COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT

and

PARTICIPATION AGREEMENT

This Commitment to Purchase Financial Instrument and HFA Participation Agreement (the

"Agreement") is entered into as of the Effective Date (defined below), by and among the United

States Department ofthe 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"). Certain information relating to HFA and Eligible

Entity is set forth in Schedule A attached hereto.

Recitals

WHEREAS, Treasury has established several programs under sections 101 and 109 of the

Emergency Economic Stabilization Act of2008 (P.L. 110-343), as amended, as the same may be

amended from time to time ("EESA"), to stabilize the housing market by facilitating mortgage

loan modifications to prevent avoidable foreclosures, including through providing home price

decline protection incentives, encouraging foreclosure alternatives, such as short sales and deeds

in lieu of foreclosure, and making other foreclosure prevention services available to the

marketplace;

WHEREAS, the U.S. Department of Housing and Urban Development, as the nation's housing

agency, has partnered with Treasury in the administration's response to the mortgage and

foreclosure crisis;

WHEREAS, as a component of this partnership Treasury has created a federal housing program

entitled the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (the

"HHF Program") as an additional program pursuant to EESA;

WHEREAS, Treasury has requested proposals from state housing finance agencies in designated

states for the use of funds allocated to the HHF Program to develop and implement innovative

housing initiatives tailored to their local conditions to help prevent foreclosures and stabilize

housing markets, including individual programs targeting unemployed borrowers, "underwater"

borrowers and second lien relief;

WHEREAS, HFA or Eligible Entity has submitted a proposal to Treasury outlining certain

programs to utilize HHF Program funds, which programs are described in the Service Schedules

attached hereto as Schedule B;

WHEREAS, as required under EESA, HFA has designated Eligible Entity as the financial

institution to receive HHF Program funds and act to implement the Services (as defined below);

WHEREAS, HFA and Eligible Entity wish to participate in the HHF Program on the terms and

subject to the conditions set forth herein;

TAMPNHPA - Nevudu/120208.1
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. Services

A. Eligible Entity shall (i) contemporaneously with the execution and delivery of this

Agreement, deliver a fully executed Financial Instrument (the "Financial Instrument") to

Treasury evidencing its obligations under this Agreement, in the form attached hereto as

Exhibit A; (ii) perform the duties and obligations set forth in this Agreement and the

Financial Instrument; and (iii) provide and perform (or engage qualified vendors to provide

and perform) the Services described in the Service Schedules (as defined below).

B. Contemporaneously with the execution and delivery of this Agreement, HFA and

Eligible Entity shall deliver to Treasury multiple schedules (each a "Service Schedule" and

together, the "Service Schedules") describing the services (the "Services") to be performed

by Eligible Entity under the HHF Program. The Service Schedules will be numbered

sequentially as Service Schedule B-1, Service Schedule B-2, et. seq., and are referenced

herein, collectively, as Schedule B.

C. Contemporaneously with the execution and delivery of this Agreement, HFA and

Eligible Entity shall also deliver to Treasury a budget detailing the administrative expenses

necessary to cany out the Services (the "Permitted Expenses"). The budget detailing the

Permitted Expenses is attached hereto as Schedule C. Neither HFA nor Eligible Entity shall

expend HHF Program funds for administrative expenses in excess of the total amount of the

Permitted Expenses (reasonable variances between line items being permitted) without the

prior consent of Treasury, which may be withheld in Treasury's sole discretion.

Additionally, all administrative expenses paid with HHF Program funds shall be accounted

for and are subject to OMB Circular A-87 (revised 5/4/95, as further amended 8/29/97),

which can be found at http://www.whitehouse.gov/omb/rewrite/circulars/a087/a087-all.html.

2. Representations, Warranties and Covenants

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

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

of such representations and wananties 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 ofthe 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 hereunder.

(l) HFA and Eligible Entity each represent and wanant that it is in compliance with,

and covenants that all Services will be performed in compliance with, EESA and all

Federal, state and local laws, regulations, regulatory guidance, statutes, ordinances, codes

and requirements, applicable to the provision ofthe Services by HFA and Eligible Entity,

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TAMPNHPA - Nevada/l20208.1
or its officers, employees, agents or contractors, including, but not limited to, the Truth in

Lending Act, 15 U.S.c. §1601 et seq., the Home Ownership and Equity Protection Act,

15 U.S.C. § 1639, the Federal Trade Commission Act, 15 U.S.C. § 41 et seq., the Equal

Credit Opportunity Act, 15 U.S.C. § 701 et seq., the Fair Credit Reporting Act, 15 U.S.C.

§ 1681 et seq., the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., the Real

Estate Settlement Procedures Act, 12 U.S.C. §2601 et seq., the Fair Housing Act, 42

U.S.C. §3601, the Gramm Leach Bliley Act, 15 U.S.C. §6801-6809, and §§ 114 and 315

of the Fair and Accurate Credit Transactions Act of 2003 (the "FACT Act"), 15 U.S.C.

§§ 1681m(e) and 1681c(h), and all other Federal and state laws and regulations

applicable thereto, including, without limitation, those designed to prevent unfair,

discriminatory or predatory lending practices, tenant rights and licensing (collectively,

the "Applicable Laws").

