. 

2. Program Goals To assist unemployed or substantially underemployed

homeowners, or those homeowners impacted by a recent

divorce or death of a spouse, to remain in their homes and make

monthly payments on their mortgages and mortgage related

expenses such as property taxes, homeowner insurance,

homeowner dues, and/or past-due mortgage payments 

(arrearages) so that they may avoid delinquency and foreclosure. 

3. Target Population /

Areas

This program will be available in all Tennessee counties. 

THDA previously provided additional assistance over a longer

period of time to eligible homeowners living in targeted or 

“hardest hit” counties, defined as those counties showing greater

than average distress based on a combination of unemployment

rate, the percent of the state’s foreclosures in that county, and

delinquency rates. Twenty-nine counties were chosen as targeted

based on the fact that they scored high on two of three factors, as 

follows: having an unemployment rate at or above the state

average rate, having a high percentage of the state’s foreclosure 
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 filings (in the 75th percentile of counties), having a high

delinquency rate (again, in the 75th percentile of counties). 

4. Program Allocation

(Excluding

Administrative

Expenses)

$185,764,430.93 

$81,128,260 of this program allocation is reserved to provide

assistance to borrowers whose hardship is employment-related. 

5. Borrower Eligibility

Criteria

Unemployed or substantially underemployed homeowners, or

those homeowners impacted by a recent divorce or death of a

spouse, who, through no fault of their own, are unable to make

their mortgage payments and are at risk of foreclosure.

Homeowners will be required to provide a financial hardship

affidavit with appropriate documentation as to the cause of their

hardship, as specified in the program guidelines. Homeowners 

will be required to provide continual documentation certifying to

their ongoing hardship. 

Employed homeowners who have previously been unemployed

or substantially underemployed and who are delinquent, but who 

can resume future payments without additional assistance. 

Substantially underemployed homeowners are those

homeowners whose income has been reduced by 30% or more. 

The event or incident which results in unemployment or 

substantially underemployment, or the applicable divorce or 

death of a spouse impacting a homeowner, must have occurred

after January 1, 2008. 

Principal, Interest, Taxes and Insurance > 31% of household

income after job loss/reduction of income. 

Asset test: Borrower must not have > 6 months reserves. 

Borrower must be a low- or moderate-income homeowner 

(maximum $92,680 household income). 

Eligibility for program assistance will be determined primarily

by participating foreclosure prevention partners using THDA 

underwriting criteria stated above. 

Funds will be allocated on a first-come/approved, first-served

basis. 
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6. Property / Loan 

Eligibility Criteria

Existing single-family homes or condominiums (attached or

detached) including manufactured homes on foundations

permanently affixed to real estate owned by the borrower. 

Tennessee owner-occupied, primary residences only. 

7. Program Exclusions Total unpaid principal balances > $275,000. 

Manufactured homes not considered real property.

Non-legal U.S. resident. 

8. Structure of Assistance 0% interest, non-recourse, deferred-payment, forgivable,

subordinate loan. A forgiveness clause will reduce the loan

amount by 20% a year for every year the borrower stays in the

home up until five years. At the end of five years, the note will

be considered satisfied and THDA will release the lien securing

the note. 

Loan funds are due and payable if property is sold, refinanced or 

no longer owner occupied and there are sufficient equity

proceeds available (unless otherwise prohibited under applicable

federal law). 

All deferred, subordinate mortgages will be evidenced by a

Home Equity Line of Credit promissory note and secured by a

deed of trust on the property. Borrowers will be required to sign

and acknowledge via written agreement indicating the program

guidelines. 

Any funds returned according to established program guidelines

will be recaptured and used to assist additional homeowners 

in accordance with the Agreement.

9. Per Household

Assistance

Maximum amount available per homeowner: 

• Assistance for up to 36 months, subject to a maximum

assistance cap of $40,000. 

• There is no maximum monthly payment amount;

however, total loan amount cannot exceed applicable

benefit. 

