Twelfth Amendment to HPA — California

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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 (the “Twelfth 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, as previously amended by that certain First Amendment to Commitment to 

Purchase Financial Instrument and HFA Participation Agreement (the “First Amendment”), as 

further amended by that certain Second Amendment to Commitment to Purchase Financial 

instrument and HFA Participation Agreement (the “Second Amendment”), as further amended 

by that certain Third Amendment to Commitment to Purchase Financial Instrument and HFA 

Participation Agreement (the “Third Amendment”), as further amended by that certain Fourth 

Amendment to Commitment to Purchase Financial Instrument and HFA Participation Agreement 

(the “Fourth Amendment”), as further amended by that certain Fifth Amendment to Commitment 

to Purchase Financial Instrument and HFA Participation Agreement (the “Fifth Amendment”), as 

further amended by that certain Sixth Amendment to Commitment to Purchase Financial 

Instrument and HFA Participation Agreement (the “Sixth Amendment”), as further amended by 

that certain Seventh Amendment to Commitment to Purchase Financial Instrument and HFA 

Participation Agreement (the “Seventh Amendment”), as further amended by that certain Eighth 

Amendment to Commitment to Purchase Financial Instrument and HFA Participation Agreement 

(the “Eighth Amendment”), as further amended by that certain Ninth Amendment to 

Commitment to Purchase Financial Instrument and HFA Participation Agreement (the “Ninth

Amendment”), and as further amended by that certain Tenth Amendment to Commitment to 

Purchase Financial Instrument and HFA Participation Agreement (the “Tenth Amendment”), and 

as further amended by that certain Eleventh Amendment to Commitment to Purchase Financial 

Instrument and HFA Participation Agreement (the “Eleventh Amendment”; and together with 

the Original HPA as amended thereby, by the First Amendment, Second Amendment, Third 

Amendment, Fourth Amendment, Fifth Amendment, Sixth Amendment, Seventh Amendment, 

Eighth Amendment, Ninth Amendment and Tenth Amendment to the “Current HPA”), dated as 

of their respective dates as set forth on Schedule A attached hereto, 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 (P.L. 110-343), as amended, as the same may be 

amended from time to time (“EESA”);
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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 Twelfth 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 Twelfth 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 

Twelfth Amendment. All references herein to the “HPA” shall mean the Current HPA, as 

further amended by this Twelfth Amendment.

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

and replaced with Schedule A attached to this Twelfth 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 Twelfth 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 Twelfth 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.
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(2) Eligible Entity has the full corporate power and authority to enter into, execute, 

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

Treasury in connection with this Twelfth 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 

Twelfth Amendment and any other closing documentation delivered to Treasury in 

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

thereunder.

3. Miscellaneous

A. The recitals set forth at the beginning of this Twelfth 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 

prohibition or unenforceability in any jurisdiction shall invalidate such provision in any other 

jurisdiction.

D. This Twelfth 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 Twelfth Amendment shall be treated as originals for all purposes.

[SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE

INTENTIONALLY LEFT BLANK]
[Signature Page to Twelfth Amendment to HPA — California]

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

hereby execute and deliver this Twelfth Amendment to Commitment to Purchase Financial 

Instrument and HFA Participation Agreement as of the Amendment Date.

HFA: TREASURY:

CALIFORNIA HOUSING FINANCE 

AGENCY

UNITED STATES DEPARTMENT OF THE 

TREASURY

By: /s/ Claudia Cappio By:

Name: Claudia Cappio Name: Timothy J. Bowler

Title: Executive Director Title: Acting Assistant Secretary for 

Financial Stability

ELIGIBLE ENTITY:

CALHFA MORTGAGE ASSISTANCE 

CORPORATION

By: /s/ Diane Richardson

Name: Diane Richardson

Title: President
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EXHIBITS AND SCHEDULES

Schedule A Basic Information

Schedule B Service Schedules

Schedule C Permitted Expenses

SCHEDULE A

BASIC INFORMATION

Eligible Entity Information:

Name of the Eligible Entity: CalHFA Mortgage Assistance 

Corporation

Corporate or other organizational form: Nonprofit Public Benefit Corporation

Jurisdiction of organization: California

Notice Information:

HFA Information:

Name of HFA: California Housing Finance Agency

Organizational form: Agency of the State of California

Date of Application: April 16, 2010

Date of Action Plan: September 1, 2010

Notice Information:

Program Participation Cap: $1,975,334,096.00

Portion of Program Participation Cap

Representing Original HHF Funds: $ 699,600,000.00

Portion of Program Participation Cap 

Representing Unemployment HHF Funds: $ 476,257,070.00

Permitted Expenses: $ 148,150,057.20

Closing Date: June 23, 2010

First Amendment Date: September 23, 2010
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Second Amendment Date: September 29, 2010

Third Amendment Date: December 16, 2010

Fourth Amendment Date: March 31, 2011

Fifth Amendment Date: August 3, 2011

Sixth Amendment Date: October 28, 2011

Seventh Amendment Date: May 3, 2012

Eighth Amendment Date: July 17, 2012

Ninth Amendment Date: December 14, 2012

Tenth Amendment Date: June 6, 2013

Eleventh Amendment Date: September 20, 2013

Twelfth Amendment Date: February 27, 2014

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.
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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

California Housing Finance Agency Mortgage Assistance Corporation (“CalHFA MAC”)

UNEMPLOYMENT MORTGAGE ASSISTANCE PROGRAM

Summary Guidelines

1. Program Overview The Unemployment Mortgage Assistance Program (“UMA”) is one of 

CalHFA MAC’s federally-funded programs developed to provide temporary 

financial assistance to eligible California homeowners who wish to remain 

in their homes, but have suffered a loss of income due to unemployment 

or underemployment.

