Eighth Amendment to HPA — Arizona

TAMPA/200828.2

EIGHTH AMENDMENT TO

COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT

and

HFA PARTICIPATION AGREEMENT

This Eighth Amendment to Commitment to Purchase Financial Instrument and HFA

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

Schedule A attached hereto as the Eighth 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”), and as further amended

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

Participation Agreement (the “Seventh Amendment”; and together with the Original HPA as

amended thereby and by the First Amendment, Second Amendment, Third Amendment, Fourth

Amendment, Fifth Amendment and Sixth Amendment, 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”);

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

to their existing Service Schedules and Treasury has agreed to the same;

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

document all approved modifications to the Service Schedules;
TAMPA/200828.2 2

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 Eighth 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

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

further amended by this Eighth 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 Eighth 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 Eighth 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 Eighth Amendment.

2. Representations, Warranties and Covenants

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

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

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

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

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

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

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

Event of Default under the HPA.

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

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

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

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

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

Entity is in breach of any such covenant.

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

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

Treasury in connection with this Eighth 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

Eighth Amendment and any other closing documentation delivered to Treasury in
TAMPA/200828.2 3

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

thereunder.

3. Miscellaneous

A. The recitals set forth at the beginning of this Eighth 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 Eighth 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 Eighth Amendment shall be treated as originals for all purposes.

[SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE

INTENTIONALLY LEFT BLANK]


TAMPA/200828.2 5

EXHIBITS AND SCHEDULES

Schedule A Basic Information

Schedule B Service Schedules

Schedule C Permitted Expenses
TAMPA/200828.2 A-1

SCHEDULE A

BASIC INFORMATION

Eligible Entity Information:

Name of the Eligible Entity: Arizona Home Foreclosure Prevention

Funding Corporation

Corporate or other organizational form: Arizona Non-Profit corporation

Jurisdiction of organization: Arizona domiciliary

Notice Information: Arizona Home Foreclosure Prevention

Funding Corporation

c/o Carol Ditmore, Arizona Department of

Housing

1110 W. Washington, Ste. 310

Phoenix, Arizona 85007

Phone: (602) 771-1000

Fax: (602) 771-1002

Email: Carol.Ditmore@azhousing.gov

HFA Information:

Name of HFA: State of Arizona, Arizona Department of

Housing

Organizational form: Constituent Department of the State of

Arizona

Date of Application: April 16, 2010

Date of Action Plan: September 1, 2010

Notice Information: Arizona Department of Housing

Carol Ditmore, Assistant Deputy Director,

Operations

1110 W. Washington, Ste. 310

Phoenix, AZ 85007

Phone: (602) 771-1000

Fax: (602) 771-1002

Email: Carol.Ditmore@azhousing.gov

Program Participation Cap: $267,766,006.00

Portion of Program Participation Cap

Representing Original HHF Funds: $125,100,000.00
TAMPA/200828.2 A-2

Portion of Program Participation Cap

Representing Unemployment HHF Funds: N/A

Permitted Expenses: $32,155,609.00

Closing Date: June 23, 2010

First Amendment Date: September 23, 2010

Second Amendment Date: September 29, 2010

Third Amendment Date: December 16, 2010

Fourth Amendment Date: January 26, 2011

Fifth Amendment Date: March 31, 2011

Sixth Amendment Date: May 25, 2011

Seventh Amendment Date: August 31, 2011

Eighth Amendment Date: March 29, 2012

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.
TAMPA/200828.2 B-1

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.
TAMPA/200828.2 B-2

SERVICE SCHEDULE B-1

SAVEMYHOMEAZ

Permanent Modifications Component

Summary Guidelines

1. Program Overview The Permanent Modification Component is being administered

by the Arizona Department of Housing (“ADOH”). Efforts may

include principal reduction, interest rate reduction, and/or term

extension to achieve a monthly payment that does not exceed

31.99% of the borrower’s monthly income, depending on the

agreement with the servicer. Borrowers that are suffering an

approved hardship, demonstrate personal responsibility, and

whose principal outstanding mortgage balance exceeds 120% of

the present market value of the borrower’s residence may be

eligible for principal reduction assistance.

Depending on the agreement with the servicer, one of two

methods will be used to reduce the principal balance of a

borrower’s primary mortgage:

 A forgivable loan may be made to eligible borrowers for

up to $50,000; or

 Up to $50,000 in assistance may be provided over a

three-year period.