10. Duration of Assistance Homeowners may receive assistance up to a maximum of 36 

months. Should a homeowner become reemployed within the

applicable period, the homeowner may continue receiving

assistance for up to an additional two months after 
B-1-4 

 reemployment. Additionally, if a homeowner becomes 

reemployed within the applicable period and the homeowner’s 

mortgage payment exceeds 31% of their current income, they

are eligible for continued assistance. 

Any reinstatement assistance shall be made in one payment. 

11. Estimated Number of 

Participating 

Households

Based on the current average amount of assistance of $25,000, 

we would expect to assist approximately 7,355 homeowners. 

With the increase in available assistance amounts and terms, we 

do expect the average amount of assistance to increase and the

number of homeowners assisted to decrease. Recaptured funds 

will be returned to the program and used for additional

homeowners, which could extend the program until as late as 

December 31, 2020. 

12. Program Inception /

Duration

The program began serving the targeted, hardest hit counties

January 1, 2011. On March 1, 2011, the program was expanded

and all counties became eligible for the program. All funds are

expected to be committed by December 31, 2014. Recaptured

funds will be returned to the program and used for additional

homeowners, which could extend the program until as late as 

December 31, 2020. 

13. Program Interactions

with Other HFA

Programs

None. 

14. Program Interactions

with HAMP

Borrowers can receive HAMP assistance (including UP program

assistance), as applicable, prior to or after receiving Hardest Hit 

Fund assistance. 

15. Program Leverage with 

Other Financial

Resources

None. 
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SCHEDULE B-2

Tennessee Housing Development Agency 

HHF Blight Elimination Program (BEP)

Summary Guidelines

1. Program Overview The Tennessee Housing Development Agency (THDA) will

administer the Hardest Hit Fund Blight Elimination Program

(BEP) to assist in the removal of blighted properties in targeted

areas within the State of Tennessee. 

THDA will work in partnership with approved non-profit

agencies and land banks (collectively, Program Participants) to

strategically target blighted residential single-family properties

for demolition, site improvement, and acceptable reuse. 

2. Program Goals The BEP will reduce foreclosures, promote neighborhood

stabilization, and maintain or improve property values through

the demolition of vacant, abandoned, blighted residential

structures, and subsequent greening/improvement of the

remaining parcels. 

THDA has identified meaningful indicators that will enable

THDA to track and quantify the program’s impact in the

targeted areas. 

3. Target Population /

Areas

This program will focus on targeted counties in Tennessee with

high numbers of vacancies and foreclosures. The presence of a

land bank will also be considered. This program will be made

available to the following counties: Shelby, Madison,

Montgomery, Hamilton, Knox and Anderson. 

THDA program guidelines will ensure that demolition and

greening/improvement is designed to increase values of

neighboring properties and will promote a positive effect on 

preserving existing neighborhoods. 

4. Program 

Allocation

(Excluding 

Administrative

Expenses)

$10,000,000.00
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5. Property 

Eligibility Criteria 

• Existing single-family (one to four unit) home. 

• The property must be located in the State of Tennessee. 

• The property must be located in a targeted area as defined

in the program guidelines. 

• The property must be vacant at the time of acquisition. For 

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

property 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. 

• The property is a nuisance due to abandonment and/or other 

adverse conditions as identified in the program guide. 

• The cost to acquire (if necessary), demolish, green, and

maintain the property for up to three years does not exceed 

$25,000. 

• THDA will determine property eligibility including the

following requirements: 

(1) Pass a Property Condition test; 

(2) Meet the State of Tennessee’s definition of “Blight”

according to Title 13, Public Planning and Housing;

and 

(3) Qualify for lawful demolition. 

6. Ownership / Loan 

Eligibility 

Criteria

Program Participant must hold title to the property (may 

acquire title in conjunction with the program transaction). 

The property must be subject to a loan that can be modified or 

extinguished. 

7. Program Exclusions • Commercial properties, multifamily properties. 

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

register. 

• Properties not meeting THDA’s eligibility requirements as 

specified in the program guidelines. 
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B-2-3 

8. Structure of Assistance THDA will determine acceptability of project sites. 

Program Participant will be responsible for acquisition of the 

property (if applicable), demolition work, greening/site 

improvement and on-going property maintenance. 

