Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

1 Eligible Entity: Indiana Housing and Community Development Authority

Section One

1) Overview of Program

In August 2010, President Obama’s administration announced an additional $2 billion in 

Troubled Asset Relief Program (TARP) funds to states and jurisdictions that have experienced 

sustained unemployment rates above the national average over the last twelve months through 

the Housing Finance Authority Hardest Hit Fund (hereafter, HHF). The expansion in September 

2010 (Round 4 of the program) offered 18 states and jurisdictions the opportunity to develop an 

unemployment bridge program tailored to the needs of local communities. Indiana received 

$82,762,859 in this round. A subsequent expansion of the program (Round 5) brought Indiana’s 

total HHF allocation to $221,694,280. 

Indiana will deploy HHF funds to provide an unemployment bridge program to assist 

homeowners throughout the state to avoid foreclosure resulting from loss of income due to 

layoff, reduction in force, or other job loss through no fault or neglect of their own. As part of 

the unemployment bridge program, we will offer one-time assistance to recipients who, again 

through no fault of their own, are also in need of help to bring their mortgage current when 

assistance commences. Helping those homeowners to remain in their homes and preserve what 

is likely their largest asset both stabilizes local property values and fosters family and 

neighborhood stability in the face of record levels of unemployment and seismic shifts in 

Indiana’s manufacturing-based economy. Moreover, by offering families in Indiana’s most 

severely impacted counties eligibility for a longer term of assistance, we are tailoring our efforts 

to local conditions. Finally, by coordinating our efforts with Indiana’s Department of Workforce 

Development, (DWD), which administers Unemployment Insurance and many workforce

training programs in the state, and connecting unemployed homeowners with opportunities to 

engage in education, training or structured volunteer work, HHF funds will help us remedy the 

effects of both structural and cyclical unemployment while offering Hoosiers who face only 

time-limited unemployment the opportunity to give back to their communities through structured 

volunteer work. This is particularly critical as Indiana’s economic base continues its evolution

from manufacturing to knowledge.

a) U.S. Department of Treasury Guidance on HHF

Since HHF is an extension of TARP, all programs must satisfy funding requirements under the 

Emergency Economic Stabilization Act of 2008 (EESA). EESA’s purposes are to restore 

liquidity and stability to the financial system; in that context, TARP funds are intended to protect 

home values, preserve homeownership, and promote jobs and economic growth, all with the 

highest levels of public accountability.

Through published guidelines and guidance from staff in response to our inquiries, Treasury has 

limited eligible uses for these funds to an unemployment bridge program and related expenses, 

including one-time payments to bring unemployed and underemployed homeowners current on 

their mortgage. In addition, Treasury staff has informed Indiana that TARP funds may only 

cover the cost of services necessary and incidental to the implementation of HHF and that HHF 
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

2 Eligible Entity: Indiana Housing and Community Development Authority

may not be used to fund homeownership counseling. Indiana will implement procedures to 

ensure that TARP funds are not used to pay for inappropriate services. 

b) Indiana’s challenges and our responses to date

Like other states in receipt of HHF dollars, Indiana has been hard-hit by unemployment and 

foreclosure. Since November 2008, in fact, Indiana’s unemployment rate has been below the 

national average for only one month. In 2009, moreover, six percent of all mortgage loans in 

Indiana were subject to foreclosure filing at some point in the year. Together with the shift in the 

economy, these factors have contributed to falling property values, which are further 

destabilizing Indiana’s neighborhoods. Home prices in Indiana did not experience the bubble 

that the rest of the nation (and our Midwestern neighbors) enjoyed, yet we have shared in the 

decline. Indiana is working to address these issues on two fronts, with cutting edge training and 

technical assistance for job seekers through DWD, and homeownership preservation efforts 

through the Indiana Foreclosure Prevention Network (IFPN), an established network of 

foreclosure prevention specialists which will serve as our primary referral mechanism for HHF 

assistance. 

The Indiana Foreclosure Prevention Network: In early 2006, the Indiana Housing and 

Community Authority (IHCDA) hosted a series of meetings with government agencies and 

industry leaders to discuss the issues surrounding foreclosures and potential solutions for 

reducing foreclosures. Out of these meetings came a group known as the Indiana Foreclosure 

Prevention Network (IFPN). IFPN worked with elected officials to create legislation outlining a 

multi-tiered solution to delinquency and foreclosure in 2007. The initiative was launched in 

November 2007, and included a targeted public awareness campaign, a telephone helpline, and a 

state-wide network of trained mortgage foreclosure counselors.

Beginning in November 2007, IFPN launched a public awareness campaign to encourage 

individuals and families facing foreclosure to seek help by calling 1-877-GET-HOPE or by 

visiting www.877gethope.org. Upon contact, the homeowner is referred to a certified 

foreclosure prevention specialist with a local nonprofit organization. From its outset, the “Don’t 

Let the Walls Foreclose in on You” campaign has concentrated on grassroots strategies that have 

resulted in the distribution of more than 350,000 marketing and collateral pieces. Over the past 

two years, IFPN has purchased or secured donations for radio, print, and billboard advertising in 

communities experiencing the highest concentrations of foreclosure. In addition to mass 

marketing, IFPN has hosted eight borrower outreach events that have brought more than 900 

borrowers face-to-face with their lender or a housing counselor to discuss options to avoid 

foreclosure. In an effort to give troubled homeowners the opportunity to access foreclosure 

prevention assistance through the privacy of a phone call, in June of 2009 IFPN hosted a PhoneA-Thon. Finally, state legislation went into effect July 1st 2010 giving all homeowners for whom 

foreclosure proceedings have commenced the right to request and receive a settlement 

conference with a representative of their lender. Although we cannot yet assess the impact of 

this change in the law, we anticipate that the addition of HHF to our arsenal will vastly facilitate 

successful settlements. More than 85,000 Hoosiers have received assistance from IFPN since its 

inception. 
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

3 Eligible Entity: Indiana Housing and Community Development Authority

Indiana’s network of foreclosure prevention specialists helps homeowners communicate with 

their lenders/servicers and navigate the foreclosure prevention options offered by Making Home 

Affordable (MHA) and individual loan servicing companies and lenders. Unfortunately, through 

the end of June, only about one percent of eligible borrowers were in active trials or had secured 

permanent modifications.1

c) Program Overview

 Moreover, with the exception of HAMP-UP (which is too new to 

evaluate) and programs made available by loan servicing companies and lenders, assistance for 

unemployed borrowers in need of forbearance is virtually non-existent. 

In order to be most effective in Indiana, HHF must:

• Use existing networks and infrastructure to promote, support and administer programs 

developed with HHF;

• Facilitate intervention as early as possible;

• Require borrowers to make some meaningful contribution to their ongoing housing expenses;

• Facilitate borrower participation in job or entrepreneurship training, education leading to a 

degree or certification, or some form of voluntary service;

• Optimize the potential for sustainable results after assistance;

• Operate with the highest levels of transparency and fairness; and

• Collect and deploy data effectively to ensure that assistance at the micro level leads to 

sustainable change at the macro level.

Our proposed model incorporates each of these features. 

The model will be implemented statewide with provisions to assist both homeowners who can 

soon find a new job with their existing skills as well as homeowners who are unlikely to find 

new jobs in their current trades. Our unemployment bridge program will offer homeowners with 

the greatest need assistance to prevent foreclosure and position the family for long-term 

sustainability. Indiana’s two-tiered approach offers homeowners in communities with high 

foreclosure levels and high unemployment a longer maximum term of assistance, in recognition 

that in such communities, securing re-employment will be measurably (and verifiably) more 

difficult. Moreover, by requiring the homeowner to make some meaningful contribution to 

monthly housing expenses and engage in approved job readiness or entrepreneurship training,

education, or volunteer work, we affirm the homeowner’s role as a partner in crafting their 

future, rather than simply a passive recipient of assistance. 