A borrower’s primary mortgage lender may agree to make a

matching reduction to the principal balance of the primary loan.

The structure of these two types of assistance is further discussed

in section 8.

2. Program Goals The central goal of the Permanent Modification Component is to

help homeowners avoid foreclosure by permanently modifying a

borrower’s primary mortgage to achieve a monthly payment that

does not exceed 31.99% of the borrower’s monthly income,

depending on the agreement with the servicer. Loan

modifications may include principal reduction (the amount of

any principal reduction provided by HHF Program funds may be

matched by a borrower’s lender/servicer), interest rate reduction,

and/or term extension. The Permanent Modification Component

aspires to achieve a ninety percent (90%) success rate in

modifying loans with the borrowers’ lenders/servicers.

3. Target

Population/Areas

The targeted populations are households whose income does not

exceed 150% Area Median Income (“AMI”) and that exhibit a

commitment to retaining their home and can demonstrate an

ability to maintain a financial obligation for the home. These
TAMPA/200828.2 B-3

households will be analyzed based on two primary factors which

are affordability and profitability. Each household will be

evaluated to determine an affordable and sustainable monthly

mortgage payment according to its gross monthly income.

It is projected that program assistance will be provided to

targeted areas according to the following breakdown of counties.

These projections are based on population, delinquent loans and

pending foreclosures in these areas.

Maricopa County, 79% of program funds

Pima County, 9% of program funds

Pinal County, 9% of program funds

All other areas, 3% of program funds

4. Program Allocation

(Excluding

Administrative

Expenses)

$160,191,630.00

5. Borrower

Eligibility Criteria

 Eligible financial hardship. Eligible financial hardships

include: reduced income due to under employment, medical

condition divorce or death. Borrower will be required to

provide a financial hardship affidavit.

 Property must be borrower’s primary residence.

 150% of AMI maximum household income.

 Present dollar value of 31.99% of monthly gross income

must be equal to or greater than NPV of REO, depending on

the agreement with the servicer.

 Depending on the agreement with the servicer, the eligibility

will either be determined through application process and

application evaluation by ADOH and HUD approved

counselors or may be determined through application

evaluation by the servicer and ADOH.

6. Property/Loan

Eligibility Criteria

 Property must be owner occupied.

 Mortgage amount must be equal to or less than GSE

conforming limits.

 Mortgage must be delinquent by at least 2 payments or the

borrower that is current or has only one payment due and

unpaid by the end of the month in which it is due and makes

application for program assistance will be evaluated to

determine if he or she is at risk of imminent default.

 Depending on the agreement with the servicer, mortgage

may be required to be a minimum of 7 days prior to the

scheduled date of a trustee’s sale with respect to borrower’s

residence.

 Single family dwelling (1 to 4 units).
TAMPA/200828.2 B-4

7. Program

Exclusions

 Current mortgage payment is equal to or less than 31.99% of

borrower’s monthly gross income.

 Properties that have an outstanding mortgage(s) in excess of

150% of the purchase price.

8. Structure of

Assistance

Depending on the agreement with the servicer, the structure of

assistance may be provided in one of two ways:

 The Permanent Modifications Component may provide

up-front, forgivable loan to eligible borrowers for up to

$50,000 depending upon individual circumstances. Notes

evidencing these loans will be for a term of five (5) years

in favor of the Eligible Entity. A forgiveness clause will

extinguish the loan amount at the end of five years

provided the consumer has satisfied all terms of the loan.

The terms of these loans would be zero interest, zero

payment for the duration of the loan. The assistance loan

would be considered satisfied upon expiration of 5 year

term and AHFPFC would release the lien connected with

the note. These loans would be utilized to reduce a

portion of the principal on the first mortgage loan, the

amount of which may be matched by the primary

lender/servicer. During the term of the assistance loan it

would be “due on sale” if the home has increased in

equity. If the home has not increased in equity to the

degree necessary to repay the note, all or a portion of the

note may be forgiven as not to create additional hardships

on the borrower/seller at the time of closing. Any loan

proceeds that are returned to the Program would be

reutilized to assist additional homeowners. All funds

recycled into the program will be returned to Treasury

after 12/31/2017.