The Program Participant will submit an application to THDA 

containing the location of the property, neighborhood conditions, 

estimated cost of structure removal, estimated cost of greening (if 

applicable), and the end use of the vacant lot. 

Required documentation must be submitted by the Program 

Participant to THDA for review and approval in THDA’s sole 

discretion pursuant to the program guidelines. 

HHF funds will be provided in the form of a loan to the Program 

Participant, upon completion of blight elimination activity on the 

property, verification by THDA and execution of loan 

documentation. Total assistance will provide for acquisition costs 

(if applicable), demolition work, greening/site improvement costs, 

on-going property maintenance, and a one-time administrative fee 

of $1,000 per property for the Program Participant. 

The loan will be evidenced by a promissory note in favor of 

THDA and secured by a deed of trust on the property. The loan 

will be up to a maximum of $25,000 with a deferred payment, 

forgivable over a 3 year term at 33.3% per year with a 0% interest 

rate so long as THDA’s requirements are met. 

Eligible costs include removal of debris, contractor’s fees, permit 

fees, final inspections, environmental assessments, greening and 

maintenance fees in the amount of $1,800 for a three-year period, 

and any other fees or charges required to complete the property 

demolition, removal and site improvement, not to exceed 

$25,000. If the cost to demolish the property exceeds the $25,000 

maximum, the non-profit Participant must pay the excess amount 

upfront. 
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B-2-4 

The outstanding loan balance will become due and payable if the

property or any interest in it is sold, or otherwise conveyed, or its

title transferred, or it is used for an unauthorized purpose prior

to the end of the loan term or if any ownership interest in the 

property owner is sold or otherwise conveyed. Special

considerations may be made by THDA to release or subordinate

its lien prior to the end of the loan term based upon the merit of

the request and the proposed positive impact to the community.

The method for calculating the portion of the outstanding balance

to be forgiven or released will be determined based upon the

closing date of the HHF funding. 

Any funds returned according to established program guidelines

will be recaptured and used in the program in accordance with

the Agreement. 

9. Per Property Assistance Maximum amount of assistance may not exceed $25,000 per

property. Maximum assistance amount includes acquisition costs

(if applicable); demolition and greening/improvement costs; and a

one-time project management and maintenance fee to cover

management and maintenance expenses for a period of three (3)

years. 

10. Duration of Assistance Funds will be disbursed on a first-come-first-served basis.

11. Estimated Number 

of Properties

Demolished

Based on the maximum amount of assistance of $25,000, 

approximately 400 blighted properties are anticipated to be

demolished and greened. Program will be expanded if funds are

available. 

12. Program Inception 

/ Duration

The program will begin on November 1, 2015 and will last as 

long as the allocation of funds is available or until December 31, 

2020. 

13. Program 

Interactions with 

Other HFA

Programs

None.

14. Program 

Interactions with 

HAMP

None.

15. Program Leverage with 

Other Financial

Resources

If the cost to demolish and green the property are in excess of the

$25,000 program cap, the Program Participant must pay the

excess amount up front. 
B-3-1 

SCHEDULE B-3

Tennessee Housing Development Agency

Principal Reduction with Recast Program or Lien Extinguishment (PRRPLE) 

Summary Guidelines 

1. Program Overview The Tennessee Housing Development Agency (THDA) 

Principal Reduction with Recast Program or Lien Extinguishment

(PRRPLE) will lower monthly mortgage payments to affordable 

levels for eligible homeowners by providing (i) a reduction in the

principal balance of their first mortgage loan, combined with a 

loan recast or modification, or (ii) principal reduction which 

results in a full lien extinguishment.

In conjunction with the principal reduction described above, 

PRRPLE will also pay mortgage-related expenses (e.g., principal,

interest, property taxes, homeowner insurance, and servicerrelated fees) necessary to bring homeowners current on their

mortgage. 