CalHFA MAC is partnering with financial institutions to directly provide 

program funds to subsidize an eligible homeowner’s mortgage payments.

UMA provides mortgage payment assistance equal to the lesser of $3,000 

per month or 100% of the PITI (principal, interest, tax, insurance) and any 

escrowed homeowner’s association dues or assessments, for up to twelve 

(12) months, with the purpose of preventing avoidable foreclosures until 

such time that the homeowner retains employment sufficient to meet the 

demands of satisfying their regular mortgage payment. 

2. Program Goals UMA’s goal is to help homeowners remain in their homes and prevent 

avoidable foreclosures despite loss of income due to unemployment or 

underemployment.

The UMA will minimize past due payments, and provide a homeowner 

with additional time to find alternate employment and replace income 

needed to make their mortgage payment.

UMA was designed to assist homeowners who are currently receiving 

California Employment Development Department unemployment benefits, 

and includes homeowners whose unemployment benefits lapsed or 

expired within 30 days of the request for UMA assistance. 

UMA was designed to complement other loss mitigation programs, 

including increasing a homeowner’s eligibility for an extended written 

forbearance plan and/or loan modification.

3. Target Population / 

Areas

UMA is designed to target low-to-moderate income homeowners and 

address the needs of a homeowner’s specific situation in lieu of targeting 

certain regions or counties.

4. Program Allocation 

(Excluding 

Administrative 

Expenses)

$715,595,915.28
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5. Borrower Eligibility 

Criteria

• Homeowner qualifies as low-to-moderate income based on perhousehold income thresholds set forth in the county in which the 

homeowner resides. Income thresholds are as posted on the Keep 

Your Home California website.

• Homeowner must complete and sign a Hardship Affidavit / 3rd 

Party Authorization to document the reason for the hardship.

• Homeowners who have recently encountered a financial hardship 

due to underemployment or unemployment, including those 

whose unemployment hardship is related to their military service. 

• Homeowner’s total monthly first-lien mortgage payment PITI 

(principal, interest, taxes, and insurance, as applicable) and 

escrowed association fees must exceed 31 percent of the 

homeowner’s gross monthly household income, excluding 

unemployment benefits. 

• Homeowner must agree to provide all necessary documentation to 

satisfy program guidelines established by CalHFA MAC.

• Homeowner must be currently receiving California Employment 

Development Department unemployment benefits, and includes 

homeowners whose unemployment benefits lapsed or expired 

within 30 days of the request for UMA assistance.

• General program eligibility is determined by CalHFA MAC, the 

housing counselor or servicer based on information received from 

the homeowner. Program-specific eligibility is determined by 

CalHFA MAC on a first-come, first-approved basis until program 

funds and funding reserves have been exhausted. Loan servicer 

will implement the HHF program based on participation 

agreement terms and conditions.

• Funding allocation will be tracked, monitored and performed by 

CalHFA MAC in a centralized processing operation.

6. Property / Loan 

Eligibility Criteria

• Current, unpaid principal balance (“UPB”) (includes the interestbearing unpaid principal balance and any existing non-interest 

bearing forbearance balance) of the first-lien mortgage loan is not 

greater than $729,750. 

• The property securing the mortgage loan must not be abandoned, 

vacant or condemned.

• The applicant must own and occupy the single family, 1-4 unit 

home (an attached or detached house or a condominium unit) 

located in California and it must be their primary residence. 

Mobile homes are eligible if they are permanently affixed to the 

real property that is secured by the first lien.

7. Program Exclusions • A Notice of Default (“NOD”) has been recorded on the subject 

property more than 60 days prior to the date of request for UMA 

assistance. 

• Homeowner in an “active” bankruptcy is ineligible for program 

assistance consideration. Homeowners who have previously filed 

bankruptcy are eligible for consideration with proof of court order 

“Dismissal” or “Discharge”. 
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• Homeowner’s “hardship” is a result of voluntary resignation of 

employment.

• Homeowner in an active HAMP trial modification is not eligible for 

UMA consideration unless the trial is cancelled.

• Homeowner becomes fully employed at any time during the UMA 

benefit period. 

• Homeowner is actively being reviewed for TAP benefits.

• Property is subject to a first priority lien securing a Home Equity 

Line of Credit (“HELOC”).