 Assistance of up to $50,000 may be provided in equal

installments over a three year period, at months 13, 25

and 37, provided the homeowner continues to make

current mortgage payments. In these cases, assistance

will be matched dollar for dollar and therefore a loan is

not required in favor of the Eligible Entity.
TAMPA/200828.2 B-5

9. Per Household

Assistance

 $50,000 is the Maximum Amount of Assistance.

 $30,000 is the Estimated Median Amount of Assistance.

10. Duration of

Assistance

Permanent modification assistance will be disbursed in full at the

initial completion of the modification agreement.

11. Estimated Number

of Participating

Households

It is anticipated that the Permanent Modification Component will

assist a minimum of 3,207 households in avoiding imminent

foreclosures.

12. Program

Inception/Duration

This program component began in September 2010 and it is

projected that assistance will be expended over a three year

period of time. However, repayment of assistance may extend

this time frame one or two additional years.

13. Program

Interactions with

Other Programs

(e.g. other HFA

programs)

N/A

14. Program

Interactions with

HAMP

AHFPFC’s program may interact with aspects of the Making

Home Affordable Program (MHA) as AHFPFC tries to leverage

the resources provided by the MHA programs to expand the pool

of borrowers that are eligible for HAMP or other MHA options.

In some cases, the assistance the AHFPFC provides under HHF

can supplement and extend assistance provided through MHA.

To maximize the effectiveness of our foreclosure mitigation

efforts, servicers should use reasonable efforts to ensure that

TARP funds are used efficiently and that HHF programs

complement MHA programs.

15. Program Leverage

with Other

Financial Resources

In order to leverage the funds, ADOH will attempt to have the

lender/servicer match any principal reduction provided through

the Permanent Modification Component. It is expected that this

match will be no less than one to one. In the event the match is

less than one to one then the structure of assistance will be in the

form of a loan as described in the first bullet under section 8

above. In some instances the lender/servicer will need to

contribute a larger amount based upon the affordability/

profitability assessment of the transaction and the Permanent

Modification Component maximum assistance per household.

Lender match amounts up to and equal to the amount of program

funds for any homeowner shall be credited at the time of closing

of the modification. Lender match amounts greater than the

amount of program funds may be credited after closing

according to a schedule satisfactory to ADOH.
TAMPA/200828.2 B-6

16. Qualify as an

Unemployment

Program

N/A
TAMPA/200828.2 B-7

SERVICE SCHEDULE B-2

SAVEMYHOMEAZ

Second Mortgage Assistance Component

Summary Guidelines

1. Program Overview Under the Second Mortgage Assistance Component, assistance

of up to $16,500 will be provided to remove second mortgages if

necessary to modify the terms of primary loans. This amount

may also be available to borrowers where the second mortgage

itself is burdensome.

2. Program Goals The goals of the Second Mortgage Assistance Component is to

help homeowners avoid foreclosure by eliminating a second

mortgage if necessary to modify the terms of the primary loan,

and to reduce the likelihood that a borrower will re-default under

its primary loan as a result of the burden of a second mortgage.

3. Target

Population/Areas

The targeted populations are households whose income does not

exceed 150% AMI and that exhibit a commitment to retaining

their home and can demonstrate an ability to maintain a financial

obligation for the home.

It is projected that program assistance will be provided to

targeted areas according to the following breakdown of counties.

These projections are based on population, delinquent loans and

pending foreclosures in these areas.

Maricopa County, 75% of program funds

Pima County, 8% of program funds

Pinal County, 9% of program funds

All other areas, 8% of program funds

4. Program Allocation

(Excluding

Administrative

Expenses)

$4,516,317.00

5. Borrower Eligibility

Criteria

 Eligible financial hardship. Eligible financial hardships

include: reduced income due to under employment, medical

condition divorce or death. Borrower will be required to

provide a financial hardship affidavit.

 Property must be borrower’s primary residence (single

family dwelling (1 to 4 units).

 150% of AMI maximum household income.

 Present dollar value of 31.99% of monthly gross income

must be equal to or greater than NPV of REO.

6. Property/Loan  Property must be owner occupied.
TAMPA/200828.2 B-8

Eligibility Criteria  Mortgage amount must be equal to or less than GSE

conforming limits.

 Mortgage must be delinquent by at least 2 payments or the

borrower that is current or has only one payment due and

unpaid by the end of the month in which it is due and makes

application for program assistance will be evaluated to

determine if he or she is at risk of imminent default.

 Depending on the agreement with the servicer, mortgage

may be required to be a minimum of 7 days prior to the

scheduled date of a trustee’s sale.