2. Program Goals The goal of the program is to reduce delinquencies and 

foreclosures by lowering mortgage payments to affordable levels 

for homeowners who have encountered a financial burden due to 

an eligible hardship, including but not limited to homeowners 

who are living on social security, long-term disability or other 

fixed income source. 

3. Target Population

/ Areas

This program will be available statewide in all Tennessee

counties. 

THDA will target homeowners who are low-to-moderate income 

and meet THDA mortgage loan income limits. 

4. Program

Allocation 

(Excluding 

Administrative 

Expenses)

$10,700,000.00. 
B-3-2 

5. Borrower Eligibility

Criteria

In order to be eligible for assistance under PRRPLE, 

homeowners must meet the following criteria: 

• Maximum household income not to exceed $95,900.

• Asset test: homeowner must not have more than 12 months of 

principal, interest, taxes, and insurance (PITI) in reserves.

• Homeowner must be a U. S. citizen or a permanent resident 

alien.

• Homeowner has experienced an eligible financial hardship (as 

set forth in the program guidelines) which occurred after 

January 1, 2010. (Permanently disabled homeowners are 

exempt from this requirement.)

• Homeowner is required to complete a budgeting/housing 

counseling session before closing.

In order to receive principal reduction with a loan recast or 

modification, the following additional criteria apply: 

• Homeowner suffered a loss of income equal to or greater than 

30% due to a divorce, death of a spouse, or underemployment.

• Pre-assistance monthly PITI exceeds 35% of household 

income.

• Unpaid principal balance of first mortgage loan does not exceed 

$275,000.

• Post-assistance monthly PITI does not exceed 30% of 

household income, and is not lower than 25% of household 

income.

• Post-assistance loan-to-value (LTV) ratio is not less than 78%.

In order to receive a full lien extinguishment, the following 

additional criteria apply: 

• Primary household income is from social security, long-term 

disability or other fixed income source.

• Pre-assistance monthly PITI exceeds 30% of household 

income. 

• Homeowner has a first mortgage loan with an unpaid principal 

balance that does not exceed $40,000.

Eligibility for program assistance will be determined by THDA 

in its sole discretion, based on the criteria stated above and as 

otherwise set forth in the program guidelines. Funds will be 

allocated on a first-come/approved, first-served basis.
B-3-3 

6. Property / Loan

Eligibility Criteria

Existing single-family homes or condominiums (attached or

detached) including manufactured homes on permanent 

foundations assessed by taxing authority as real property.

Owner-occupied, primary residences only. 

7. Program Exclusions • For principal reduction with a loan recast or modification, first 

mortgage loans with unpaid principal balance in excess of 

$275,000.

• For lien extinguishment, mortgage loans with an unpaid 

principal balance in excess of $40,000.

• Manufactured homes not considered real property. 

• Homeowners who have previously received HHF funds 

through the KMTH program.

• Homeowners who are self-employed.

• Homeowners who are in an “active” bankruptcy.

• Homeowners with a subordinate lien that is delinquent or in 

foreclosure status.

8. Structure of Assistance THDA will structure the PRRPLE assistance as a 0% interest,

non-recourse, deferred-payment, forgivable, subordinate loan 

with a term of 10 years. The loan will be forgiven 20% per year 

in years 6 through 10. At the end of tenth year, the note will be 

considered satisfied and THDA will, upon request, release the

lien securing the note. 

Loan funds are due on sale or, refinance or if the property is no 

longer owner-occupied. 

The loan will be evidenced by a promissory note and secured by

a Deed of Trust against the property. 

Any funds returned according to established program guidelines 

will be recaptured and used to assist additional homeowners 

through December 31, 2020 in accordance with the Agreement. 

After December 31, 2020, any unused funds will be returned to 

the U. S. Department of the Treasury in accordance with the 

Agreement. 

9. Per Household

Assistance

Maximum amount available per homeowner is $40,000. 
B-3-4 

10. Duration of Assistance One-time payment to servicer. 

11. Estimated Number of

Participating

Households

Based on the maximum of $40,000 of PRRPLE assistance

available to homeowners, we anticipate providing 268 

homeowners with assistance. 