(2) The performance of the Services will not conflict with, or be prohibited in any

way by, the Applicable Laws or any agreement or restriction by which HFA or Eligible

Entity is bound. Neither HFA nor Eligible Entity is aware of any other legal, financial or

other impediments to performing the Services or its obligations under this Agreement,

and shall promptly notify Treasury of any such impediments which may impair its ability

to perform the Services or its obligations under this Agreement, as applicable. Neither

HFA nor Eligible Entity is delinquent on any Federal tax obligation or any other debt

owed to the United States or collected by the United States for the benefit of others,

excluding any debts or obligations that are being contested by it in good faith.

(3) Neither HFA nor Eligible Entity has received written notice of any action, suit,

restraining order, injunction, investigation, proceeding or inquiry at law or in equity,

pending or threatened, by or before any judicial, quasi-judicial, legislative or

administrative court, agency or authority, or any arbitrator, nor to the best of HFA's and

Eligible Entity's knowledge is there any basis for any of the foregoing, wherein an

unfavorable determination, ruling or finding would materially adversely affect the

validity or enforceability of this Agreement, the Financial Instrument or the ability of

HFA or Eligible Entity to perform its respective obligations hereunder and thereunder.

(4) HFA and Eligible Entity each covenants that: (i) it will perform its obligations in

accordance with this Agreement and Applicable Laws, and will promptly provide such

performance or other reporting as may be required by Treasury, the Government

Accountability Office ("GAO"), Congressional Oversight Panel or the Special Inspector

General of the Troubled Asset Relief Program ("SIGTARP"); (ii) it will maintain

complete, accurate and appropriate records of, and supporting documentation for, all

Services provided in connection with the HHF Program; (iii) all Services will be offered

and performed in accordance with the Service Schedules, fully documented and serviced,

or otherwise performed, in accordance with this Agreement and EESA; and (iv) all data,

collection information and other information reported by HFA or Eligible Entity to

Treasury under this Agreement, including, but not limited to, information that is relied

upon by Treasury in calculating the Purchase Price (as defined below) or in performing

any compliance review will be true, complete and accurate in all material respects, and

consistent with all relevant business records, as and when provided.

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TAMPA/lIPA - NevadalJ20208.!
(5) HFA and Eligible Entity each covenants that it will: (i) perform the Services and

obligations required under this Agreement in accordance with the practices, high

professional standards of care, and degree of attention used in a well-managed operation,

and no less than that which HFA or Eligible Entity exercises or would exercise for itself

under similar circumstances; and (ii) use qualified individuals with suitable training,

education, experience and skills to perform the Services. HFA and Eligible Entity each

acknowledges that HHF Program participation may require changes to, or the

augmentation of, its systems, staffing and procedures, and covenants and agrees to take

all reasonable actions necessary to ensure it has the capacity to implement the Services in

accordance with this Agreement.

(6) HFA and Eligible Entity each covenants that it will comply with all regulations on

conflicts of interest that are applicable to HFA or Eligible Entity, as the case may be, in

connection with the conduct of its business and performance of the Services and all

conflicts of interest and non-disclosure obligations and restrictions and related mitigation

procedures set forth in this Agreement.

(7) HFA and Eligible Entity each acknowledges that the proVIsIOn of false or

misleading information to Treasury in connection with the HHF Program or the Services

may constitute a violation of: (a) Federal criminal law involving fraud, conflict of

interest, bribery, or gratuity violations found in Title 18 of the United States Code; or (b)

the civil False Claims Act (3 r U.S.C. §§ 3729-3733). HFA and Eligible Entity each

covenants to immediately disclose to Treasury any discovered credible evidence, in

connection with this Agreement and the Services, that a management official, employee,

or contractor of Eligible Entity has committed, or may have committed, a violation of the

referenced statutes or other wrongdoing.

(8) HFA and Eligible Entity each covenants to disclose to Treasury any other material

facts or information in its possession that Treasury should expect to know about HFA or

Eligible Entity or its employees, management officials or contractors to help protect the

reputational interests of Treasury in connection with the HHF Program.

(9) HFA and Eligible Entity shall each be responsible for the superVISIOn and

management of any contractor it engages to assist in the performance of the Services or

any obligation under this Agreement. HFA or Eligible Entity, as applicable, shall remove

and replace any contractor that it deems as failing to perform. HFA and Eligible Entity

shall each ensure that all of its contractors comply with the terms and provisions of this

Agreement. Each of HFA and Eligible Entity shall be responsible for the acts or

omissions of its respective contractors as if the acts or omissions were by the HFA or

Eligible Entity, respectively.

(l0) HFA and Eligible Entity each covenants that it will timely inform Treasury of any

anticipated or actual Event of Default and of any suspected or actual Act of Bad Faith

(defined below).

(11) HFA and Eligible Entity each acknowledges that Treasury may be required to

respond, pursuant to the Privacy Act of 1974 (the "Privacy Act"), 5 U.S.c. § 552a, to

- 4 - TAMPNHPA - Ncvada!l20208.1
inquiries from borrmvers and, pursuant to the Freedom of Information Act (the "Freedom

of Information Act"), 5 U.S.C. § 552, to inquiries from other parties, as well as formal

inquiries from Congressional committees and members, the Government Accounting

Office, Inspectors General and other government entities, as well as media and consumer

advocacy group inquiries about the HHF Program and its effectiveness. HFA and

Eligible Entity each covenants that it will respond promptly and accurately to all search

requests made by Treasury, comply with any related procedures which Treasury may

establish, and provide related training to employees and contractors.