 Single family dwelling (1 to 4 units)

7. Program Exclusions  Properties that have an outstanding mortgage(s) in excess of

150% of the purchase price.

 Current mortgage payment is equal to or less than 31.99% of

borrower’s monthly gross income.

8. Structure of

Assistance

The Second Mortgage Assistance Component will provide upfront, forgivable, second position loans to eligible borrowers

depending upon individual circumstances. Notes on the

forgivable second loans will be for a term of five (5) years in

favor of the Eligible Entity. A forgiveness clause will extinguish

the loan amount at the end of five years provided the consumer

has satisfied all terms of the loan. The terms of the loan are zero

interest, zero payment for the duration of the loan. The

assistance loan will be considered satisfied upon expiration of 5

year term and ADOH will release the second lien connected with

the note. These loans will be utilized to reduce a portion of the

principal on the existing second mortgage and the remaining

balance will be extinguished by the lender/servicer. During the

term of the assistance loan it will be “due on sale” if the home

has increased in equity. If the home has not increased in equity

to the degree necessary to repay the note, all or a portion of the

note may be forgiven as not to create additional hardships on the

borrower/seller at the time of closing. Any loan proceeds that are

returned to the Program would be reutilized to assist additional

homeowners. All funds recycled into the program will be

returned to Treasury after 12/31/2017.

9. Per Household

Assistance

 40% of UPB or $16,500 Maximum of Second Mortgage

Settlement Assistance.

 $14,000 is the Estimated Median Amount of Assistance.

10. Duration of

Assistance

Second mortgage settlement will be disbursed in full at the initial

completion of the modification agreement.
TAMPA/200828.2 B-9

11. Estimated Number

of Participating

Households

It is anticipated that the Second Mortgage Assistance Component

will assist a minimum of 274 households.

12. Program

Inception/Duration

This program component began in September 2010 and it is

projected that assistance will be expended over a three year

period of time. However, repayment of assistance may extend

this time frame one or two additional years.

13. Program

Interactions with

Other Programs

(e.g. other HFA

programs)

AHFPFC will, on behalf of an approved seller, attempt to

extinguish the 2nd mortgage as part of a short sale that is part of

the short sale assistance component. Assistance is capped at

$8,500.00 when combined with this component.

14. Program

Interactions with

HAMP

AHFPFC’s program may interact with aspects of the Making

Home Affordable Program (MHA) as AHFPFC tries to leverage

the resources provided by the MHA programs to expand the pool

of borrowers that are eligible for HAMP or other MHA options.

In some cases, the assistance the AHFPFC provides under HHF

can supplement and extend assistance provided through MHA.

To maximize the effectiveness of our foreclosure mitigation

efforts, servicers should use reasonable efforts to ensure that

TARP funds are used efficiently and that HHF programs

complement MHA programs.

15. Program Leverage

with Other

Financial Resources

In order to leverage the funds, ADOH requires the

lender/servicer to match any principal reduction provided

through the Second Mortgage Assistance Component. It is

expected that this match will be no less than seven to one.

Lender match amounts up to and equal to the amount of program

funds for any homeowner shall be credited at the time of closing

of the modification. Lender match amounts greater than the

amount of program funds may be credited after closing

according to a schedule satisfactory to ADOH.

16. Qualify as an

Unemployment

Program

N/A
TAMPA/200828.2 B-10

SERVICE SCHEDULE B-3

SAVEMYHOMEAZ

Unemployment/Underemployment Mortgage Assistance Component

Summary Guidelines

1. Program Overview The unemployment/underemployment mortgage assistance

component will provide mortgage relief for qualified

unemployed and underemployed borrowers.

AHFPFC is responsible for screening borrowers to determine

program eligibility and notifying servicers that it intends to

provide assistance to a borrower.

Servicers may refer potentially eligible borrowers to AHFPFC

with prior written approval.

If determined by AHFPFC that an eligible borrower has or had

a hardship of unemployment or underemployment that has

caused delinquency in the mortgage AHFPFC may, on behalf

of that eligible borrower, bring the first mortgage current by

curing all past due payments, accrued interest and legal fees.