Recaptured funds will be returned to the program and used to 

help additional homeowners in accordance with the 

Agreement. 

12. Program Inception /

Duration

The statewide launch of the PRRPLE will occur on March 1, 

2017. The program will begin accepting applications on launch 

date. 

All funds are expected to be committed by September 30, 2020. 

Recaptured funds will be returned to the program and used to 

help additional homeowners in accordance with the 

Agreement, which could extend the program through December 

31, 2020. 

13. Program Interactions

with Other HFA 

Programs

Homeowners who have received assistance through the HHF

funds in the KMTH program are not eligible to apply for the 

PRRPLE program. 

14. Program Interactions

with HAMP

No. 

15. Program Leverage with

Other Financial

Resources

No. 
B-4-1 

SCHEDULE B-4

Tennessee Housing Development Agency

Down Payment Assistance Program (HHF-DPA)

Summary Guidelines

1. Program Overview The Tennessee Housing Development Agency (THDA) will provide 

a Down Payment Assistance Program (HHF-DPA) as an incentive 

to qualified first-time homebuyers to purchase a residence in HHF 

Targeted Zip Codes (as specified in Section 3) within Tennessee. 

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 

distressed zip codes, stabilize housing prices and help to prevent 

future foreclosures.

2. Program Goals The HHF-DPA Program will help homeowners avoid foreclosure by 

supporting the stabilization of housing prices in targeted zip codes.

THDA will identify meaningful indicators that will track and 

quantify the HHF-DPA Program’s impact in HHF Targeted Zip 

Codes.

3. Target 

Population /

Areas

This program will be available in the following approved HHF 

Targeted Zip Codes within Tennessee:

37037, 37040, 37042, 37073, 37086, 37110, 37115, 37148, 37172, 

37186, 37207, 37208, 37217, 37218, 37303, 37311, 37321, 37323, 

37404, 37406, 37411, 37412, 37416, 37660, 37716, 37721, 37813, 

37821, 37871, 37912, 37914, 37917, 37921, 37924, 38012, 38016, 

38018, 38053, 38063, 38105, 38107, 38109, 38111, 38115, 38116, 

38122, 38125, 38127, 38128, 38133, 38134, 38135, 38141, 38301, 

38305.

For these zip codes, THDA evaluated five housing market distress 

indicators—seriously delinquent mortgage loans, negative equity, 

short sales, REO sales, and foreclosures—as well as origination 

data. Each of these zip codes exceeded the statewide rate in at least 

four out of the five distressed housing market indicators, and 

achieved a minimum threshold origination volume in 2015.
B-4-2 

4. Program 

Allocation

(Excluding

Administrative

Expenses)

$60,000,000.00. 

5. Borrower 

Eligibility Criteria

Eligible borrowers must qualify for and meet all requirements to 

receive a THDA Great Choice mortgage loan. For example, the 

loan must be a first lien, 30-year, fixed-rate mortgage loan 

originated through a THDA-approved lender, and either 

conventional or insured or guaranteed by the Federal Housing 

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

Department of Agriculture – Rural Development (RD).

Eligible borrowers must also meet the following criteria:

• Income may not exceed THDA household income limits. 

• Must be First-Time Homebuyers as defined by IRS Tax Code. 

• Must complete a THDA-approved homebuyer education course 

prior to closing.

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

• Must have a minimum FICO score of 640 (middle score of three 

scores or lowest if two scores).

• Maximum debt-to-income ratio may not exceed 45%.

Eligibility for program assistance will be determined by THDA in 

its sole discretion, subject to the requirements stated above and as 

otherwise set forth in the program guidelines.

Funds will be allocated on a first-come/approved, first-served basis.

6. Property / Loan 

Eligibility 

Criteria

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

unit, a townhome, a manufactured home on a foundation 

permanently affixed to real estate owned by the borrower, or a 

two-to-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 an HHF Targeted Zip Code.

• Property must meet Insurer or Guarantor’s guidelines.