(12) HFA and Eligible Entity each acknowledges that Treasury, SIGTARP, GAO and

other parties designated by Treasury or under Applicable Laws shall have the right during

normal business hours to conduct unannounced, informal onsite visits and to conduct

formal onsite and offsite physical, personnel and information technology testing, security

reviews, and audits of HFA and/or Eligible Entity and to examine all books, records and

data related to the Services provided and Purchase Price received in connection with the

Services.

(13) HFA and Eligible Entity each covenants that it will promptly take corrective and

remedial actions associated with reporting and reviews as directed by Treasury or its

designee and provide to Treasury evidence of the effective implementation of corrective

and remedial actions as Treasury shall require. HFA and Eligible Entity each

acknowledges that Treasury may conduct additional reviews based on its findings and the

corrective actions taken by HFA and/or Eligible Entity.

(14) In addition to any obligation to retain financial and accounting records under

Applicable Laws, HFA and Eligible Entity each covenants to retain all data, books,

reports, documents, audit logs and records, including electronic records, or copies

thereof, related to its obligations under this Agreement and the performance of the

Services, as applicable. In addition, HFA and Eligible Entity each agrees to maintain a

copy of all computer systems and application software necessary to review and analyze

these electronic records or copies of such records. Unless otherwise directed by

Treasury, HFA and Eligible Entity shall each retain these records for at least three (3)

years from the End of Term, or for such longer period as may be required pursuant to

Applicable Laws. Treasury may also notify HFA and/or Eligible Entity from time to

time of any additional record retention requirements resulting from litigation and

regulatory investigations in which Treasury or any agents of the United States may have

an interest, and HFA and Eligible Entity each agrees to comply with these litigation and

regulatory investigations requirements. "End of Term" shall mean the date that the

Services performed under all Service Schedules are fully complete, excluding

administrative functions (e.g. the last homeowner is assisted and any loan provided to

such homeowner is either repaid or fully forgiven).

(15) HFA and Eligible Entity shall each provide a bring-down celiificate as to its

continuing compliance with, and the truth and accuracy of, the representations and

warranties set forth in this Agreement and the Financial Instrument, as applicable,

annually, on each anniversary of the Effective Date during the Term (as defined below),

in the form attached hereto as Exhibit B-1 with respect to the HFA (the "HFA

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TAMPAlHPA - Nevadaf120208.1
Certification") and Exhibit B-2 with respect to the Eligible Entity (the "Eligible Entity

Certification").

B. Eligible Entity. Additionally, Eligible Entity hereby makes 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 Eligible Entity. In the event that any of the representations or

warranties made herein ceases to be true and correct or Eligible Entity breaches any of its

covenants made herein, Eligible Entity agrees to notify Treasury immediately and the same

shall constitute an Event of Default hereunder.

(1 ) Eligible Entity constitutes a "financial institution" as such term is defined in

section 3(5) of EESA, has the legal power to receive funds from Treasury under the HHF

Program, and has been designated by HFA to, and hereby agrees to, provide the Services

and implement HFA's proposal to Treasury under the HHF Program.

(2) Eligible Entity is established under the laws of the United States or any state,

territory, or possession of the United States or the District of Columbia, has significant

operations in the United States and is not an agency or instrumentality of, or owned

directly or indirectly by, any foreign government.

(3) Eligible Entity is duly formed and validly existing and has the full corporate

power and authority to enter into, execute, and deliver this Agreement, the Financial

Instrument and any other closing documentation delivered to Treasury in connection with

this Agreement or the Financial Instrument, and to perform its obligations hereunder and

thereunder. Eligible Entity has, and its officers, employees, agents and contractors

providing the Services have, or will have prior to performing the Services, obtained all

licenses and any other approvals or consents required by law to carryon its business as

now being conducted and as contemplated by this Agreement.

C. HFA. Additionally, HFA hereby makes the following representations, warranties and

covenants to Treasury and the truth and accuracy ofsuch representations and warranties and

compliance with and performance of such covenants are continuing obligations of HFA. In

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

correct or HFA breaches any of its covenants made herein, HFA agrees to notify Treasury

immediately and the same shall constitute an Event of Default hereunder.

(1) HFA is an instrumentality ofthe State as indicated in Schedule A.

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

Agreement and any other closing documentation delivered to Treasury in connection with

this Agreement, and to perform its obligations hereunder and thereunder.

D. Representations and Warranties. The foregoing representations and warranties set

forth in this Section 2 are hereby qualified and/or limited by the provisions set forth in

Schedule D attached hereto and incorporated herein.

6-

TAMPNHPA - NevadalJ20208. J
3. Agreement to Purchase Financial Instrument; Payment of Purchase Price; Grant of

Security Interest

A. Treasury shall purchase, and Eligible Entity shall sell to Treasury, the Financial

Instrument that is executed and delivered by Eligible Entity in the form attached hereto as

Exhibit A, in consideration for the payment by Treasury of such amount as shall be set forth

in Schedule A as the Purchase Price (the "Purchase Price"). Payment of the Purchase Price

by Treasury shall be made in draws (each, a "Capital Draw" and collectively, the "Capital

Draws"). In order to make a Capital Draw, Eligible Entity shall submit to Treasury and its

designee a request for payment (a "Capital Draw Request") no less than ten (10) business

days prior to the date such Capital Draw is requested to be paid. Notwithstanding anything

in the Service Schedules to the contrary, Treasury shall not approve a Capital Draw Request

for a Capital Draw in an amount less than 2.5%, or more than 20%, of the Program

Pmiicipation Cap (defined below). In addition, no Capital Draw Requests shall be approved

by Treasury so long as Eligible Entity has HHF Program funds on hand of more than 5% of

the Program Participation Cap. The form of Capital Draw Request is attached hereto as

Exhibit C.