AHFPFC will also request that late fees and NSF fees be

waived, but that will not be a requirement. Additional benefits

may consist of making a full monthly 1st mortgage payment to

the servicer until the applicable program cap is reached or the

borrower becomes sufficiently employed and is able to sustain

the payment at 31.99% of gross monthly income. The

borrower will be required to pay a portion of the mortgage

payment to AFHPFC in the amount of 31.99% of household

monthly gross income, excluding unemployment benefits.

AHFPFC may, on behalf of an eligible borrower, attempt to

extinguish the 2nd mortgage through our Second Mortgage

Settlement component.

AHFPFC will be responsible for ongoing monitoring of

borrowers to ensure continued eligibility if receiving monthly

assistance.

2. Program Goals This program will provide assistance for a set period of time

and/or maximum dollar amount so a qualified borrower can

search for adequate work or obtain job training without fear of

losing their home. The purpose of the program is to assist

borrowers until they can obtain sufficient income to resume

scheduled mortgage payments, or qualify for a modified

mortgage payment.
TAMPA/200828.2 B-11

 Sustain the unemployed/underemployed borrower’s

monthly mortgage payment until they can or the

maximum assistance has been provided

 Maintain the borrower’s contribution towards their

monthly mortgage payment at 31.99% of their current

gross monthly income for the duration of the assistance

excluding unemployment benefits.

3. Target

Population/Area

The target population includes eligible homeowners whose

hardship is caused by unemployment or underemployment.

4. Program Allocation

(Excluding

Administrative

Expenses)

$70,427,450.00

5. Borrower Eligibility

Criteria

 If the eligible borrower is unemployed, the borrower

must provide proof they applied for unemployment

benefits and was approved or denied (UB107, UB100,

Claim status report) for reasons identified as acceptable

within the program’s guidelines.

 If the eligible borrower is underemployed, the

borrower must provide documentation of a significant

reduction of income due to circumstances outside of

their control resulting in a housing payment greater

than 31.99% of their monthly gross income

 One or more of the responsible borrowers must be

unemployed/underemployed.

 Borrowers must participate in quarterly (face-to-face

when possible) continued eligibility validation.

 Eligibility requirements for stand alone reinstatement

assistance, without continuing monthly assistance, is as

follows:

1. Borrower must demonstrate the hardship caused by

unemployment or underemployment has passed.

For example, one of the borrowers was

unemployed and now the same borrower is

employed eliminating the hardship.

2. There must be a correlation between the qualified

hardship and the delinquency in the mortgage

payments.
TAMPA/200828.2 B-12

3. Borrowers must demonstrate that they now have

the ability to afford the contractual payments.

Affordability is defined as the payment being at or

under 31.99% of documented gross income.

 Borrower must occupy the subject property as their

primary residence during the assistance disbursement

period.

 All borrowers must sign a hardship affidavit and felony

certification.

 150% of AMI maximum household income.

6. Property/Loan

Eligibility Criteria

 Unpaid principal balance equal to or less than GSE

loan limits

 Property must be owner-occupied

 Mortgage(s) must be delinquent 2 payments or the

borrower that is current or has only one payment due

and unpaid by the end of the month in which it is due

and makes application for program assistance will be

evaluated to determine if he or she is at risk of

imminent default.

 Program payments must go toward a first mortgage

 Single family dwelling (1 to 4 units)

7. Program Exclusions  The Servicer is not required to accept mortgage

assistance payment if a notice of trustee/sheriff sale has

been recorded depending on the agreement with the

servicer.

 Mortgages that are in foreclosure depending on the

agreement with the servicer

 Eligible Unemployed/Underemployed Borrower(s)

whose current 1st mortgage PITI payment is greater

than the program maximum of $2,000 or the program

maximum plus the Borrower(s) 31.99% contribution of

monthly gross income excluding unemployment

benefits

 Properties with a filed Notice of Trustee’s Sale

depending on the agreement with the servicer

 Properties that have an outstanding mortgage(s) in

excess of 150% of the purchase price

8. Structure of

Assistance

AHFPFC will execute and record a non-recourse, non-interest

bearing forgivable note of no more than 5 years in duration,

secured by a junior lien on the property. The note amount will

be forgiven at the completion of the loan term. If the borrower

refinances or sells the property within the forgivable period,

payment will be required if there is sufficient equity to repay.
TAMPA/200828.2 B-13

All funds recycled into the program will be returned to the

Treasury after 12/31/2017.

9. Per Household

Assistance

Servicers have no responsibility for monitoring individual

program participation and are not required to refund payments

received that exceed individual program caps.