8. Structure of 

Assistance

CalHFA MAC will structure the assistance as a non-recourse, non-interest 

bearing subordinate loan in favor of the Eligible Entity (CalHFA MAC) 

secured by a junior lien recorded against the property in the amount of the 

total reduced PITI and any escrowed homeowner’s association dues or 

assessments, and equal to the total amount of HHF unemployment 

assistance. At the conclusion of (3) three years, the subordinate loan will 

be released. Loan funds will only be repaid to Eligible Entity (CalHFA MAC) 

in the event of a sale or a refinance that includes cash out with sufficient 

net equity proceeds prior to forgiveness. Recovered funds will be recycled 

in order to provide additional program assistance until December 31, 

2017, at which time any recovered funds will be returned to Treasury.

After December 31, 2017, any remaining or returned funds will be 

returned to Treasury.

9. Per Household 

Assistance

Up to $36,000 per household in total (average funding of $17,367.95), 

equaling the lesser of $3,000 per month or 100% of PITI and any escrowed 

homeowner’s association dues or assessments (and in all cases, subject to 

the HHF program maximum benefit cap of $100,000 with respect to 

monies previously received under other HHF programs, if any).

10. Duration of 

Assistance

Homeowner participation in UMA is limited to twelve (12) months 

maximum.

11. Estimated Number 

of Participating 

Households

Approximately 41,202. This figure is based on loans with unpaid principal 

balances ranging from $200,000 to $400,000 with an average funding of 

$17,367.95.

12. Program Inception 

/Duration

The statewide launch of UMA was January 10, 2011 and it will continue up 

to five (5) years or until funding is fully reserved. 

13. Program 

Interactions with 

Other 

HFA/Programs 

UMA will serve as a gateway to homeowner programs aimed at 

reinstatement and principal reduction, as permitted by program 

guidelines. 

14. Program 

Interactions with 

HAMP

This benefit may precede or extend HAMP, including HAMP UP, for 

temporary unemployment assistance which when combined may provide 

assistance for more than one year. HAMP UP currently offers a minimum 

of twelve months’ forbearance for some homeowners.

15. Program Leverage 

with Other Financial 

Upon completion of all UMA benefit assistance payments and based on 

homeowner need, the servicer agrees to consider an extension of 

unemployment forbearance plan (such as HAMP UP or other proprietary 
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Resources program) or other foreclosure prevention program, as applicable and per 

investor guidelines.

CalHFA MAC will request that the loan servicer waive fees (e.g., NSF and 

late charges). 

16. Qualify as an 

Unemployment 

Program

 Yes  No
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SCHEDULE B-2

California Housing Finance Agency Mortgage Assistance Corporation (“CalHFA MAC”)

MORTGAGE REINSTATEMENT ASSISTANCE PROGRAM

Summary Guidelines

1. Program Overview The Mortgage Reinstatement Assistance Program (“MRAP”) is one of 

CalHFA MAC’s federally-funded programs developed to provide 

temporary financial assistance to eligible homeowners who wish to 

remain in their homes, but are in imminent danger of losing their home to 

foreclosure.

MRAP provides funds to assist income-qualified homeowners to help 

them cure their delinquent first mortgage loan arrearages, which may 

also include payments needed to reinstate their loans from foreclosure.

2. Program Goals The MRAP will prevent avoidable foreclosures by helping homeowners 

reinstate their past due first mortgage loans.

MRAP will also mitigate the need for large reinstatement dollars to be 

capitalized with remaining loan balance, and thus, broaden the 

population of homeowners who qualify for modification.

3. Target Population / 

Areas

MRAP is designed to target low-to-moderate income homeowners and 

address the needs of a homeowner’s specific situation in lieu of targeting 

certain regions or counties.

4. Program Allocation 

(Excluding 

Administrative 

Expenses)

$165,900,000.00

5. Borrower Eligibility 

Criteria

• Homeowner qualifies as low-to-moderate income based on perhousehold income thresholds set forth in the county in which the 

homeowner resides. Income thresholds are as posted on the Keep 

Your Home California website.

• Homeowner must complete and sign a Hardship Affidavit / 3rd Party 

Authorization to document the reason for the hardship.

• Homeowners who have recently encountered a financial hardship 

due to their military service are eligible.

• Homeowner has adequate income to sustain reinstated first- lien 

mortgage loan, per CalHFA MAC approved investor guidelines.

• Homeowner must agree to provide all necessary documentation to 

satisfy program guidelines established by CalHFA MAC.

• Mortgage loan is delinquent as substantiated by homeowner’s 

hardship documentation. The delinquency and the total amount 

required to cure the delinquency is verified with the servicer. Loans in 

foreclosure are eligible.
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• The homeowner’s first-lien PITI, and any escrowed homeowner’s 

association dues or assessments, payment must be a maximum of 

38% of the gross household income excluding temporary income 

(e.g., unemployment or short-term disability benefits) to meet the 

definition of an affordable payment. Reinstatement assistance may 

be combined with a loan modification (that meets the CalHFA MAC

modification and program guidelines) in order to achieve the 

definition of an affordable payment.

• On a case by case basis, CalHFA MAC reserves the right to review and 

approve investor program guidelines that utilize affordable mortgage 

definitions greater than 38%. 

• General program eligibility is determined by CalHFA MAC, the housing 

counselor or servicer based on information received from the 

homeowner. Program-specific eligibility is determined by CalHFA 

MAC on a first-come, first-approved basis until program funds and 

funding reserves have been exhausted. Loan servicer will implement 

the HHF program based on participation agreement terms and 

conditions.