Homeowners in need of assistance will utilize select members of Indiana’s existing IFPN 

infrastructure, composed of state-approved agencies, to certify their initial and ongoing 

eligibility for HHF dollars; IHCDA has selected twenty-four (24) agencies through a competitive 

proposal process, and will provide training to qualified counselors to help them to offer 

assistance related to HHF goals and objectives. An Indiana HHF-trained foreclosure specialist

will work will each individual homeowner to screen for eligibility and develop an individualized 

HHF action plan to address the homeowner’s particular needs; the HHF action plan will be 

 1 http://www.financialstability.gov/docs/June%20MHA%20Public%20REVISED%20072610.pdf
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

4 Eligible Entity: Indiana Housing and Community Development Authority

related solely to TARP-funded modification programs. IHCDA will review and approve 

eligibility applications and HHF action plans, and monitor each homeowner’s continued 

eligibility based on data provided by the counseling agency and the Indiana Department of 

Workforce Development. IHCDA will also closely monitor HHF results through ongoing 

reports from counselors and data-sharing agreements with the Indiana Department of Workforce 

Development. 

Indiana proposes to use tested and proven targeted outreach strategies, which may include 

events, informational materials and collaboration with local media outlets to inform the public of 

the availability of HHF dollars. Using the tagline “Building the Bridge to Recovery”, we have 

developed branding and marketing materials to communicate the availability of assistance for 

qualified households through HHF. IHCDA recently implemented a similar campaign revolving 

around our statewide foreclosure prevention efforts using the tagline “Don’t Let the Walls 

Foreclose in on You”; as a result of that effort, Indiana’s Foreclosure Prevention Hotline (1-877-

GET-HOPE) quickly ramped up to 70 calls per day and continues to build as the message 

reaches a wider audience (and more Indiana homeowners encounter difficulty) 

d) Program descriptions

The term sheet included as Schedule B-1 sets forth the proposed terms of assistance in more 

detail. Following is a brief summary:

i) Partial mortgage payment assistance: Indiana HHF assistance will provide partial 

mortgage payment assistance to eligible unemployed homeowners who have suffered 

job loss through no fault or neglect of their own. We will work with lenders and 

servicers in the state to complete participation agreements specifying the conditions 

under which payments must be accepted and applied to principal and interest. 

Homeowners will be required to contribute thirty percent (30%) of their current 

income toward Principal/Interest/Taxes/Insurance where appropriate (hereafter, PITI), 

with HHF dollars covering the balance. Borrowers will remit their monthly payment 

to U.S. Bank, the special servicer selected by IHCDA through a competitive process

(hereafter, Special Servicer). U.S. Bank will collect and aggregate partial payments 

from borrowers and forward in batches to IHCDA. After IHCDA confirms the 

recipient’s continued eligibility IHCDA will match the borrower’s payment with the 

appropriate amount of HHF funds and forward payments in batches to the borrower’s

loan servicer. The maximum term of assistance will be specified in the homeowner’s 

HHF action plan and may not exceed the maximum term available for the 

homeowner’s county. As a condition of assistance, borrowers must engage in one or 

more of the following:

(1) Job training programs that have been approved by the DWD Commissioner, such 

as training that would represent an eligible expenditure under either the Indiana 

Individual Training Account or Trade Adjustment Act programs. 

(2) Entrepreneurship training programs that have been approved by the Indiana 

Economic Development Corporation, Indiana’s quasi-governmental lead 

economic development agency.
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

5 Eligible Entity: Indiana Housing and Community Development Authority

(3) Educational programs accessible through accredited institutions that are eligible 

to receive payments on behalf of students under the Free Application for Federal 

Student Aid; this would include two-year degree programs such as those offered 

by Indiana Vocational Technical College and four-year degree programs such as

those offered by the eight campuses of the Indiana University system. Intake 

specialists will confirm that such training will further the individual’s progress 

toward a recognized certification or degree that will improve the beneficiary’s 

employment prospects.

(4) Structured volunteer activities, intended to both help participants build skills and 

build their sense of self-efficacy. 

In order to ensure that lenders and servicers accept payments through HHF and apply 

them appropriately to principal and interest, IHCDA may at its sole discretion make 

one-time payments of PITI to bring beneficiaries current on obligations such as pastdue mortgage payments or escrow shortfalls that would mitigate the effectiveness of 

ongoing assistance if left unpaid. On a limited basis, we may also provide this form 

of assistance to an employed individual who can document:

(1) A period of unemployment;

(2) An arrearage in their mortgage resulting from that unemployment; 

(3) Sufficient resources to make a meaningful contribution toward their arrearage;2

(4) Underemployment resulting in an inability to bring the mortgage current with 

their own resources.

and

The total amount of assistance made available through these avenues may not exceed the 

maximum amount available to borrowers based on their county of residence. Our 

proposed programs are tailored to meet the particular needs of Indiana, as follows:

i) Maximum term of assistance: Borrowers in the 46 counties classified as hardest hit3

ii) Maximum amount of assistance: All borrowers will be required to pay thirty percent 

(30%) of their income for PITI, and will be eligible for monthly assistance totaling 

the balance of their PITI obligation or $1,000, whichever is less. Total assistance will 

therefore not exceed $18,000 in targeted counties and $12,000 in non-targeted 

counties. If borrowers utilize any funds up front for mortgage reinstatement (as for 

example if they need to clear an arrearage), then their monthly assistance will either 

be for a shorter term (if their monthly obligation is $1,000), a lesser monthly amount 

or both. 

will be eligible for a maximum term of assistance of eighteen months. Borrowers in 

the balance of the state will be eligible for a maximum term of assistance of twelve 

months. In order to facilitate success once the borrower becomes re-employed, 

assistance will be available for up to three months after the borrower secures a new 

position (subject to these maximum term limitations).

iii) Maximum income and asset level to be eligible for assistance: Because we want to 

target individuals with the greatest need for assistance, we are limiting eligibility to 

 2 The target amount would be thirty percent (30%), as with other aspects of the program. 3 Our methodology for determining hardest-hit status is set forth in more detail in Section Two.
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

6 Eligible Entity: Indiana Housing and Community Development Authority

households with current incomes below 140% AMI. Moreover, individuals with 

liquid assets equal to six months or more of PITI will be ineligible for assistance.

iv) Requirement for participation in job training, education or volunteer work: In order 

to ensure that HHF assistance translates into long-term positive change for the 

homeowner, IHCDA plans to require that borrowers document that they are engaged 

in some form of job training, education or structured volunteer work during the period 

that they are receiving assistance. Through foreclosure prevention counseling, we 

will also help them to avoid potential pitfalls upon reemployment. 

v) Homeowner contribution to monthly housing expenses: In order to ensure that 

borrowers play a role in the preservation of their homes, IHCDA will require that 

borrowers contribute thirty percent (30%) of their current income toward PITI. 

vi) Ongoing monitoring of progress: The key to this entire system is the foreclosure 

prevention specialist, who will maintain contact with the borrower, monitor his or her 

progress against an HHF action plan, and work with borrowers, IHCDA and its 

Special Servicer and lending institutions to ensure that HHF assistance will result in a 

favorable and sustainable outcome for the client. Accordingly, we expect all 

participants to work with a specialist to develop an HHF action plan and maintain 

regular contact to confirm their progress against that plan. 

b) Program allocation and targeting

Under these assumptions, we will serve about 16,250 homeowners in Indiana. Our only 

preference in terms of households will be for veterans and current military personnel (active or 

reserve): they will receive priority of service over all other customers, but will not receive a

greater level of assistance. In terms of geographic preferences, homeowners residing in one of 

the forty-six (46) Indiana counties with higher distress levels will be eligible for a longer term of 

assistance (18 months as opposed to 12 months) and maximum assistance amount ($18,000 as 

opposed to $12,000) than families residing in the balance of the state.

c) Program delivery and partner expenses

In order to facilitate HHF delivery, we are budgeting roughly 18.7% of our total award amount 

for program delivery and partner expenses, including one-time set-up costs, 

transaction/processing costs, and foreclosure prevention activities directly related to HHF 

assistance. More detail on our proposed use of program delivery funds appears in Section Two.

d) Leverage

The primary leverage for the program will come from program recipients, who will be required 

to contribute toward their monthly housing expenses based on thirty percent (30%) of their 

current income. 
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

7 Eligible Entity: Indiana Housing and Community Development Authority

Section Two

1) Program Overview

a) Introduction

The purpose of HHF is to help families stay in their homes and avoid preventable foreclosure. 