B. The conditions precedent Treasury's execution and delivery of this Agreement and

the payment by Treasury of the first Capital Draw are: (i) HFA's execution and delivery of

this Agreement with attached complete and approved Service Schedules, Exhibits and any

other closing documents, certificates or legal opinions as shall be required by Treasury to be

delivered by HFA; (ii) Eligible Entity's execution and delivery of this Agreement with

attached complete and approved Service Schedules, Exhibits, the Financial Instrument and

any other closing documents, certificates or legal opinions as shall be required by Treasury to

be delivered by Eligible Entity; (iii) the delivery of a legal opinion of counsel to HFA, which

may be internal legal counsel, in substantially the form attached hereto as Exhibit D-l; and

(iv) the delivery of a legal opinion of counsel to Eligible Entity, which may be internal legal

counsel, in substantially the form attached hereto as Exhibit D-2.

C. The conditions precedent to payment by Treasury of any subsequent Capital Draws

are: (i) delivery to Treasury and its designee of an executed and completed Capital Draw

Request using the form attached hereto as Exhibit C, without modification other than

completing requested information fields, and any certifications or information as may be

required by Treasury or its designee; (ii) the performance by Eligible Entity of the Services

described in the Service Schedules, in accordance with the terms and conditions of this

Agreement, to the satisfaction of Treasury; and (iii) the satisfaction by HFA and Eligible

Entity ofsuch other obligations as are set forth in this Agreement.

D. The value of this Agreement is limited to the amount set forth in Schedule A as the

Purchase Price (the "Program Participation Cap"). Accordingly, the aggregate Purchase

Price payable to Eligible Entity under this Agreement with respect to all Services described

on the Service Schedules may not exceed the amount ofthe Program Participation Cap.

E. In the event of a discrepancy or error in the amount of the Purchase Price paid

hereunder, at Treasury's election, (i) Eligible Entity shall remit to Treasury the amount of

any overpayment within ten (10) business days of receiving a refund request from Treasury,

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TAMPNHPA - Nevada1120208.1
or (ii) Treasury may offset the amount of the overpayment against the next Capital Draw,

upon written notice to Eligible Entity. It is understood that HFA shall not be required to

advance any funds pursuant to this subsection.

F. At the election of Treasury and with prior notice to Eligible Entity, Treasury may

deduct from any amount payable to Eligible Entity any amount that Eligible Entity or HFA is

obligated to reimburse Treasury or the United States government.

G. The proceeds of each Capital Draw shall be deposited in an account (the "Depository

Account") held by The Bank ofNew York Mellon or such other depository institution chosen

by Treasury in its sole discretion (the "Depository"), the account title, account number and

other identifying information for which are provided in Schedule A. The Depository

Account shall be used as Eligible Entity's operating account for its performance of the

Services and other obligations set forth in the Financial Instrument and this Agreement. As

security for the performance ofthe Services and the other obligations of Eligible Entity under

this Agreement and the Financial Instrument, Eligible Entity hereby grants to Treasury a first

lien priority security interest in the Depository Account and in any moneys, or investments, if

any, held therein. Eligible Entity shall enter into a deposit account control agreement with

Treasury and the Depository, in form and substance acceptable to Treasury. Eligible Entity

shall file a financing statement (and any continuation thereof required by law to maintain the

perfection of the lien) identifying Eligible Entity as "debtor," Treasury as "secured party"

and describing the Depository Account in the UCC filing office for perfecting nonpossessory security interests in tangible and intangible personal property of Eligible Entity or

such other filing offices as Treasury may require. Copies of all filings and continuation

statements shall be provided to Treasury promptly after filing. Funds held in the Depository

Account may be invested in: (i) Cash, (ii) bank deposits, (iii) United States Treasury

securities with maturities of not more than ninety (90) calendar days, (iv) money market

mutual funds that (a) are registered with the SEC and regulated under Rule 2a-7 promulgated

under the Investment Company Act of 1940 and (b) invested exclusively in direct obligations

of the United States of America or obligations the prompt payment of the principal of and

interest on which is unconditionally guaranteed by the United States of America and (v) any

other investment approved by Treasury in writing.

4. Oversight; Internal Control Program

A. HFA shall develop and maintain operational and performance metrics and maintain a

detailed financial reporting system to track, to the satisfaction of Treasury, homeowners

receiving assistance from Eligible Entity, including metrics used to measure the effectiveness

of the Services against the stated objectives of Treasury and HFA pursuant to the Service

Schedules. Such information shall be compiled into a report in a form that will be provided

by Treasury and may be modified from time to time as Treasury determines (the

"Performance Report"); provided that Treasury, in its sole discretion, may modify the form

of the Performance Report at any time. HFA shall submit the Performance RepOli to

Treasury or its designee on a periodic basis and as otherwise requested by Treasury and shall

also post the completed Performance Report to its website quarterly (based on a calendar

year) by the fifteenth (15th) day of the second month following the end of such quarter.

Treasury, in its sole discretion, may request that HFA modify its performance criteria or seek

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TAMPNHPA - Nevadal1202081
additional metrics as necessary. Treasury may make any or all data reported by HFA

available to the public. It is Treasury's policy not to release personal indentifying

information in its possession unless required to do so by law.