• Funding allocation will be tracked, monitored and performed by 

CalHFA MAC in a centralized processing operation.

6. Property / Loan 

Eligibility Criteria

• Current, unpaid principal balance (“UPB”) (includes the interestbearing unpaid principal balance and any existing non-interest 

bearing forbearance balance) of the first-lien mortgage loan is not 

greater than $729,750.

• The property securing the mortgage loan must not be 

abandoned, vacant or condemned.

• The applicant must own and occupy the single family, 1-4 unit 

home (an attached or detached house or a condominium unit) 

located in California and it must be their primary residence. 

Mobile homes are eligible if they are permanently affixed to the 

real property that is secured by the first lien.

7. Program Exclusions • Homeowner in an “active” bankruptcy is ineligible for MRAP 

assistance consideration. Homeowners who have previously filed 

bankruptcy are eligible for consideration with proof of court 

order “Dismissal” or “Discharge”. 

• MRAP benefit assistance request for reinstatement with a firstlien PITI and any escrowed homeowner’s association dues or 

assessments, payment of greater than 38% of the homeowner’s 

gross monthly household income, excluding temporary income 

(e.g., unemployment or short-term disability benefits) will be 

considered unaffordable and is excluded from MRAP 

reinstatement benefit assistance unless that assistance is 

combined with a loan modification (that meets CalHFA MAC

modification and program guidelines). 

• Loan is less than two (2) payments past due as of the date of 

request for assistance.

• Property is subject to a first priority lien securing a Home Equity 
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Line of Credit (“HELOC”).

8. Structure of 

Assistance

CalHFA MAC will structure the assistance as a non-recourse, non-interest 

bearing subordinate loan in favor of the Eligible Entity (CalHFA MAC) 

secured by a junior lien recorded against the property in the amount of 

the HHF assistance. At the conclusion of (3) three years, the subordinate 

loan will be released. Loan funds will only be repaid to Eligible Entity 

(CalHFA MAC) in the event of a sale or a refinance that includes cash out 

with sufficient net equity proceeds prior to forgiveness. Recovered funds 

will be recycled in order to provide additional program assistance until 

December 31, 2017, at which time any recovered funds will be returned 

to Treasury.

After December 31, 2017, any remaining or returned funds will be 

returned to Treasury.

9. Per Household 

Assistance

Up to $25,000 per household in total (average funding of $18,052.46) for 

PITI and any escrowed homeowner’s association dues or assessments, 

arrearages (and in all cases, subject to the HHF program maximum 

benefit cap of $100,000 with respect to monies previously received under 

other HHF programs, if any).

10. Duration of 

Assistance

Available on a one-time only basis, per household.

11. Estimated Number 

of Participating 

Households

Approximately 9,190. This figure is based on loans with unpaid principal 

balances ranging from $200,000 to $400,000 with an average funding of 

$18,052.46. 

12. Program Inception / 

Duration

The statewide launch of MRAP was February 7, 2011 and it will continue 

up to five (5) years or until funding is fully reserved.

13. Program Interactions 

with Other HFA 

Programs

MRAP will serve as a gateway to other loss mitigation programs, including 

loan modification which may include principal reduction, including other 

HHF programs and the Principal Reduction Program.

14. Program Interactions 

with HAMP

MRAP will serve as a gateway to HAMP which may include principal 

reduction of homeowner’s mortgage. 

15. Program Leverage 

with Other Financial 

Resources

CalHFA MAC will require that the servicer waive all accrued and unpaid 

late charges and NSF fees for all payments funded with MRAP benefits.

16. Qualify as an 

Unemployment 

Program

 Yes  No
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SCHEDULE B-3

California Housing Finance Agency Mortgage Assistance Corporation (“CalHFA MAC”)

PRINCIPAL REDUCTION PROGRAM

Summary Guidelines

1. Program Overview The Principal Reduction Program (“PRP”) is one of CalHFA MAC’s 

federally-funded programs developed with a goal to provide capital to 

homeowners that have suffered a hardship to reduce the outstanding 

principal balances of qualifying properties with negative equity. 

PRP will provide monies to reduce the principal balance of the first 

mortgage with a loan recast, a loan modification, or a reduction or 

elimination of an existing non-interest bearing forbearance, each with the 

purpose of establishing an appropriate level of debt for eligible 

homeowners with qualifying properties.

2. Program Goals The PRP will reduce the principal balances of underwater mortgages in 

cooperation with participating lenders. Such lenders will recast eligible 

loans, provide a loan modification or reduce or eliminate an existing noninterest bearing forbearance to help qualifying homeowners stay in their 

homes.

A principal curtailment through PRP will achieve desired income ratios, 

payment affordability and establish an appropriate level of debt for a 

homeowner with respect to their existing mortgage per program 

guidelines.

3. Target Population / 

Areas

PRP is designed to target low-to-moderate income homeowners and 

address the needs of a homeowner’s specific situation in lieu of targeting 

certain regions or counties.