Consistent with the purposes of EESA and TARP, Indiana’s proposed program will be offered in 

a manner that protects home values, preserves homeownership, promotes jobs and economic 

growth and provides public accountability. Indiana’s program is statewide in range and 

comprehensive in scope; at the same time, it is tailored to the unique needs and values of the 

Hoosier State. The program will focus on homeowners who are at risk of foreclosure due to a 

temporary or permanent reduction in income. Eligibility is limited to households with current 

incomes at or below 140% of Indiana’s Area Median Income and total mortgage debt below the 

Federal Housing Finance Agency’s conforming loan limit, as it may be adjusted from time to 

time. Indiana’s HHF will be available to homeowners at any point on the road to foreclosure, 

from those who have just experienced a hardship but are not yet delinquent on their mortgage to 

those who are at the point of sheriff’s sale. 

Indiana has faced significant challenges in the last year that have particularly impacted low to 

moderate income homeowners: 

i) Indiana has lost its status near the top of the foreclosure filings ranks only because the 

subprime crisis has caught up with more populous states in the west and south. With 

nearly 41,000 new foreclosure filings in 2009, concentrated particularly in the 

industrial corridors in the northern and eastern parts of the state, Indiana’s 

homeowners are more vulnerable than ever to the effects of foreclosure.

ii) With agriculture and manufacturing as its historic economic drivers, Indiana is 

particularly vulnerable to downturns in the economy; from July 2008 to July 2010, 

over 260,000 jobs evaporated, again concentrated particularly in the northern and 

eastern parts of the state4

. This represents nearly 8.5% of all Hoosier jobs. As the 

nascent recovery gains strength in other parts of the country, Indiana’s job growth has 

been strong5, but we have far to go before we reach pre-recession levels. Moreover, 

the job growth that Indiana (and the rest of the country) will see in coming years will 

be in industries requiring significant levels of education for wages once available to 

high school graduates in manufacturing jobs. Accordingly, education and training 

will be critical for former manufacturing workers seeking to compete in the twentyfirst century economy.

iii) Without discounting the devastating emotional and financial consequences of 

foreclosure on the family losing their home, we must also acknowledge the effect on 

the surrounding neighborhood. The Indiana University Center for Urban Policy and 

the Environment developed a statistical model based on foreclosures and housing 

values in Marion County (Indiana’s most populous county) and noted that during the 

 4 http://www.stats.indiana.edu/laus/laus_view2.html

5 http://www.wthr.com/Global/story.asp?S=12685388
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

8 Eligible Entity: Indiana Housing and Community Development Authority

period they studied, each foreclosure within a one-mile radius reduced the sales price 

of the average home by three to four percent.6 With foreclosures concentrated in 

areas in which job growth (and demand for housing) is already stagnant to declining, 

the impact on entire neighborhoods of multiple foreclosures can be tremendous. 

According to data prepared by CoreLogic (a private research firm), about 25% of 

Indiana’s homeowners with mortgages currently owe more than their house is worth, 

in no small part due to the drop in values spawned by foreclosures and the 

disappearance of jobs.

7

 If analysts at Deutsche Bank are right, moreover, this number 

could climb as high as 48% before the trend reverses.8

With all this in mind, our goals for HHF are as follows:

i) Reduce foreclosure: Because unemployed homeowners are generally not eligible for 

loan modifications but are at great risk for foreclosure due to loss of income, 

IHCDA’s primary goal is to help this specific population avoid foreclosure through 

the payment of part of their monthly housing obligations until they can secure reemployment. Our intent is to provide sufficient assistance to help the homeowner 

secure new employment; in hardest hit counties, as discussed further below, we are 

providing a longer maximum term of assistance under the theory that finding a job in 

those communities will take longer. As a result of our assistance, the slide in 

property values in Indiana will at least slow, preserving wealth for the millions of 

Hoosiers whose home is their largest asset (and most critical safety net).

ii) Help the homeowner during the critical early months of new employment: Because 

most employers impose a three month probationary period on their new hires during 

which employees may be fired without cause, we will provide assistance through the 

first three months of re-employment. 

iii) Create incentives for participation in programs that will facilitate more rapid reemployment in jobs with a future: By offering the homeowner the opportunity to 

update (and in appropriate cases, completely re-tool) their skills, we are positioning 

homeowners to compete for future jobs in a knowledge economy. For those who do 

not engage in either education or job training, we are offering opportunities to give 

back to the community through voluntary service.

iv) Help homeowners to help themselves by providing most but not all of the funds 

needed to meet monthly housing obligations: By requiring the homeowner to have 

some “skin in the game”, we both increase the number of homeowners we can help

and help homeowners to take responsibility for their own destiny. In the Hoosier 

state, government handouts are not viewed kindly. By positioning HHF assistance to 

provide a helping hand rather than a handout, we reduce public perception that a 

select number of lucky homeowners are getting something for nothing.

 6 http://www.policyinstitute.iu.edu/PubsPDFs/Foreclosures.pdf

7 http://www.corelogic.com/About-Us/ResearchTrends/Negative-Equity-Report.aspx 8 http://www.bloomberg.com/apps/news?pid=newsarchive&sid=adBYDzUMt68k
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

9 Eligible Entity: Indiana Housing and Community Development Authority

2) Program Description

As set forth in more detail in our term sheet, Indiana will provide sufficient assistance on a 

monthly basis to reduce an eligible recipient’s monthly housing obligation to no more than thirty 

percent (30%) of household income. We will seamlessly integrate HHF into the existing IFPN to 

complete intake and qualification processes and provide assistance on an as-needed basis to ease 

the borrower’s efforts to preserve the value of his or her home and conduct ongoing negotiation 

with lenders as needed; we will also coordinate our efforts with the Indiana Department of 

Workforce Development to incorporate information about the availability of HHF assistance into 

documents sent to unemployment insurance recipients, including the determination notice. As 

part of the unemployment bridge program, Indiana will also cover up to three delinquent housing 

payments (in an amount not to exceed $3,000) to bring a homeowner current on his or her 

mortgage and prevent ongoing accumulation of fees and penalties; this assistance may be 

extended both to currently unemployed homeowners and homeowners who have secured a new 

job but accumulated an arrearage during their unemployment period. Finally, we will offer up to 

three months of assistance (again not to exceed $3,000) after the borrower regains employment,

so that recipients of assistance can get through their probationary/training period at work. Any 

assistance made available through these avenues will reduce the eligibility period and the amount 

the borrower may receive accordingly; that is, if a borrower in a hardest hit county receives three 

months of delinquent mortgage payments and three months of post-unemployment assistance, he 

or she may receive no more than twelve months of unemployment bridge payments. Following

are our projected results, measures, and numbers for the program.

Result Measure Number Verification

Potential participants learn about 

the program and apply for 

assistance.