B. Eligible Entity shall develop, enforce and review on a qUalierly basis for

effectiveness, an internal control program designed to minimize the risk of fraud, mitigate

conflicts of interest, maximize operational efficiency and effectiveness and ensure effective

delivery of Services and compliance with this Agreement, EESA and Applicable Laws to the

satisfaction of Treasury (the "Internal Control Program"). The Internal Control Program

must include documentation of the control objectives for the Services, the associated control

techniques, and mechanisms for testing and validating the controls. Eligible Entity shall

monitor its contractors, if any, as part of the Internal Control Program. Eligible Entity shall

certify, and provide an independent verification of the effectiveness of the Internal Control

Program in accordance with a reporting form that will be provided by Treasury and may be

modified from time to time as Treasury determines, at least annually no later than one

hundred twenty (120) days after the end of Eligible Entity's fiscal year, including an

assessment prior to the initial distribution of funds to perform Services, or at a reasonable

time thereafter with the consent of Treasury, to ensure that Eligible Entity has taken

appropriate steps to meet the HHF Program objectives. Said independent verification may be

provided by a third party contractor or a governmental entity or department of the State so

long as such entity or department is separate and distinct from HFA and Eligible Entity (e.g.

the State Inspector General). Notwithstanding the foregoing, Eligible Entity shall be

permitted to seek approval from Treasury to make a Capital Draw to conduct a pilot or test of

celiain or all ofthe Services prior to full launch ofthe same.

C. HFA and Eligible Entity acknowledge that Treasury may develop and implement

practices to monitor and detect fraud related to loan modifications and any other programs

contemplated pursuant to the Services and to monitor compliance with applicable consumer

protection and fair lending laws, including among other laws, the Applicable Laws. HFA

and Eligible Entity covenant that they will fully and promptly cooperate with Treasury's

inquiries about any alleged, perceived or actual fraud and comply with any anti-fraud and

legal compliance procedures which Treasury may require.

D. HFA and Eligible Entity covenant that they will together develop and implement an

internal control program to ensure that HHF Program participants are meeting program

requirements; to monitor, detect and prevent loan modification fraud; and to monitor

compliance with applicable laws and regulations, including consumer protection and fair

lending laws, among other things (the "Internal Antifraud and Compliance Monitoring

Program"). The Internal Antifraud and Compliance Monitoring Program shall be developed

and complete within ninety (90) days from the Effective Date, unless Treasury, in its sole

discretion, consents to an extension of such time period. A copy of the plan for the Internal

Antifraud and Compliance Monitoring Program, including, but not limited to, the approach,

tools, techniques, staffing, cost and status of and time to implementation shall be submitted

to Treasury within the time period set forth in the preceding sentence. HFA and Eligible

Entity acknowledge that the Internal Antifraud and Compliance Monitoring Program will be

monitored as provided in this Agreement. Each of HFA and Eligible Entity shall notify

Treasury in writing if it desires to make any material modifications to its Internal Antifraud

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and Compliance Monitoring Program and the same shall be subject to Treasury's approval.

Additionally, HFA and Eligible Entity shall cooperate with Treasury with respect to its

findings and any inquiries based on any review by Treasury or its designee of the Internal

Antifraud and Compliance Monitoring Program or the results and data therefrom.

E. HFA and Eligible Entity shall provide Treasury or its designee with access to all

internal control reviews and reports that relate to the Services, including those proposed by

independent auditing firms, to enable Treasury to examine Eligible Entity and its contractors,

if any, for compliance with applicable provisions of EESA, the HHF Program, this

Agreement and Applicable Laws. A copy of the reviews and reports will be provided to

Treasury upon request.

F. HFA and Eligible Entity shall respond promptly to Treasury's request for information

regarding how the Eligible Entity's program(s) described in the Service Schedules will

interact with new or changed housing programs funded by EESA's Troubled Asset Relief

Program.

G. HFA shall provide annual audited financial statements to Treasury no later than one

hundred eighty (180) days after the end of its fiscal year, commencing with the first fiscal

year ending after the Effective Date. Eligible Entity shall provide (i) quarterly unaudited

financial statements to Treasury no later than forty-five (45) days after the end of each

quarter commencing with the first full quarter ending after the Effective Date and (ii) annual

audited financial statements to Treasury no later than one hundred twenty (120) days after the

end of its fiscal year, commencing with the first fiscal year ending after the Effective Date.

5. Term

A. The term of this Agreement shall begin on the Effective Date and extend to the End

of Term or earlier termination of this Agreement by Treasury pursuant to the provisions

hereof, or earlier suspension or termination ofthe Services by Treasury. Notwithstanding the

foregoing, it is understood and agreed that certain administrative, monitoring, reporting,

compliance and oversight obligations and requirements set forth in this Agreement and the

Financial Instrument survive the expiration or termination ofthis Agreement or End of Term,

and that funds are to be reserved as set forth in Schedule C to pay for the cost ofthe same.

B. This Agreement, or any of the Services implemented under this Agreement, may be

terminated by Treasury prior to the end ofthe Term pursuant to Section 6 below.

6. Defaults, Acts of Bad Faith and Early Termination; Remedies for and Effects of

Defaults, Acts of Bad Faith and Early Termination

A. The following constitute events of default by HFA or Eligible Entity under this

Agreement (each, an "Event of Default" and, collectively, the "Events of Default"):

(1) HFA or Eligible Entity breaches a covenant under this Agreement or fails to

perform or comply with any of its obligations under this Agreement in any material

respect, including any additional request made by Treasury as authorized herein, or the

Financial Instrument, including, but not limited to, circumstances in which Eligible Entity

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TAMPA/BPA - NevadaJ120208.1
fails to ensure that all eligibility criteria and other conditions precedent specified in this

Agreement or EESA are satisfied prior to accepting any portion of the Purchase Price

and/or effectuating any Services in connection with the HHF Program.