 Maximum monthly assistance of $2,000.00

 Maximum number of past due mortgage payments to

be rescued is 12 which allows for a minimum of 12

months of monthly mortgage payment assistance

 $50,000.00 per household when combined with other

program components

10. Duration of

Assistance

Servicers have no responsibility for monitoring payment

duration.

 Up to 24 months of mortgage payment assistance

 Benefits may be provided up to two months posts reemployment provided the 24 months maximum of

mortgage payment assistance has not been met

11. Estimated Number of

Participating

Households

It is anticipated that the unemployment/underemployment

mortgage assistance component will assist a minimum of

3,674 households.

12. Program

Inception/Duration

This program component began in March 2011 and it is

expected to last approximately one to three years or until

AHFPFC funds are fully utilized. All funds still available

after 12/31/2017 will be returned to Treasury.

13. Program Interactions

with Other Programs

(e.g. other HFA

Programs)

N/A

14. Program Interactions

with HAMP

AHFPFC’s program may interact with aspects of the Making

Home Affordable Program (MHA) as AHFPFC tries to

leverage the resources provided by the MHA programs to

expand the pool of borrowers that are eligible for HAMP or

other MHA options. In some cases, the assistance the

AHFPFC provides under HHF can supplement and extend

assistance provided through MHA. To maximize the

effectiveness of our foreclosure mitigation efforts, servicers

should use reasonable efforts to ensure that TARP funds are
TAMPA/200828.2 B-14

used efficiently and that HHF programs complement MHA

programs.

15. Program Leverage

with Other Financial

Resources

Servicers will not charge administrative fees (e.g., NSF, late

charges) in any month where a full contract payment is made.

If the loan is reinstated or modified following AHFPFC

mortgage assistance servicers will waive all administrative

fees accrued since the beginning of the delinquency.

16. Qualify as an

Unemployment

Program

N/A
TAMPA/200828.2 B-15

SERVICE SCHEDULE B-4

SAVEMYHOMEAZ

Short Sale Assistance Component

Summary Guidelines

1. Program Overview Short sale assistance will provide the eligible seller the funds

needed to relocate when a short sale has been approved by the

homeowner’s servicer. Assistance is for sellers who can no

longer afford their home due to hardship such as

unemployment, underemployment, death, disability or divorce

of a homeowner or co-homeowner. Additionally, it will

provide much needed enhancements to the short sale process

for qualified sellers that are approved for a short sale by their

lender.

AHFPFC is responsible for screening sellers to determine

program eligibility and providing notification for the seller

and servicer/lender that it intends to provide assistance to the

seller.

Servicers may refer potentially eligible sellers to AHFPFC

with prior written approval.

AHFPFC will, on behalf of an approved seller, provide

$4,500.00 per household receiving no other short sale

assistance plus 3% of the subject property purchase price in

the form of a seller paid closing cost on a short sale

transaction.

Borrowers will be required to maintain the property until the

home is sold.

AHFPFC will, on behalf of an approved seller, attempt to

extinguish the 2nd mortgage through our Second Mortgage

Settlement Component, which is capped at $8,500.00 when

combined with this component.

AHFPFC will, provide funds directly to the homeowner as a

part of the short sale closing/funding process but not prior to

closing.

2. Program Goals Short sale assistance was designed to help stabilize

communities by providing assistance to consumers in

unrecoverable situations to transition from homeownership to

renting as well as enhance the marketability of short sale

properties and accelerate the stabilization of property value.
TAMPA/200828.2 B-16

3. Target

Population/Area

The targeted populations are households whose income does

not exceed 150% Area Median Income (“AMI”) and that

exhibit an inability to retaining their home.

4. Program Allocation

(Excluding

Administrative

Expenses)

$475,000.00

5. Borrower Eligibility

Criteria

 The household must have gross income of no more than

150 percent of the area median income for the County in

which the property is located.

 Eligible financial hardship. Eligible financial hardships

include: reduced income due to unemployment,

underemployment, death, disability or divorce of a

homeowner or co-homeowner. Borrower will be required

to provide a financial hardship affidavit.

 Borrower (s) must provide proof of short sale approval

from Servicer and Final HUD-1 as a part of the closing

process.

 All sellers must sign a hardship affidavit and felony

certification.

 The seller must provide a copy of the fully executed

purchase and sale agreement.