4. Program Allocation

(Excluding 

Administrative 

Expenses)

$931,442,793.52

5. Borrower Eligibility 

Criteria

• Homeowner qualifies as low-to-moderate income based on perhousehold income thresholds set forth in the county in which the 

homeowner resides. Income thresholds are as posted on the 

Keep Your Home California website.

• Homeowner must complete and sign a Hardship Affidavit / 3rd 

Party Authorization to document the reason for the hardship.

• Homeowners who have recently encountered a financial hardship 

due to their military service are eligible.

• Homeowner has adequate income to sustain modified mortgage 

payments per CalHFA MAC approved investor guidelines.

• Homeowner must agree to provide all necessary documentation 
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to satisfy program guidelines established by CalHFA MAC.

• Mortgage loan must be delinquent or meet the CalHFA MAC 

definition of imminent default as substantiated by homeowner’s 

hardship documentation. The delinquency and the total amount 

required to cure the delinquency is verified with the servicer. 

Loans in foreclosure are eligible.

• A pre-assistance loan to value of greater than 140% is considered

a hardship indicative of imminent default.

• The homeowner’s post-assistance monthly mortgage payment 

ratio must be no greater than 38% of the gross household 

income, excluding temporary income (e.g., unemployment or 

short-term disability benefits), to meet the definition of an 

affordable payment. On a case-by-case basis, CalHFA MAC 

reserves the right to review and approve investor program 

guidelines that utilize affordable mortgage definitions greater 

than 38%. 

• A loan modification, when combined with principal reduction

assistance, must meet the CalHFA MAC modification and program 

guidelines. 

• General program eligibility is determined by CalHFA MAC, the 

housing counselor or servicer based on information received from 

the homeowner. Program-specific eligibility is determined by 

CalHFA MAC on a first-come/first-approved basis until program 

funds and funding reserves have been exhausted. Loan servicer 

will implement the HHF program based on participation 

agreement terms and conditions.

• Funding allocation will be tracked, monitored and performed by 

CalHFA MAC in a centralized processing operation.

6. Property / Loan 

Eligibility Criteria

• Current, unpaid principal balance (“UPB”) (includes the interestbearing unpaid principal balance and any existing non-interest 

forbearance balance) of the first-lien mortgage loan is not greater 

than $729,750.

• The property securing the mortgage loan must not be 

abandoned, vacant or condemned.

• The applicant must own and occupy the single family, 1-4 unit 

home (an attached or detached house or a condominium unit) 

located in California and it must be their primary residence. 

Mobile homes are eligible if they are permanently affixed to the 

real property that is secured by the first lien.

• PRP funds may be used with a loan recast, a loan modification or 

a reduction or elimination of an existing non-interest bearing 

forbearance to achieve long term sustainability for the 

homeowner. Loan modifications that include PRP assistance may 

or may not include a rate reduction, an adjustment to term or 

additional forbearance to achieve affordability. PRP funds may be 

used to reduce or eliminate a non-interest bearing forbearance 

that was an outcome of a prior loan modification.
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7. Program Exclusions • Homeowner in an “active” bankruptcy is ineligible for assistance 

consideration. Homeowners who have previously filed 

bankruptcy are eligible for consideration with proof of court 

order “Dismissal” or “Discharge”. 

• Homeowner fails to satisfy lender underwriting guidelines.

• Any principal reduction received under PRP results in a postassistance loan to value ratio (“LTV”) of less than 105% or greater 

than 140%.

• Homeowner’s pre-assistance total monthly first-lien mortgage 

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

escrowed association fees, as applicable, calculated on the 

current UPB, including outstanding non-interest bearing 

forbearance amounts, is less than 31 percent of the homeowner’s 

gross monthly household income, excluding temporary income 

(e.g., unemployment and short-term disability benefits), as 

determined by CalHFA MAC at the time of a homeowner’s 

application for assistance.

• Property is subject to a first priority lien securing a Home Equity 

Line of Credit (“HELOC”).

8. Structure of 

Assistance

In the event that CalHFA MAC receives less than 100% match by the 

lender/servicer, CalHFA MAC will structure the assistance as a nonrecourse, non-interest bearing subordinate loan in favor of the Eligible 

Entity (CalHFA MAC) secured by a junior lien recorded against the 

property in the amount of the HHF assistance. At the conclusion of (5) 

five years, the subordinate loan will be released. Loan funds will only be 

repaid to Eligible Entity (CalHFA MAC) in the event of a sale or a refinance 

that includes cash out with sufficient net equity proceeds prior to 

forgiveness. Recovered funds will be recycled in order to provide 

additional program assistance until December 31, 2017, at which time 

any recovered funds will be returned to Treasury.

If the lender/servicer matches the assistance in an amount equal to or 

greater than 100% of the PRP assistance provided to the homeowner, 

then the assistance is not required to be structured as a loan to the 

homeowner.

After December 31, 2017, any remaining or returned funds will be 

returned to Treasury.

9. Per Household 

Assistance

Up to $100,000 per household (average funding of $67,191.88), less 

program monies previously received under other HHF programs. 

10. Duration of 

Assistance

In most cases, assistance will be available to households on a one- time 

only basis; provided, however, CalHFA MAC reserves the right to provide 

additional PRP benefits (not exceed the maximum program assistance 

amount per household) to previous PRP recipients if the homeowner has 

suffered a subsequent, valid hardship.