(2) HFA is dissolved or its existence as a unit or instrumentality of state government

is terminated (unless HFA's duties, responsibilities and obligations as the state's housing

finance agency, including specifically its duties, responsibilities and obligations under

this Agreement, are transferred to and assumed by a successor state unit or

instrumentality ofstate government approved by Treasury).

(3) Eligible Entity is dissolved or its legal existence is terminated (unless Eligible

Entity's duties, responsibilities and obligations under this Agreement, are transferred to

and assumed by a successor entity approved by Treasury).

(4) HFA or Eligible Entity: (a) ceases to do business as a going concern; (b) makes a

general assignment for the benefit of, or enters into any arrangement with creditors in lieu

thereof; (c) admits in writing its inability to pay its debts as they become due; (d) files a

voluntary petition under any bankruptcy or insolvency law or files a voluntary petition

under the reorganization or arrangement provisions of the laws of the United States or

any other jurisdiction; (e) authorizes, applies for or consents to the appointment of a

trustee or liquidator of all or substantially all of its assets; (f) has any substantial part of

its property subjected to a levy, seizure, assignment or sale for or by any creditor or

governmental agency; or (g) enters into an agreement or resolution to take any of the

foregoing actions.

(5) HFA, Eligible Entity, any employee or contractor of HFA or Eligible Entity, or

any employee or contractor of HFA's or Eligible Entity's contractors, commits a grossly

negligent or reckless act, or willful or intentional misconduct (including, but not limited

to, misrepresentation or fraud) in connection with the performance ofthe Services or this

Agreement.

(6) Any representation or warranty made by HFA or Eligible Entity in this

Agreement or any other certification provided pursuant to this Agreement, is or becomes

false, misleading, incorrect, or incomplete in any material respect.

(7) Any failure to remit overpaid funds to Treasury in accordance with Section 3(D).

(8) An evaluation of performance that includes any specific findings by Treasury that

HFA's or Eligible Entity's performance under any performance criteria set forth in the

Service Schedules is insufficient.

(9) Any misapplication of, or levy on, funds held in the Depository Account.

(10) An Act of Bad Faith (defined below) involving an HHF Recipient (defined below)

occurs, or is believed by Treasury to have occurred, in connection with the Services.

- 11 -

TAMPA/tIPA - Nevada/120208, I
B. Treasury, in its sole discretion, may take any or all of the following actions upon the

occurrence of an Event of Default:

(1) Treasury may withhold some or all of the Purchase Price until, in Treasury's

determination, HFA and/or Eligible Entity (as the case may be) has cured such Event of

Default.

(2) Treasury may: (i) reduce the amounts payable to Eligible Entity under Section 3;

and/or (ii) obtain repayment of prior payments made to Eligible Entity under Section 3 to

the extent that such funds have not been expended or irrevocably committed by Eligible

Entity.

(3) Treasury may require HFA and/or Eligible Entity to submit to additional

administrative oversight, including, but not limited to, additional compliance controls and

quality control reviews.

(4) Treasury may terminate this Agreement and cease its performance hereunder.

(5) Treasury may require HFA and/or Eligible Entity to submit to additional

information and reporting requirements with respect to its financial condition and ability

to continue to meet its obligations under this Agreement.

C. The following constitute acts of bad faith of servicers, lenders, borrowers, contractors

or any other recipient of HHF Program funds (individually, an "HHF Recipient" or

collectively "HHF Recipients") in connection with the Services (each, an "Act of Bad Faith"

and, collectively, the "Acts of Bad Faith"): an HHF Recipient commits a grossly negligent

act, willful or intentional misconduct, a reckless act (including, but not limited to,

misrepresentation or fraud), each in connection with any of the Services (including, but not

limited to, in connection with such HHF Recipient's response to questionnaires, the

execution or delivery to HFA or Eligible Entity or Treasury of any of the agreements relating

to such HHF Recipient's participation in the HHF Program and the production of suppOliing

documentation therefor and in connection with any audit or review by Treasury, its attorneys,

auditors or other consultants for compliance with the HHF Program requirements).

D. Treasury, in its sole discretion, may take any or all of the following actions if an Act

of Bad Faith involving an HHFRecipient occurs, or is believed by Treasury to have

occurred, in connection with the Services:

(1) Treasury may withhold all or any portion of the Purchase Price until, in

Treasury's determination, the Act of Bad Faith has been cured or otherwise remedied to

Treasury's satisfaction.

(2) Treasury may: (i) reduce the amounts payable to Eligible Entity under Section 3;

(ii) obtain repayment of any or all prior payments made to Eligible Entity under Section 3

to the extent that such funds have not been expended or irrevocably committed by HFA

or Eligible Entity; and/or (iii) work with Eligible Entity to obtain repayment from the

HHF Recipients who have committed the Act of Bad Faith.

- 12 - TAMPiVHPA - Nevada/I 20208. I
(3) Treasury may require HFA or Eligible Entity to submit to additional

administrative oversight, including, but not limited to, additional compliance controls and

quality control reviews.