6. Property/Loan

Eligibility Criteria

The property must be the borrower’s principal residence;

additional property criteria must be met as well which include:

 Unpaid principal balance equal to or less than GSE

loan limits

 Property must be owner-occupied

 Mortgage(s) must be a minimum of 2 monthly

payments delinquent or the borrower that is current or

has only one payment due and unpaid by the end of the

month in which it is due and makes application for

program assistance will be evaluated to determine if he

or she is at risk of imminent default.

 Single family dwelling (1 to 4 units)

7. Program Exclusions  Property located outside of Arizona

 Properties that have an outstanding mortgage(s) in

excess of 150% of the purchase price

 Sellers who apply for assistance after the short sale has

been completed are ineligible to participate

 Sellers who are executing a “strategic default” are

ineligible (determination made through program

underwriting guidelines)
TAMPA/200828.2 B-17

 Sellers whose current mortgage(s) PITI payment is

equal to or less than 31.99% of monthly gross income

excluding unemployment benefits.

 Properties that are under contract that has been

approved by the lender/servicer at the time of the

assistance application.

8. Structure of

Assistance

Assistance under this component will be structured as a

onetime grant.

9. Per Household

Assistance

 $4,500.00 per household receiving no other short sale

assistance plus 3% of the purchase price.

 Sellers participating in Home Affordable Foreclosure

Alternative (HAFA) Assistance may be compensated

up to $1,500 (which with the $3,000 HAFA assistance

brings total assistance to seller to $4,500) plus 3% of

the purchase price.

 Sellers participating in a comparable proprietary

program offered by a Servicer may be provided with

assistance up to an amount that when coupled with the

Servicer’s assistance does not exceed $4,500 plus 3%

of the purchase.

 $25,000.00 per household when combined with other

program components.

10. Duration of

Assistance

Program is a one-time payment per seller household, made

upon close of escrow on the short sale.

11. Estimated Number of

Participating

Households

Based on AHFPFC eligibility criteria and available funding

we expect to provide assistance to a minimum of 148

households.

12. Program

Inception/Duration

This program component began in June 2011 and it is

projected that assistance will be expended over a three year

period of time.

All funds still available after 12/31/2017 will be returned to

Treasury.

13. Program Interactions

with Other Programs

(e.g. other HFA

Programs)

N/A
TAMPA/200828.2 B-18

14. Program Interactions

with HAMP

AHFPFC’s program may interact with aspects of the Making

Home Affordable Program (MHA) as AHFPFC tries to

leverage the resources provided by the MHA programs to

expand the pool of borrowers that are eligible for HAMP or

other MHA options. In some cases, the assistance the

AHFPFC provides under HHF can supplement and extend

assistance provided through MHA. To maximize the

effectiveness of our foreclosure mitigation efforts, servicers

should use reasonable efforts to ensure that TARP funds are

used efficiently and that HHF programs complement MHA

programs.

15. Program Leverage

with Other Financial

Resources

N/A

16. Qualify as an

Unemployment

Program

N/A
TAMPA/200828.2 C-1

SCHEDULE C

PERMITTED EXPENSES

Arizona

Program Duration (years)

One-time / Start-Up Expenses:

Initial Personnel $0.00

Building, Equipment, Technology $9,000.00

Professional Services $4,192.00

Supplies / Miscellaneous $0.00

Marketing /Communications $0.00

Travel $0.00

Website development /Translation $213,851.00

Contingency $100,000.00

Subtotal $327,043.00

Operating / Administrative Expenses:

Salaries $6,612,913.00

Professional Services (Legal, Compliance, Audit, Monitoring) $173,790.00

Travel $34,730.00

Buildings, Leases & Equipment $678,720.00

Information Technology & Communications $50,000.00

Office Supplies/Postage and Delivery/Subscriptions $80,736.00

Risk Management/ Insurance $18,144.00

Training $20,000.00

Marketing/PR $300,000.00

Miscellaneous $657,078.00

Subtotal $8,626,111.00

Transaction Related Expenses:

Recording Fees $8,543,438.00

Wire Transfer Fees $1,386,435.00

Counseling Expenses

File Intake $2,348,494.00

Decision Costs $92,014.00

Successful File $2,990,454.00

Key Business Partners On-Going $7,841,620.00

Subtotal $23,202,455.00

Grand Total $32,155,609.00

% of Total Award 12.01%

Award Amount $267,766,006