11. Estimated Number 

of Participating 

Approximately 13,862. This figure is based on loans with unpaid principal 

balances ranging from $200,000 to $400,000, with an average funding of 
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Households $67,191.88.

12. Program Inception / 

Duration

The statewide launch of PRP was February 7, 2011 and it will continue up 

to five (5) years or until funding is fully reserved.

13. Program Interactions 

with Other HFA 

Programs

PRP may be used in conjunction with MRAP aimed at reinstatement.

14. Program Interactions 

with HAMP

PRP may work in conjunction with a HAMP modification to help eligible 

homeowners achieve desired income ratios, payment affordability and 

establish an appropriate level of debt. PRP may be used to reduce or 

eliminate an existing non-interest bearing forbearance balance from a 

previous HAMP loan modification. Additional PRP assistance may be 

available (in addition to the reduction or elimination of the non-interest 

bearing forbearance) only when the HAMP loan has lost its good standing 

status. PRP may also be combined or used in conjunction with the HAMP 

Principal Reduction Alternative (PRA). PRP funds are not eligible in any 

combination to qualify for HAMP PRA investor incentive compensation. 

15. Program Leverage 

with Other Financial 

Resources

The goal of the program is for the applicable servicer/lender to leverage 

PRP funds by providing a loan recast, a loan modification or reduction or 

elimination of existing non-interest bearing forbearance to help establish 

an appropriate level of first mortgage debt for homeowners with 

qualifying properties. 

CalHFA MAC will require that the servicer waive all accrued and unpaid 

late charges and NSF fees at the time the modification agreement is 

completed. CalHFA MAC will require the servicer to waive any associated 

recast fee. 

16. Qualify as an 

Unemployment 

Program

 Yes  No
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SCHEDULE B-4

California Housing Finance Agency Mortgage Assistance Corporation (“CalHFA MAC”)

THE TRANSITION ASSISTANCE PROGRAM

Summary Guidelines

1. Program Overview The Transition Assistance Program (“TAP”) is one of CalHFA MAC’s 

federally-funded programs developed to provide eligible homeowners 

with transition assistance when it is determined that they can no longer 

afford their home.

TAP will be used in conjunction with short sale and deed-in-lieu programs 

to help homeowners make a smooth transition to housing. Homeowners 

will be required to occupy and maintain the property until the home is 

sold or returned to the lender as negotiated.

Program funds will be available on a one-time only basis up to $5,000 per 

household and can be used or layered with other CalHFA MAC HHF 

programs. Funds will be sent to the homeowner after the short sale or 

deed-in-lieu of foreclosure closing. Funds are intended to help the 

homeowner secure new housing (e.g., rent, moving expenses, and 

security deposits) and will also be available for transition assistance 

counseling services.

2. Program Goals CalHFA MAC envisions that these monies would be used to complement 

other federal or lender programs designed specifically to stabilize 

communities by providing assistance to homeowners who have suffered a 

financial hardship and as a result are no longer financially able to afford 

their mortgage payments.

3. Target Population / 

Areas

TAP is designed to target low-to-moderate income homeowners and 

address the needs of a homeowner’s specific situation in lieu of targeting 

certain regions or counties.

4. Program Allocation 

(Excluding 

Administrative 

Expenses)

$5,000,000.00

5. Borrower Eligibility 

Criteria

• Homeowner qualifies as low-to-moderate income based on perhousehold income thresholds set forth in the county in which the 

homeowner resides. Income thresholds are as posted on the Keep 

Your Home California website.

• Homeowner must complete and sign a Hardship Affidavit / 3rd Party 

Authorization to document the reason for the hardship.

• Homeowners who have recently encountered a financial hardship 

due to their military service are eligible.

• Homeowner must agree to provide all necessary documentation to 
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satisfy program guidelines established by CalHFA MAC.

• Mortgage loan is delinquent or at risk of imminent default as 

substantiated by homeowner’s hardship documentation. Loans in 

foreclosure are eligible. 

• General program eligibility is determined by CalHFA MAC, the housing 

counselor or servicer based on information received from the 

homeowner. Program-specific eligibility is determined by CalHFA 

MAC on a first-come, first-approved basis until program funds and 

funding reserves have been exhausted. Loan servicer will implement 

the HHF program based on participation agreement terms and 

conditions.

• Funding allocation will be tracked, monitored and performed by 

CalHFA MAC in a centralized processing operation.

6. Property / Loan 

Eligibility Criteria

• Current, unpaid principal balance (“UPB”) (includes the interestbearing unpaid principal balance and any existing non-interest 

bearing forbearance balance) of the first-lien mortgage loan is not 

greater than $729,750. 

• The property securing the mortgage loan must not be 

abandoned, vacant or condemned.

• The applicant must own and occupy the single family, 1-4 unit 

home (an attached or detached house or a condominium unit) 

located in California and it must be their primary residence. 

Mobile homes are eligible if they are permanently affixed to the 

real property that is secured by the first lien.

7. Program Exclusions • Homeowner in an “active” bankruptcy is ineligible for TAP 

assistance consideration. Homeowners who have previously filed 

bankruptcy are eligible for consideration with proof of court 

order “Dismissal” or “Discharge”. 