(4) Treasury may terminate this Agreement and cease its performance hereunder if

Treasury believes that Acts of Bad Faith occur on a recurring basis, are widespread

among the HHF Recipients, or occur in combination or in connection with one or more

Events of Default by HFA or Eligible Entity.

(5) Treasury may require HFA and/or Eligible Entity to submit to additional

information and reporting requirements with respect to its financial condition and ability

to continue to meet its obligations under this Agreement.

E. In addition to the termination rights set forth above, Treasury may terminate this

Agreement immediately upon written notice to Eligible Entity:

(l) in the event of a merger, acquisition, sale of substantially all assets or other

ehange of control of Eligible Entity;

(2) in the event that a material term of this Agreement is determined to be prohibited

or unenforceable as referred to in Section 13.C; or

(3) in the event the Financial Instrument is deemed to be unenforceable in its entirety.

F. In the event that this Agreement is terminated in connection with an Event of Default

by HFA or Eligible Entity, no portion of the Purchase Price will be paid to Eligible Entity

subsequent to termination.

G. Treasury may reduce the amounts payable to Eligible Entity under Section 3, or

obtain repayment of prior Capital Draws made, in connection with: (a) an evaluation of

HFA's and Eligible Entity's performance that includes any specific findings that HFA's or

Eligible Entity's performance under any performance criteria set forth in the Service

Schedules is materially insufficient, or (b) any failure by HFA or Eligible Entity to comply

materially with any directive issued by Treasury with respect to documents or data requested,

findings made, or remedies established, by Treasury in conjunction with such performance

criteria or other HHF Program requirements; provided, however, Treasury will seek to obtain

repayment of prior Capital Draws made under Section 3 only with respect to Services that are

determined by Treasury to have been impacted by, or that Treasury believes may have been,

or may be, impacted by, the findings giving rise to this remedy. Treasury may initially avail

itself of this remedy in lieu of a specific declaration of an Event of Default; provided,

however, that doing so shall not preclude Treasury from later declaring an Event of Default

or exercising any other rights or remedies otherwise available to it under this Section 6, or at

law or in equity, in connection with the event giving rise to this remedy, or any future events

giving rise to this remedy. Notwithstanding anything in this Agreement to the contrary,

Treasury may withhold payment of all or a portion of the Purchase Price if it determines, in

its sole discretion, that Eligible Entity is incapable of performing the Services. It is

understood that HFA shall not be required to advance or repay funds to Treasury unless and

only to the extent that, HFA has received HHF Program funds from Eligible Entity and the

13 - TAMPNHPA Nevadal120208.1
same would not cause HFA to violate state law or its enabling legislation or governing

documents, as applicable, to do so.

H. The remedies available to Treasury upon an Event of Default or an Act of Bad Faith

under this Section are cumulative and not exclusive; further, these remedies are in addition

to, and not in lieu of, any other remedies available to Treasury at law or in equity.

1. In the event of the expiration or termination of this Agreement or any Service

implemented under this Agreement under any circumstances, HFA, Eligible Entity and

Treasury agree to cooperate with one another on an ongoing basis to ensure an effective and

orderly wind-down of the Services, including the provision of any information, reporting,

records and data required hereunder by Treasury.

1. Notwithstanding any provision to the contrary in this Agreement, temporary or

permanent forbearance on Capital Draws of funds by the Eligible Entity shall not, in and of

itself, constitute an Event of Default or an Act of Bad Faith by the HFA or the Eligible Entity

nor trigger a demand for repayment under this Section. The HFA or the Eligible Entity shall

provide Treasury with timely notice of any determination that such forbearance is necessary

and in such event Treasury may elect to reduce the Purchase Price to the aggregate of Capital

Draw Requests funded to date plus an amount for Administrative Expenses reasonably

required to comply with the surviving terms ofthis Agreement.

7. Governing Law; Venue

This Agreement shall be governed by and construed under Federal law and not the law of any

state or locality, without reference to or application of the conflicts of law principles; provided,

however, that the powers and authority of the HFA shall be governed by and construed in

accordance with the laws of its state. Any and all disputes between the parties that cannot be

settled by mutual agreement shall be resolved solely and exclusively in the United States Federal

courts located within the District of Columbia. All parties hereto consent to the jurisdiction and

venue ofsuch courts and irrevocably waive any objections thereto.

8. Notices

All legal notices, reports, requests, demands and other communications under this Agreement

shall be in writing and referred to each party's point of contact or to such other point of contact

at such other address as may be designated in writing by such party. Notices, reports, requests,

demands and other communications sent to Treasury shall be sent by email to all of the email

addresses listed below. Performance Reports and Capital Draw Requests shall be sent to Bank of

New York Mellon only by email at the address listed below. The names and addresses of HFAs

and Eligible Entity's points of contact are set forth in Schedule A. All such notices under this

Agreement sent to HFA or Eligible Entity shall be considered received: (a) when personally

delivered; (b) when delivered by commercial overnight courier with verification receipt; (c) three

(3) days after having been sent, postage prepaid, via certified mail, return receipt requested; or

(d) upon sending an email.

- 14 - 'rAMPA/HPA - Nevada/120208.1
Treasury Email Addresses: OFSChiefCounseINotices@do.treas.gov

HFAInnovation@do.treas.gov

tarp.compliance@do.treas.gov

Bank of New York Mellon: tarpcppclosing@bnymellon.com

9. Modifications

A. Subject to Section 9.B., modifications to this Agreement shall be In writing and

signed by Treasury, HFA and Eligible Entity.