Homeowners Intake/Triage 80,000 CounselorDirect (via 

Underwriting/Verification 45,000 www.877gethope.org)

HHF action plans proposed 20,000 CounselorDirect

Review and approve homeowner 

eligibility and HHF action plans

Eligible Applicants 

approved by lender

18,000 Lender approved 

secure communication 

portal

HHF action plans 

Approved by Lender and 

IHCDA

16,257 CounselorDirect

Payments to Counselors $26,877,100 IHCDA Internal 

Reports

Provide partial mortgage 

payments while homeowners

search for a job and engage in job 

training/education or voluntary 

service, as well as a one-time 

payment as needed to bring them 

current on their mortgage.

Homeowners served 16,257 IHCDA Loan 

Tracking System,

CounselorDirect, 

reports from third 

party servicer.

Average total assistance

amount9

$11,235

Defaults/foreclosures 

prevented10

14,632

 9

Average term of 16 months, including 2 months’ back payment and 3 months’ post-unemployment payment. 10 Presumes that ten percent will still go into foreclosure.
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

10 Eligible Entity: Indiana Housing and Community Development Authority

a) Population Served and allocation methodology

IHCDA estimates that slightly more than 16,250 homeowners will be directly assisted by Indiana 

HHF, with ancillary benefits for neighboring homeowners as discussed above. Our method of 

allocating funds will thus be customer-driven, with funds made available to homeowners on a 

first-come, first-served basis regardless of an individual’s county of residence. However, 

because we recognize that homeowners in the hardest hit Indiana counties will experience more 

difficulty securing re-employment, we will extend the maximum term of assistance in those 

counties by fifty percent, so that homeowners in non-targeted counties will be eligible for 

assistance for a maximum term of one year (or maximum assistance amount of $12,000) while 

homeowners in targeted counties will be eligible for assistance for a maximum term of eighteen 

months (or a maximum amount of $18,000). 

To establish the counties of greatest need in Indiana, IHCDA reviewed current and historic data 

regarding unemployment, foreclosure and housing appreciation in all 92 Indiana counties. Based 

on our analysis, we chose two variables to designate our counties of greatest need:

1) Current and historic county unemployment as a percentage of total state 

unemployment: Recognizing that the primary intent of HHF is to remedy the effects 

of unemployment, IHCDA weighted this variable at 70% of the final score for each 

county. Using data from DWD, IHCDA policy staff assigned a value of one to three 

to each Indiana county as follows:

a) Counties were assigned a 1 if they were above their market share of 

unemployment as of July 2010 (that is, if the percentage of unemployment 

claimants in the county is greater than the percentage of Indiana’s population 

represented by that county)

b) Counties were assigned a 2 if they were below their market share of 

unemployment as of July 2010 but their market share had increased from July 

2008.

c) Counties were assigned a 3 if they were below their market share of 

unemployment as of July 2010 and their market share had declined from July 

2008.

2) Current and historic foreclosure rates as a percentage of total foreclosures in the state: 

Because past foreclosure rates are also an important predictor of future foreclosure 

rates, ceteris paribus, we included this variable at a weight of 30% of the final score 

for each county. Using data furnished by county clerks in each of the 92 counties in 

Indiana, IHCDA policy staff assigned a value of one to three to each Indiana county 

as follows based on their foreclosure rate in July 2010 relative to other counties in the 

state: The top third were assigned a 1, the middle third were assigned a 2, and the 

bottom third were assigned a 3.

These variables helped us to identify the 46 hardest hit counties, as shown below (hardest hit 

counties are shaded in red).
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

11 Eligible Entity: Indiana Housing and Community Development Authority
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

12 Eligible Entity: Indiana Housing and Community Development Authority

b) Process used to secure feedback from state stakeholders

IHCDA collected feedback through meetings with select partners and stakeholders, including:

i) The Indiana Department of Workforce Development to discuss how best to optimize our 

partnership;

ii) The Governor’s Office, with the support of the Lieutenant Governor, to discuss how best to 

coordinate our efforts with other state agencies;

iii) The Indiana Mortgage Bankers Association to solicit feedback regarding the participation of 

lenders and servicers;

iv) The Indiana Association of Realtors to discuss how they might work with us to identify 

prospective customers;

v) The Indiana Credit Union League to discuss how we might work with credit unions to reach 

prospective customers.

In addition, we presented our proposed HHF model to our Board at its regular meeting on 

August 26 2010. 

Because of the limited lead time between notification of the availability of funds and the plan 

due date, however, we continued to hold stakeholder meetings over the next several months to 

refine our implementation processes and ensure we are reaching the right customers with our 

products. To continue our efforts, we are meeting with representatives of member banks for the 

Indiana Mortgage Banker Association as well as representatives of the Mortgage Foreclosure 

Trial Court Assistance Project (which is coordinated by the Indiana Supreme Court), among 

other key stakeholders.

c) Process Flows

Following is more detail on the specific processes by which eligible homeowners will qualify for 

and access assistance.

i) Intake Process

(1) Client goes to www.877gethope.org, either as a referral via IFPN marketing 

activities or via WorkOne staff referral. 

(2) Client completes online intake which feeds into CounselorDirect system.

(3) CounselorDirect then relays client information to the IFPN helpline/website 

administrator who then refers to a local HHF agency in the client’s service area.

(4) HHF Intake Specialist contacts client within 2 business days to discuss the 

process and to instruct client to complete the information in packet sent by 

specialist and submit as soon as possible but no later than 30 days from date of 

referral.

(a) If Specialist attempts on 3 separate dates to contact borrower at phone/email 

provided by borrower with no response, then letter is sent to client. If 14 days 

go by with no follow-up on the part of the client, the case is closed out and 

notated in system. If 30 days elapse with no return of packet, the case is 

closed out and notated in system. EXIT POINT #1
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

13 Eligible Entity: Indiana Housing and Community Development Authority

(b) If client contacts IFPN at a later date, they must start over again at STEP (1). 

Any subsequent assessment for assistance will take into account the client’s 

initial non-responsiveness. Further non-responsiveness will be cause for 

program dismissal.

(5) Specialist completes initial screen based on information provided and indicates 

probability of client’s eligibility for FHA, HARP, HAMP/HAFA, HHF and 

whether or not lender/servicer would be willing to modify their existing loan 

(through a “private label” option) with information given.

(a) If initial screen indicates that client is not eligible for HHF, Specialist will 

notify the client and refer to IFPN for foreclosure prevention services. EXIT 

POINT #2

(6) Once complete packet of information is submitted, Specialist will contact the 

client for follow-up phone intake. There are then initially 3 screens:

(a) Does the client have an FHA loan? If yes, then apply for FHA 

modification/forbearance. If no, go to STEP 6B. 

(b) Does the client have a GSE-backed loan? If no, go to STEP 7. If yes, then:

(c) Does the client qualify for HARP (current on payments, less than 125% LTV, 

ability to repay)? If yes, then apply for HARP plan. EXIT POINT #3. If no, 

go to STEP 7. 

(7) Is the client eligible for HAMP (home bought before 1/1/09, payment greater than 

31% of gross monthly income)? This includes the UP (HAMP Unemployment 

Program). If yes, then apply for HAMP via HOPE LoanPort (which interfaces 

with CounselorDirect). If no, then go to STEP 8. 

(8) Specialist works to receive response from lender:

(a) If applied for HAMP and answer is YES, then complete process with client 

through successful modification. EXIT POINT #4.

(b) If applied for HAMP and answer is NO, then determine:

(i) Does the case need to be escalated through MHA? 

(ii) Is the client best served by an out-of-home workout? If so, discuss this 

option and, if they are amenable, seek a HAFA alternative ($1k servicer 

incentive and $1.5k relocation funds for homeowner for short-sale or 

deed-in-lieu). 

(c) If applied for any other government program (as outlined above) and the 

answer is NO, then proceed to STEP 9.

(d) If applied for any other government program and the answer is YES, then 

Specialist completes process and the client is not HHF-eligible. EXIT 

POINT #5

(9) Specialist works to determine eligibility for HHF.