• Property is subject to a first priority lien securing a Home Equity 

Line of Credit (“HELOC”).

8. Structure of 

Assistance

TAP assistance will not be structured as a loan.

After December 31, 2017, any remaining or returned funds will be 

returned to Treasury.

9. Per Household 

Assistance

Up to $5,000 per household (average funding of $5,000.00).

10. Duration of 

Assistance

Available on a one-time only basis, per household.

11. Estimated Number 

of Participating 

Households

Approximately 1,000. This figure is based on loans with unpaid principal 

balances ranging from $200,000 to $400,000 with an average funding of 

$5,000.00. 

12. Program Inception 

/Duration

The statewide launch of TAP was February 7, 2011 and it will continue up 

to five (5) years or until funding is fully reserved.

13. Program Leverage

with Other HFA 

Programs

TAP benefits may be available to the homeowner even if UMA, MRAP 

and/or PRP benefits have been utilized, subject to the HHF program 

maximum benefit cap of $100,000. 

14. Program Interactions TAP complements HAMP and HAFA. The funds will leverage monies being 
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with HAMP made available through HAFA. Servicer is required to follow HAFA 

guidelines for allowable costs. In cases where the servicer has approved 

the homeowner for a HAFA transaction, TAP dollars will be limited to 

$2,000 in order to maintain the $5,000 HHF program maximum per 

household.

15. Program Leverage 

with Other Financial 

Resources

None. 

16. Qualify as an 

Unemployment 

Program

 Yes  No
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Schedule B-5

California Housing Finance Agency Mortgage Assistance Corporation (“CalHFA MAC”)

Community HousingWorks 

C2MPRP: Community 2nd Mortgage Principal Reduction Program

Summary Guidelines

1. Program 

Overview

The Community 2nd Mortgage Principal Reduction Program (Community 

2nd Mortgage PRP, or C2MPRP) is offered through a CalHFA federallyfunded Hardest Hit Fund program through a contract between CalHFA 

MAC and Community HousingWorks. Community HousingWorks will 

administer this program. 

C2MPRP will provide capital on 40/60 matching basis with participating 

nonprofit, credit union and lenders, to reduce the outstanding principal 

balances of subordinate second mortgages, as well as providing relief for a 

subordinate lien on a short sale on a 40/60 matching basis for qualifying 

properties with negative equity exceeding 107% CLTV. The lenders who 

will participate in this program are nonprofit lenders, credit unions and 

lenders with qualifying subordinate liens. These lenders provided 

“amortizing seconds” home buyers throughout California. Participation in 

this program is Statewide. C2MPRP will provide monies to reduce the 

principal balance on a 40/60 matching basis for the purposes of 

establishing an appropriate level of debt for eligible borrowers with 

qualifying properties. For example, if the subordinate debt to be 

extinguished is $50,000, the C2MPRP program will provide up to 40% of 

that amount or $20,000 and the participating lender/investor would 

forgive 60% or $30,000. A reduction in principal through C2MPRP can 

achieve desired income ratios and affordability for a borrower on the 

existing mortgage loans or can be used in conjunction with a loan 

modification. Lenders holding subordinate liens in the State of California 

may find that their clients’ only option to avoid foreclosure is a short sale. 

The C2MPRP program can provide subordinate lien holders a 40/60 

matching incentive for the subordinate lien holder to facilitate a short 

sale in order to avoid foreclosure. The principal reduction will be 40% of 

the principal balance and the lender will accept the 60% reduction. For 

example if the total principal balance is $50,000, the C2MPRP program can 

provide $20,000 to subordinate lien holders if they will accept the principal 

reduction of $30,000 in order to accept the short sale. The total amount 

of principal that can be paid out on all liens is $50,000.
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2. Program Goals The goal of this program is to reduce foreclosures by reducing principal 

balances, on qualified amortizing subordinate debt, to those market levels 

needed to prevent avoidable foreclosures and promote sustainable 

homeownership. 

There are situations where a short sale is the only solution to avoiding 

foreclosure; by providing matching funds this will incent the subordinate 

lien holders, who in many cases are only able to recover a $1,000 or less in 

a short sale, to accept the transaction and allow the sale to go through.

3. Target Population 

/ Areas

This program will be offered on a statewide basis.

4. Program 

Allocation

(Excluding Admin 

Expenses)

$9,245,330.00.

5. Borrower 

Eligibility Criteria

• Borrower earns 120% AMI or less, as defined by the county they reside 

in.

• Borrower must complete and sign a Hardship Affidavit and document 

the reason for the hardship.

• Hardship is defined as economic hardship, which occurs when a 

household is unable to pay reasonable basic living expenses. The 

determination of a reasonable amount for basic living expenses will be 

made by the Underwriter and will vary according to the unique 

circumstances of every individual household.

• Borrower has adequate income to sustain modified mortgage 

payments defined as a housing debt-to-income ratio of no more than 

38% (first lien only), excluding temporary income such as 

unemployment or temporary disability payments.

• In the case of a short sale request, homeowner must be able to verify 

that they have a hardship that does not permit them to make their 

monthly mortgage payments or they meet the GSE standard short sale 

requirements.