• Property must meet the HHF-DPA purchase price limits as 

specified in the THDA Originating Agent Guide.

 
B-4-3 

7. Program Exclusions • Borrowers who received assistance from other HHF Programs.

• Borrowers convicted of any mortgage-related felonies or other 

prohibited crimes in the past ten years, in accordance with 

Section 1481(d) of the Dodd-Frank Wall Street Reform and 

Consumer Protection Act.

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

closing costs, will be made available to homeowners in the form of a 

zero-percent (0%) interest, non-recourse, and forgivable second 

mortgage loan with a ten year term. This loan will be evidenced by a 

note and deed of trust in favor of THDA. The second mortgage loan 

will be forgivable at a rate of 20% per year, in years 6 through 10. 

THDA reserves the right to subordinate the second mortgage loan as 

further detailed in the HHF-DPA Program Guide.

The HHF-DPA loan shall be due on sale. . Any HHF-DPA loan 

funds recovered before September 30, 2020 will be recycled back 

into HHF-DPA and used to provide assistance to additional 

homeowners for the duration of HHF-DPA in accordance with the 

Agreement.

9. Per 

Household

Assistance

$15,000 per household. 

10. Duration of Assistance HHF-DPA Program funds will be used to reimburse participating 

lenders who fund the loan at closing once it is determined that all 

HHF-DPA Program requirements have been met. The loan must 

close prior to December 31, 2020.

11. Estimated Number 

of Participating 

Households

It is anticipated that the HHF-DPA Program will assist 

approximately 4,000 homeowners.

Funds recaptured prior to September 3, 2020, will be returned to 

the HHF-DPA and used to assist additional homeowners in 

accordance with the Agreement. 

12. Program 

Inception /

Duration

The HHF-DPA Program will begin in March 2017. The program 

will accept applications within 30 days from the launch date. 

All funds are expected to be committed by October 31, 2020. 

Funds recaptured prior to September 30, 2020, will be returned to 

the HHF-DPA and used to assist additional homeowners in 

accordance with the Agreement, which could extend HHF-DPA 

until December 31, 2020. 
B-4-4 

13. Program 

Interactions with 

Other HFA

Programs

The HHF-DPA 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 THDA’s mortgage loan origination programs. 

Homeowners may have received assistance through other HFA 

Programs. 

14. Program 

Interactions with 

HAMP

None.

15. Program Leverage 

with Other Financial

Resources

THDA uses tax-exempt bond proceeds 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 

state housing grants, Federal Home Loan Bank down payment 

assistance, Neighborhood Stabilization Program (NSP) Funds or 

HOME funds. HHF-DPA may not be leveraged with USDA-RD 

Grant Funding.
C-1

SCHEDULE C

PERMITTED EXPENSES

Tennessee

One-time / Start-Up Expenses:

Initial Personnel $50,264.40 

Building, Equipment, Technology $230,209.59 

Professional Services $19,668.00 

Supplies / Miscellaneous $3,265.33 

Marketing /Communications $741.73 

Travel $1,786.15 

Website development /Translation $15,000.00 

Contingency $0.00 

Subtotal $320,935.20

Operating / Administrative Expenses:

Salaries $18,933,044.07 

Professional Services (Legal, Compliance, 

Audit, Monitoring) $329,776.36 

Travel $134,186.56 

Buildings, Leases & Equipment $0.00 

Information Technology & Communications $723,697.19 

Office Supplies/Postage and 

Delivery/Subscriptions $328,098.82 

Risk Management/ Insurance $0.00 

Training $85,236.42 

Marketing/PR $2,118,848.92 

Miscellaneous $198,394.29 

Subtotal $22,851,282.62

Transaction Related Expenses:

Recording Fees $4,185,602.93 

Wire Transfer Fees $421,778.31 

Counseling Expenses 

File Intake $0.00 

Decision Costs $0.00 

Successful File $7,811,000.00 

Key Business Partners On-Going $0.00 

Subtotal $12,418,381.24

Grand Total $35,590,599.07
C-2

% of Total Award 11.78%

Award Amount $302,055,030.00