(a) Client must come in to office for face-to-face document verification meeting. 

This may be done by appointment in the county WorkOne office, where 

counseling agency will make Specialist available on a regular (to be 

determined) basis. 

(b) Specialist explains the program to the client and any requirements that they 

will need to complete in order to remain eligible.

(c) Specialist works with client to develop an HHF action plan.
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

14 Eligible Entity: Indiana Housing and Community Development Authority

(d) If the Specialist believes that the client is eligible, then the documents and 

application are sent via CounselorDirect to IHCDA staff for final review. 

Among these documents will include all previous notes on attempts to contact 

client, etc. 

(10) IHCDA staff will review information received and may contact specialist for 

further information on the client. The first Underwriter may choose to approve 

an application, at which time, the Specialist will be informed. 

(a) If application is denied, then client is not HHF-eligible. EXIT POINT #6. If 

first reviewer is unclear, skip to STEP 13. 

(11) Underwriter will complete loan/closing documents and send to specialist.

(12) Closing

(a) See Closing/Post Closing Process below.

(13) Specialist will continue to negotiate with servicer for a long-term modification 

of the client loan. 

(14) If first Underwriter is uncertain regarding eligibility, first Underwriter provides 

file to second Underwriter. If they concur that the client should not be approved, 

then the Specialist is notified. The Specialist informs the client and discusses all 

remaining options (including an out-of-home option if that was not the initial 

desired outcome). EXIT POINT #7.

(15) The entire HHF team (including the Administrator) meets as a committee to 

decide on the HHF application. If the committee decides to approve the client, 

then return to STEP 11. If the committee decides to deny the application, then the 

Specialist is notified, who then discusses all remaining options with client. EXIT 

POINT #9.

ii) Closing/Post Closing Process

(1) As noted above, HHF Underwriter will prepare loan documents and forward to 

Specialist for closing. Loan will be closed by Specialist. Instructions on where 

the client will send payments and future documentation will be provided and the 

client will be again be reminded of their responsibilities– these include a 

requirement to provide regular documentation (as IHCDA requires) to the 

Specialist (who will then upload the information into CounselorDirect for IHCDA 

staff) in order for payments to continue to be made. Loan documents recorded by 

Specialist and sent to Special Servicer. 

(2) Special Servicer sets the loan up in its system to allow borrower to make a 

payment electronically. Borrower will be paying a portion of the mortgage 

payment monthly to the servicer. 

(3) For the 1st month, IHCDA will make the entire mortgage payment for the 

borrower. After that, the borrower must make timely payment of their portion to 

the Special Servicer each month. Borrower portion of the monthly payment will 

be taken from borrower bank account through automatic withdrawal on the 

scheduled payment date. If there are insufficient funds in the account for this 

withdrawal, Special Servicer will attempt to notify borrower by a phone call. 

Borrower will have three business days from the day notified to bring the account 

up to the needed level. After the three business days, a second attempt will be 

made to retrieve the funds. If they are still insufficient, borrower will be removed 
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

15 Eligible Entity: Indiana Housing and Community Development Authority

from the program. Borrowers can be removed from the program for missing 

payments in two ways, (1) if they miss the scheduled payment three times 

throughout the life of the program or (2) if they miss the scheduled payment and 

second attempt during the same month.

(4) IHCDA pulls down HHF funds from Bank of New York-Mellon, matches with 

borrower contribution, then makes payment to the borrower’s servicer. 11

(5) Borrower gets a maximum of 12 or 18 months worth of assistance. The specific 

time period for each borrower will be communicated to the servicer. 

(6) The monthly process should continue until the borrower has fully drawn their 

assistance or been re-employed, whichever comes first (a re-employed borrower 

that has not fully drawn their assistance will still get up to 3 months of assistance 

after the start of re-employment).

(7) Once borrower has fully utilized assistance, borrower will not be making any 

further payments to the Special Servicer. Should the borrower sell, refinance, or 

be foreclosed upon, our Special Servicer will receive notice and notify IHCDA so 

that we are in position to receive repayment. IHCDA will also be responsible for 

filing mortgage releases once the loan is fully forgiven (in year 10).

3) Staffing and Business Partners

a) Eligible Entity

Under HHF Guidelines, an Eligible Entity must be (i) a regulated entity that is (ii) incorporated 

separately from state government itself, and (iii) having the corporate powers to receive HHF 

funds from The U.S. Department of Treasury (“Treasury”). For the reasons set forth below, 

IHCDA constitutes an Eligible Entity under the Guidelines.

First, IHCDA is a regulated entity. IHCDA is a “public body corporate and politic” established 

and regulated by the State of Indiana (Indiana Code 5-20-1-3). As a body corporate and politic 

and authority, IHCDA is subject to various regulatory provisions of state law, such as The Open 

Door Law (Indiana Code 5-14-1.5), The Access to Public Records Act (Indiana Code 5-14-3), 

and The Ethics and Conflicts of Interest Law (Indiana Code 4-2-6). 

Second, several other provisions of IHCDA’s enabling statute further confirm that IHCDA is not 

a part of state government itself. The powers of IHCDA are vested in a seven-person board, with 

the board delegating certain duties to the Executive Director and staff. (Indiana Code 5-20-1-3). 

Furthermore, IHCDA is not a constituent part of the state budget, as the general fund revenue of

the State of Indiana may not be used to pay all or part of the obligations of IHCDA. (Indiana 

Code 5-20-1-7). IHCDA is a self-supporting organization.

Finally, the third requirement is that the entity must have the corporate powers to receive HHF 

funds from Treasury. IHCDA has such powers, which include the authority to “to enter into 

agreements or other transactions with any federal, state, or local governmental agency for the 

purpose of providing adequate living quarters for such persons and families in cities and counties 

where a need has been found for such housing” (Indiana Code 5-20-1-4(a)(10)), the authority to 

“to make, execute, and effectuate any and all agreements or other documents with any 

 11 This may change depending on final arrangements with Treasury.
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

16 Eligible Entity: Indiana Housing and Community Development Authority

governmental agency or any person, corporation, association, partnership, limited liability 

company, or other organization or entity necessary or convenient to accomplish the purposes of 

this chapter” (Indiana Code 5-20-1-4(a)(16)), the authority to “to accept gifts, devises, bequests, 

grants, loans, appropriations, revenue sharing, other financing and assistance and any other aid 

from any source whatsoever and to agree to, and to comply with, conditions attached thereto” 

(Indiana Code 5-20-1-4(a)(17)), and the authority to “administer any program or money 

designated by the state or available from the federal government or other sources that is 

consistent with the authority's powers and duties” (Indiana Code 5-20-1-4(a)(34)).

Having met all the criteria set forth in the Guidelines, IHCDA qualifies and will be used as the 

Eligible Entity for the purpose of receiving the HHF Award from Treasury.

b) Timeline from Treasury Approval to Deployment of Capital

We will begin implementation activities immediately upon application submission in order to 

reduce time to implementation for HHF activities. With this early start and the presumption of a 

pilot program requirement by Treasury, we should be in a position to begin serving eligible 

borrowers throughout the state within six to nine months after approval of the program by the US 

Department of Treasury.

i) During the review period, IHCDA has:

(1) Drafted, circulated and reviewed responses from Requests for Proposals in the 

following areas (The numbers in our revised budget set forth the final negotiated 

compensation amounts in each of these areas:

(a) HHF-related eligibility screening and action planning: Through a competitive 

RFP process, IHCDA has selected 24 agencies to provide these services 

throughout the state; 

(b) Special Servicer: IHCDA has selected U.S. Bank, with which IHCDA already 

has established systems, to act as Special Servicer, although, IHCDA will 

approve and forward final payments to lenders at the recommendation of our 

Special Servicer. U.S. Bank is providing similar services for the established 

HHF program in Ohio; and

(c) External Monitor: This RFP solicited bids from firms qualified to act as 

External Monitor for Indiana’s HHF program. The External Monitor’s work 

will include file reviews, system reviews, and transaction tracing to confirm 

internal controls for both IHCDA and its partner agencies handling HHF 

dollars. IHCDA is currently working on the RFP and will make it available to 

prospective vendors no later than February 21, 2011.