• Borrower has completed level 2 counseling with a HUD-approved 

agency. Payment for counseling services will not be paid out of 

Hardest Hit funds

• Borrower is able to satisfy program guidelines.

• The first or second subordinate mortgage loan is delinquent or the 

servicer receives documentation from the borrower that substantiates 

an imminent default that meets hardship qualifications.

6. Property/Loan • The property is encumbered by a first lien conventional loan
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Eligibility Criteria • Property must be single family residential 1-4 units, condominium, or 

cooperative.

• The total mortgage indebtedness cannot exceed the GSE conforming 

limit of $729,750.

• The property securing the mortgage loan must not be abandoned, 

vacant, condemned or in a serious state of disrepair.

• The subject property is the borrower’s principal residence and the 

property is located in California.

• HELOCs with required monthly payments (amortized or interest only) 

may be considered. Documentation that these loans have been closed 

and reconveyed if C2MPRP assistance is provided will be required. 

7. Program 

Exclusions

• Borrower’s property is subject to a foreclosure trustee sale (does not 

apply to short sale requests).

• Hardship caused by voluntary resignation of employment. 

• Second mortgages eligible for 2MP or 2LP.

• Borrower fails to satisfy underwriting guidelines. 

• Homeowner in an “active” bankruptcy is ineligible for assistance 

consideration. Homeowners who have previously filed bankruptcy are 

eligible for consideration with proof of court order “Dismissal” or 

“Discharge”.

8. Structure of 

Assistance

The assistance will not be structured as a loan since there will always be at 

least a 40/60 match from the lender.

9. Per Household 

Assistance

The lower of 2 limiting guidelines:

Maximum of $50,000; or amount which, with the match, lowers CLTV to 

107%.

It is expected that the average assistance will be approximately $25,000.

10. Duration of 

Assistance

The assistance will be a onetime payment.

11. Estimated 

Number of 

Participating 

Households

Approximately 370

12. Program 

Inception/

Duration

The Program will launch within 90 days of Treasury approval and will be 

available for approximately 2-3 years, until funds are exhausted. Any 

funds remaining on hand on December 31, 2017 will be returned to 

Treasury.
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13. Program 

Interactions with 

Other HFA

Programs 

C2MPRP cannot be utilized with other Keep Your Home California 

programs except for the Unemployment Mortgage Assistance program. 

Recipients of the C2MPRP program shall be notified in writing that their 

participation in that program will disqualify them from participating in any 

other Keep Your Home California program except the Unemployment 

Mortgage Assistance Program. 

14. Program 

Interactions with 

HAMP

C2MPRP complements and leverages HAMP 1st mortgage modifications 

since reduction or elimination of the 2nd liens will enable many borrowers 

to qualify for a HAMP modification.

15. Program Leverage 

with Other 

Financial 

Resources

Participating lenders will be required to write down 60% of the overall 

principal reduction (in the case of a short sale, lender will forgive debt up 

to 60%) calculated and approved by C2MPRP Underwriting, and C2MPRP

shall pay the lender the remaining 40% as a subsidy. The lender will 

provide modification of the Note to reflect 100% of the overall principal 

reduction. 

16. Qualify as an 

Unemployment 

Program

 Yes  No
Doc#: US1:9232902v1

SCHEDULE B-6

California Housing Finance Agency Mortgage Assistance Corporation (“CalHFA MAC”)

Los Angeles Housing Department (“LAHD”)

Principal Reduction Program

Summary Guidelines

Program was unfunded as of February 27, 2014.
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SCHEDULE B-7

California Housing Finance Agency Mortgage Assistance Corporation

(“CalHFA MAC”)

NeighborWorks® Sacramento

Short Sale Gateway Program

Program was unfunded as of September 20, 2013.
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SCHEDULE C

Permitted Administrative Expenses

California

One-time / Start-Up Expenses:

Initial Personnel $534,394.39

Building, Equipment, Technology $131,240.82

Professional Services $4,565,316.00

Supplies / Miscellaneous $33,650.00

Marketing /Communications $213,217.36

Travel $85,000.00

Website development /Translation

Contingency $2,129,073.80

Subtotal $7,691,892.37

Operating / Administrative Expenses:

Salaries $56,846,522.70

Professional Services (Legal, Compliance, Audit, Monitoring) $16,964,051.90

Travel $726,830.13

Buildings, Leases & Equipment $2,179,641.01

Information Technology & Communications $7,403,818.75

Office Supplies/Postage and Delivery/Subscriptions $1,208,153.66

Risk Management/ Insurance $109,552.50

Training $0.00

Marketing/PR $12,320,000.00

Miscellaneous $2,764,648.91

Subtotal $100,523,219.56

Transaction Related Expenses:

Recording Fees $4,672,957.80

Wire Transfer Fees $393,000.00

Counseling Expenses $34,868,987.47

File Intake $30,000,000.00

Decision Costs $4,868,987.47

Successful File $0.00

Key Business Partners On-Going $0.00

Subtotal $39,934,945.27

Grand Total $148,150,057.20

% of Total Award 7.50%

Award Amount $1,975,334,096.00