(2) Developed the following documents:

(a) Standard note and mortgage for unemployment bridge program assistance;

(b) Detailed program guidelines for use by housing specialists, 

servicers/investors, and the Indiana HHF Special Servicer, including terms of 

assistance and repayment, procedures for deferring repayment in cases of 

continuing borrower hardship and procedures for forgiving debt in cases of 

severe negative equity;
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

17 Eligible Entity: Indiana Housing and Community Development Authority

(c) Detailed plan for marketing and customer outreach, which is currently in the 

implementation stage; and

(d) Position descriptions for contract positions to be hired by IHCDA for 

eligibility verification, grant administration and housing counseling 

management.

(3) Developed an online application and eligibility determination module for 

homeowners desiring assistance from Indiana HHF.

ii) IHCDA has also completed the following steps:

(1) Executed the HFA Participation Agreement with Treasury;

(2) Based on responses to the RFPs circulated during Treasury’s review of our plan,

committed awards to and enter into contracts with:

(a) Loan servicing companies; and 

(b) Agencies providing intake/triage, eligibility determination and client tracking.

(3) Developed web and phone content outlining HHF options and eligibility;

(4) Hired or contracted with project-specific IHCDA HHF staff;

(5) Formally notified banks and foreclosure prevention counseling agencies 

throughout the state that funds are available; and

(6) Options to learn more about or apply for HHF have gone live on IFPN’s website 

(877GETHOPE.ORG) and foreclosure prevention hotline (1-877-GET-HOPE).

iii) Finally, we will complete the following steps by the date on each item:

(1) Pilot phase will begin on or before March 1 2011.

(2) Test and refine the eligibility module and make if available to specialists and 

other outreach partners—on or before March 1 2011;

(3) Complete and test the application and verification modules made available by 

CounselorDirect or other vendors—on or before March 1 2011;

(4) Train HHF Intake Specialists on program guidelines, procedures and software—

on February 15 2011;

(5) Enter into agreements with lender/servicers and train lender/servicers on HHF 

programs and procedures—this is ongoing; 

c) Demonstration of capacity to implement HHF programs

i) IHCDA manages a range of programs designed to assist both individuals and 

communities to prevent foreclosure where possible and remedy the effects of 

foreclosure where necessary, including the following:

a) The Indiana Foreclosure Prevention Network: As discussed above, IHCDA is the 

manager of the IFPN and will work with our existing partners to reach out to 

prospective HHF beneficiaries and manage qualification, eligibility determination 

and continued verification, and progress against HHF action plans.

b) The National Foreclosure Mitigation Counseling (NFMC) Program: IHCDA has 

been awarded over $2.4 million through NFMC, including a Round IV award of 
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

18 Eligible Entity: Indiana Housing and Community Development Authority

over $1.5 million. NFMC has helped us to create and refine systems for client 

intake and counseling as well as for outreach to and negotiation with lenders. 

c) Indiana’s downpayment assistance programs: IHCDA manages downpayment 

assistance programs for a range of low to moderate income homebuyers. Key to 

our efforts in this regard is education for new homeowners to help them avoid the 

financial habits and practices that lead to foreclosure. 

d) Homelessness Prevention and Rapid Re-housing Program: IHCDA manages the 

Homelessness Prevention and Rapid Re-Housing Program (HPRP) funding for 

the balance of state Continuum of Care. IHCDA assessment tool for HPRP will 

incorporate screening for HHF eligibility for homeowners at risk of homelessness 

through foreclosure. HPRP administrators will be trained on eligibility 

requirements and screening for HHF. 

e) Neighborhood Stabilization Program: Finally, IHCDA is the entity charged with 

managing Indiana’s NSP allocation of $82 million. IHCDA is deploying NSP 

funds on two fronts:

i) The Market Stabilization Program provides downpayment assistance and 

funding to offset the cost of rehab for homebuyers purchasing a home that has 

been the subject of foreclosure; and

ii) The Comprehensive Neighborhood Revitalization Fund provides development 

subsidy for projects that help nonprofit organizations combat and forestall the 

effects of foreclosure on their neighborhoods. 

ii) Program management: In order to effectively manage the program, IHCDA will 

deploy the expertise of its management team while securing needed support from 

outside contractors, as follows:

(1) IHCDA internal team leaders

(a) Sherry Seiwert: In early 2005, Governor Mitch Daniels appointed Sherry Seiwert 

as Executive Director of the Indiana Housing and Community Development 

Authority (IHCDA). Since then, Ms. Seiwert has made outstanding contributions 

to Indiana’s communities through her work and service. 

Sherry is an Indiana University Hoosier Fellow, as well as a board member of the 

Indianapolis Local Initiatives Support Corporation (LISC) and the Economic Club 

of Indianapolis, President of her neighborhood association, and Secretary of the 

Indianapolis/Marion County Plat Committee. In 2005, her very first year as 

Executive Director of IHCDA, Ms. Seiwert led the agency in the creation of a

four-year strategic plan for Indiana’s housing and community development, and 

obtained the Governor’s approval of Indiana’s ten-year plan to end chronic 

homelessness, all while managing IHCDA’s continued efforts in rehabilitation 

and new construction of affordable housing, which created more than 1,100 jobs 

and over $100 million in local income and wages. Moreover, she worked with the 

Indiana General Assembly to expand the scope and scale of the state’s housing 
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

19 Eligible Entity: Indiana Housing and Community Development Authority

finance agency, while consolidating housing and community development 

programs formerly fragmented across a host of state agencies (such as the 

Housing Choice Voucher program, formerly part of Indiana’s social service 

agency) into the new Indiana Housing and Community Development Authority. 

Since then, Sherry’s leadership has helped IHCDA to:

(i) Secure a dedicated revenue source for the Indiana Affordable Housing and 

Community Development Fund, which supports a host of community 

development and affordable housing efforts throughout the state;

(ii) Embrace a leadership role in Indiana’s efforts to link housing with services 

and build permanent supportive housing developments in order to meet the 

specific needs of each of the most difficult-to-serve homeless populations in 

the state; and

(iii)Re-design IHCDA’s funding processes, moving from the administration of 

different funding sources to the pursuit of housing solutions.

Sherry is committed to creating partnerships to better leverage resources. In 

recent years, Sherry has fostered partnerships with:

(i) The Indiana Department of Corrections to create a program to provide rental 

assistance to ex-offenders; 

(ii) The Indiana Family and Social Service Administration’s Division of Aging to 

establish a program that would allow seniors to transition from nursing homes 

to a more independent living situation in the community of their choice; and 

(iii)The Indiana Office of Community and Rural Affairs and Indiana Office of 

Tourism to establish the Real Estate Capital Access Program (RECAP) to 

redevelop and revitalize main streets through a combination of façade 

renovation, predevelopment capital, and flexible project financing. 

As head of the agency responsible for implementing several ARRA programs, 

including Housing Tax Credit Monetization/TCAP, ARRA Weatherization 

Assistance, and Community Service Block Grant supplemental allocations, Sherry 

has leveraged those one-time infusions of capital into long-term change that will 

improve the lives of Hoosiers for years to come. For example, our work with 

ARRA Weatherization Assistance Program dollars has resulted in systems that 

allow IHCDA to pursue an agency-wide strategic focus on preserving the longterm viability of Indiana’s affordable housing stock. 

(b) Mark Young, Chief Operating Officer, oversees the Section 42 Tax Credit and 

Bond Allocation, Multi-family Compliance, Community Development and 

Community Services Departments. He plays a key role in creating many 

policies and procedures at IHCDA to administer over $700 million in 

affordable housing funding annually. Prior to becoming the Chief Operations 

Officer in 2006, Mr. Young held various positions at IHCDA including the 

Housing and Community Development Manager, Rental Housing Compliance 

Manager, Assistant Compliance Manager, and Compliance Specialist. Before 

joining IHCDA in 1998, Mr. Young was a Comprehensive Planner and a 
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

20 Eligible Entity: Indiana Housing and Community Development Authority

Project Coordinator at the Department of Metropolitan Development for the 

City of Indianapolis. Mr. Young also holds a Real Estate license and has 15 

years experience in property development. Born in Indianapolis, Mr. Young 

attended Ball State University where he received a B.S. in Biology and an 

M.S. in Urban and Regional Planning.

(c) Blake Blanch, Chief Financial Officer, oversees all financial operations of the 

Authority. Mr. Blanch joined the Authority in July 1996. He holds a 

Bachelors of Science Degree in Accounting from Ball State University, a J.D. 

from Indiana University School of Law - Indianapolis, and a Masters in 

Business Administration from the Kelley School of Business, Indiana 

University - Indianapolis. Before moving into his current role, Mr. Blanch 

had worked in the Finance, Single Family, and Accounting departments of the 

Authority. Mr. Blanch is responsible for all debt management of the 

Authority including new issues. 

(d) A. Isaac Levy, Controller, is in charge of the Accounting Department of nine 

employees, and has worked at IHCDA since October 2005. He previously 

worked as Director of Finance at Hook’s Discovery and Learning Center for 

two years and as Associate Dean of Research and Sponsored Programs at the 

Indianapolis campus of Indiana University for seventeen years. Before that, 

he worked at the City of Indianapolis, Blue Cross/Blue Shield and Amax Coal 

Company. Mr. Levy holds a Bachelor’s degree in Accounting and a JD in 

Law, both from Indiana University, and is a Certified Public Accountant.

(e) Mark Wuellner, General Counsel, joined the Authority in January 2010. He 

holds a J.D. from Cornell Law School and a Bachelors of Science in Spanish 

and Business Studies from Butler University. Before joining IHCDA, Mr. 

Wuellner worked with the Authority in his capacity as a corporate law 

practitioner at Bose McKinney & Evans LLP, an Indianapolis law firm. Mr. 

Wuellner serves as chief legal counsel for the Authority, is responsible for 

supervising outside counsel relationships, and manages the Authority’s legal 

department and human resources department.

(f) David Kaufmann joined the Authority in 2005 and has over twelve years of 

experience in community development and asset preservation. As Chief 

Strategy Officer, Mr. Kaufmann leads a team responsible for orchestrating the 

business development, governmental affairs, communication, and research 

functions of IHCDA. The agency’s asset development and asset preservation 

strategies fall under this purview. Mr. Kaufmann holds a Masters in Public 

Affairs degree from Indiana University’s School of Public and Environmental 

Affairs and has worked with the Center on Philanthropy at Indiana University.
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

21 Eligible Entity: Indiana Housing and Community Development Authority

(g) Stephanie Reeve, Director of Asset Preservation, oversees the IFPN, the 

Indiana Hardest Hit Fund and the Mortgage Foreclosure Trial Court 

Assistance Project (an IHCDA-funded program in partnership with the 

Indiana Supreme Court). Prior to taking the reins of the IFPN in fall of 2009, 

Stephanie served as IHCDA’s Legislative Liaison where she was 

instrumental in creating legislation passed in Indiana’s General Assembly that 

resulted in the state’s first Affordable Housing Trust Fund and the state’s first 

comprehensive foreclosure prevention program. Stephanie received her 

Bachelor’s degree in Public Affairs from Indiana University and is completing 

her Master’s degree in Public Affairs at IU as well. She has worked in the 

public sector for nearly nine years in various legislative and policy roles.

(2) Short-Term Staff: In order to facilitate our efforts, we also have made or 

anticipate the following new hires, which will be IHCDA permanent positions for 

the duration of the HHF program:

(a) Operations Manager (1.0 FTE), who will facilitate communication among the 

various parties and ensure that transactions are proceeding in a timely fashion.

(b) Underwriters (3.0 FTE), who will underwrite individual HHF loans and assist 

Foreclosure Prevention Counselors with determination of eligibility.

(c) Accounting Specialists (2.5 FTE), who will manage the flow of HHF funds to 

and from IHCDA.

(d) Servicer Liaison (1.0 FTE), who will manage relationships with loan servicers 

and serve as primary contact with our Special Servicer;

(e) Project Coordinator (0.5 FTE), who will track transactions and help to enforce 

deadlines and accountability mechanisms. 

(3) Contractors: Finally, IHCDA is contracting with the following independent 

consultants for at least the next year, with the prospect of renewal:

(a) Liaison with the Indiana Office of Faith-Based and Community Initiatives 

(OFBCI) (1.0 FTE), who will work with OFBCI and faith-based organizations 

to manage our voluntary service offerings (75%) and coordinate education and 

outreach activities regarding Fair Housing in cooperation with the Indiana 

Civil Rights Commission (25%); note that Fair Housing activities will NOT 

be paid from HHF dollars.

(b) Contract Attorney (1.0 FTE), who will work with our General Counsel and 

Director of Asset Preservation to address legal issues relating to HHF;

(c) Monitors (2.0 FTE), who will ensure compliance with all applicable law and 

regulation by IHCDA, servicers and other partners.

d) Expenditure information

i) Administrative Expenses: IHCDA anticipates using approximately 17.61% of the 

$221.7 million award towards administrative expenses of IHCDA and foreclosure 

prevention agencies:
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

22 Eligible Entity: Indiana Housing and Community Development Authority

(1) $9,154,310 (about 4.13% of our total award) will cover IHCDA Operational 

Costs, including but not limited to the cost of staff time, professional services, and 

information technology;

(2) $2,619,477 (about 1.18% of our total award) will cover transaction-related 

expenses, including but not limited to title searches, recording and wire transfer 

fees and loan servicing costs;

(3) $175,000 (about 0.08% of our total award) will be used for outreach efforts;

(4) $27,092,800 (about 12.22% of our total award) will cover individual services 

directly related to HHF, including eligibility determination, development of an 

HHF action plan, and ongoing monitoring to confirm progress against that plan.

Administrative Expenses by Year

Category Year 1 Year 2 Year 3 TOTAL

IHCDA Operational Costs $3,440,770 $2,856,770 $2,856,770 $9,154,310

Transaction Related Expenses $1,309,739 $654,869 $654,859 $2,619,477

Outreach Efforts $100,000 $50,000 $25,000 $175,000 

HHF Plan Expenses $13,546,400 $6,773,200 $6,773,200 $27,092,800

TOTALS $18,396,909 $10,334,839 $10,309,839 $39,041,587 

ii) Program Expenses: IHCDA plans to devote more than 82% of its total allocation to 

program expenses, as follows:

Program Expenses by Year

Partial Payment Assistance Year 1 Year 2 Year 3 TOTAL

Number Assisted 8,123 4,084 4,050 16,257

Amount $91,261,905 $45,883,740 $45,506,907 $182,652,552

iii) Total Expenses: Thus, our total expenses by year are anticipated to be as follows:

Total Expenses by Year

Category Year 1 Year 2 Year 3 TOTAL

Administrative Expenses $18,396,909 $10,334,839 $10,309,839 $39,041,587 

Program Expenses $91,261,905 $45,883,740 $45,506,907 $182,652,552

TOTALS $107,632,759 $57,043,190 $57,018,190 $221,694,139

e) Compliance Infrastructure

IHCDA will commit to comply with all requirements under EESA and related law and 

regulation. We will facilitate compliance oversight, internal controls and fraud prevention 

through a variety of internal and external means. IHCDA currently manages a range of financial 

instruments and funding sources according to established and proven policies and procedures. 

Our HHF procedures will be developed on the basis of these successful models, with appropriate 

adjustments for the specific laws and regulations governing the program. IHCDA’s internal 

audit functions will be expanded to include the review of internal and partner program activities 

under HHF.
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

23 Eligible Entity: Indiana Housing and Community Development Authority

i) Audit and Internal Controls

Independent CPA auditors annually perform single audits for IHCDA and its nonprofit 

subsidiary, the Indiana Equity Fund. Additionally, Indiana’s Office of Budget and Management 

has provided extensive and in-depth materials for state agencies in receipt of funds made 

available through the American Recovery and Reinvestment Act of 2009 or related sources. 

IHCDA’s internal audit staff will take the following steps to confirm the effectiveness of those 

measures:

(1) Evaluate policies, procedures and internal controls for compliance with program 

requirements;

(2) Test processes for controls being in place and operating before program start-up 

and during its operation;

(3) Evaluate program process compliance with applicable U.S. Office of 

Management and Budget (OMB) Circulars A-87, A-102, A-133, and Addendum 

#1 to the Compliance Supplement;

(4) Determine if any entity within the program is a subgrantee as defined in 

applicable law and regulation and plan internal control features for its processes; 

and

(5) Establish the financial reporting systems for Indiana HHF activities within 

IHCDA’s existing financial reporting system.

ii) Fraud Risk Mitigation

IHCDA’s external auditors will carry out the following steps for Indiana HHF:

(1) Review internal controls and fraud prevention mechanisms and detect weaknesses 

that could result in fraud, waste, abuse or loss of funds;

(2) Recommend process improvements and any necessary compensating controls;

(3) Confirm that key control points have been assigned to specific staff members who 

are accountable and responsible to a senior manager; and

(4) Evaluate program compliance with ethics requirements and investigate complaints 

of alleged fraud, waste or abuse in conjunction with IHCDA’s General Counsel.

iii) Reporting Protocols

IHCDA will track expenses associated with HHF in a manner consistent with its existing 

practices for tracking administrative costs for other federally funded programs. These processes 

are consistent with the cost principles outlined in OMB Circular A-87. We will fully comply 

with tracking and reporting requirements provided by Treasury. Additionally, program 

participants will be expected to provide authorizations to release information allowing IHCDA to 

track outcomes on a file by file basis. Participating servicers/lenders will be required to provide 

ongoing reports on assisted borrowers’ payment histories both during and after receipt of HHF 

assistance. 

In management of all major federal funding sources, IHCDA maintains compliance with all 

applicable requirements as described in OMB Circular A-133. Accordingly, IHCDA establishes 
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011 

24 Eligible Entity: Indiana Housing and Community Development Authority 

and maintains effective internal control over compliance with the requirements of laws, 

regulations, contracts and grants applicable to federal programs, including but not limited to: 

HOME Investment Partnership Program, Community Development Block Grant, Section 8 

Housing Assistance Program, and the National Foreclosure Mitigation Counseling (NFMC) 

Program.

iv) Systems Infrastructure and Necessary Funding 

IHCDA will implement a secure, web-based client management system to provide client level 

information in real time. CounselorDirect will be used to develop an online system for IHCDA 

and foreclosure prevention agency personnel covering intake, screening and confirming 

applicant eligibility for funds. CounselorDirect will also serve as our tracking mechanism for 

available funds, and will facilitate submissions to servicers by foreclosure prevention agencies. 

v) Implementation Mechanisms

Prior to program implementation, IHCDA will provide extensive training to housing counselors 

and internal staff regarding policies and procedures to be followed, with a detailed program 

manual made available to all trainees. As part of its outreach and communications efforts, 

IHCDA will work with IFPN members and partners (including the Indiana Attorney General’s 

Office) to conduct outreach to Indiana homeowners before, during and after program 

implementation to ensure homeowners receive accurate information and do not fall victim to 

foreclosure rescue scams. 

4) Conclusion 

The Indiana Housing and Community Development Authority appreciates the opportunity to 

provide this proposal for deployment of $221.7 million in Hardest Hit Fund dollars from the U.S. 

Department of Treasury. We believe that our proposal is in compliance with program 

requirements while remaining responsive to the unique needs and values of Indiana. 

Questions so directed will be forwarded as appropriate and necessary to other staff within 

IHCDA. Thank you once again for this opportunity.
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

25 Eligible Entity: Indiana Housing and Community Development Authority

SCHEDULE A

Indiana Hardest Hit Fund Unemployment Bridge Program

Allowable Administrative Expenses

Indiana

One-time / Start-Up Expenses:

Initial Personnel

Building, Equipment, Technology $89,000

Space build out ($75,000) plus initial MIS requirements 

($2,000 per FTE) for seven (7) FTEs

Professional Services $120,000 Readiness Audit and Training plus 6 months of PM/TAC

Supplies / Miscellaneous $10,000

Marketing /Communications $175,000

Travel $10,000

Website development/Translation $175,000 Website update and CounselorDirect Purchase

Contingency $5,000

Subtotal $584,000

Operating / Administrative Expenses:

Salaries $350,000

1.75 FTE: HHF Manager (1.0) and Customer Liaison 

(0.5), plus time of other staff devoted to project (0.25 

total)—CFO, General Counsel, Chief Strategy Officer, 

Controller, Policy & Research Manager

Professional Services (Legal, 

Compliance, Audit, Monitoring) $2,192,000

12 FTE: Operations Manager, 3 underwriters, 2.5 

accountants, servicer liaison, project coordinator (0.5), 2 

monitors, attorney plus OFBCI Liaison. Also $60,000 

for consulting services related to database, PR, 

background checks, and media activities

Travel $87,000

Buildings, Leases & Equipment $71,550 1,500 SF at $15.90/sf for three years

Information Technology & 

Communications $2,500,000 CounselorDirect, HHF Website/Hotline

Indiana Office of Faith-Based and 

Community Initiatives $2,794,350

OFBCI will provide assistance in establishing and 

managing a voluntary service option for HHF 

beneficiaries. This represents the cost of OFBCI 

services plus the purchase and set-up of volunteer 

management software statewide.

Office Supplies/Postage and 

Delivery/Subscriptions $25,000

Risk Management/ Insurance $25,410

General Liability, Theft, Errors/Omissions and All-risks 

incremental cost for all FTEs

Training $150,000 $50,000 per year for three years

Marketing/PR $375,000

Subtotal $8,570,310
Indiana Hardest Hit Fund Proposal September 1 2010; Revised February 14 2011

26 Eligible Entity: Indiana Housing and Community Development Authority

Transaction Related Expenses:

Recording Fees $487,710 At $30 per recording x 16,257 transactions

Wire Transfer Fees $156,067

At $.30 per ACH x 32 ACH per client (first and one 

subordinate lienholder) x 16,257 clients

Automated Valuation Model $350,000

To provide initial value estimations to confirm alignment 

with LTV standards

Loan Servicing $1,625,700 $100 per client served—one time servicing fee

Intake and Processing Expenses (Assuming a total of 16,257 clients enrolled for HHF)

Outreach $175,000

File Intake and Triage Counseling $4,000,000

$50 per file (assume 80,000 applicants) - only if 

CounselorDirect determines HHF eligibility

Decision Costs $18,000,000 $400 per file for 45,000 applicants

Successful File $4,877,100 $300 per file for 16,257 clients

Key Business Partners On-Going $215,700 Consulting services as needed

Subtotal $27,092,800

Grand Total $39,041,587

% of Total Award 17.61%

Award Amount $221,694,139