B. Treasury reserves the right to unilaterally modify or supplement the terms and

provisions of this Agreement that relate (as determined by Treasury, in its discretion) to the

compliance and performance requirements of the HHF Program, and/or to technical,

administrative, or procedural matters or compliance and reporting requirements that may

impact the administration of the HHF Program. For the avoidance of doubt, reasonable

incremental administrative expenses of the HFA or Eligible Entity associated with such a

modification or supplement shall be Permitted Expenses.

C. In the event that Treasury agrees that (i) Eligible Entity may provide additional

services under the HHF Program (a "New Service"), or (ii) the Services described in the

Service Schedules shall be modified in any way, a replacement service schedule describing

such additional or modified services, in substantially the form ofthe Service Schedules shall

be executed and delivered by Eligible Entity. Concurrently with the delivery of such service

schedule, HFA and Eligible Entity shall execute and deliver any such certificates, documents

and/or legal opinions as may be required by Treasury. No additions, modifications or

amendments to the Services shall be made without Treasury's prior approval. Additionally,

Eligible Entity may not propose any New Service after September 1, 2010 without

Treasury's and the Office of Management and Budget's consent, which may be withheld in

either party's sole discretion.

10. Publicity

HFA and Eligible Entity shall consult with Treasury to develop a communication and outreach

strategy to ensure that any public messages related to the Services is consistent with the intent of

the HHF Program. HFA, Eligible Entity and their respective affiliates, subcontractors or

servicers shall notify Treasury at least two (2) business days in advance and provide a copy of

any proposed press releases (or other public statements) that refers to the HHF Program, their

participation therein or the results thereof. Treasury shall have the right to object to or modify

such press release or statement, in its sole discretion. In the event Treasury does not respond to

the press release or statement within such two (2) business day period then it shall be deemed

permissible to publish. This Section shall survive the termination or expiration of this

Agreement.

11. Limitation of Liability

IN NO EVENT SHALL TREASURY, OR ITS OFFICERS, EMPLOYEES, AGENTS OR

AFFILIATES BE LIABLE TO ELIGIBLE ENTITY WITH RESPECT TO THE SERVICES OR

- 15 -

TAMPA/HPA NevadaJJ20208.J
THIS AGREEMENT, OR FOR ANY ACT OR OMISSION OCCURRING IN CONNECTION

WITH THE FOREGOING, FOR ANY DAMAGES OF ANY KIND, INCLUDING, BUT NOT

LIMITED TO DIRECT DAMAGES, INDIRECT DAMAGES, LOST PROFITS, LOSS OF

BUSINESS, OR OTHER INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE

DAMAGES OF ANY NATURE OR UNDER ANY LEGAL THEORY WHATSOEVER,

EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF

WHETHER OR NOT THE DAMAGES WERE REASONABLY FORESEEABLE;

PROVIDED, HOWEVER, THAT THIS PROVISION SHALL NOT LIMIT TREASURY'S

OBLIGA1'1ON TO REMIT PURCHASE PRICE PAYMENTS TO ELIGIBLE ENTITY IN

ACCORDANCE WITH THIS AGREEMENT.

12. Indemnification

HFA and Eligible Entity agree respectively as set forth on Schedule E attached hereto and

incorporated herein.

13. Miscellaneous

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

incorporated herein by this reference.

B. This Agreement is not a Federal procurement contract and is therefore not subject to

the provisions of the Federal Property and Administrative Services Act (41 U.S.c. §§ 251-

260), the Federal Acquisition Regulations (48 CFR Chapter 1), or any other Federal

procurement law.

C. Any provision ofthis Agreement 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 this

Agreement, and no such prohibition or unenforceability in any jurisdiction shall invalidate

such provision in any other jurisdiction.

D. Failure on the part of Treasury to insist upon strict compliance with any of the terms

hereof shall not be deemed a waiver, nor will any waiver hereunder at any time be deemed a

waiver at any other time. No waiver will be valid unless in writing and signed by an

authorized officer of Treasury. No failure by Treasury to exercise any right, remedy, or

power hereunder will operate as a waiver thereof or operate as a course of dealing as to

which Eligible Entity may justifiably rely. The rights, remedies, and powers provided herein

are cumulative and not exhaustive of any rights, remedies, and powers provided by law.

E. This Agreement shall inure to the benefit of and be binding upon the parties to this

Agreement, and their permitted successors-in-interest. Treasury shall be permitted to assign

its interest in this Agreement without the prior consent of HFA or Eligible Entity. Neither

HFA, nor Eligible Entity shall be permitted to assign its interest in this Agreement without

the prior written consent ofTreasury, which may be withheld in Treasury's sole discretion.

F. This Agreement may be executed in two or more counterparts (and by different

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

- 16 - TAMPNl-lPA - Nevada/I 20208. I
shall constitute one and the same instrument. Facsimile or electronic copies of this

Agreement, together with the Financial Instrument, the Service Schedules, and any

certifications provided hereunder, shall be treated as originals for all purposes.

G. This Agreement, together with the Financial Instrument, Service Schedules, and the

Certifications, constitutes the entire agreement of the parties with respect to the subject

matter hereof.

H. Any provisions ofthis Agreement (including all documents incorporated by reference

thereto) that contemplate their continuing effectiveness, including, but not limited to,

Sections 2, 3, 4, 7, 10, 11, 12 and 13 of this Agreement, and the Financial Instrument, and

any other provisions (or portions thereof) in this Agreement that relate to, or may impact, the

ability of Treasury to fulfill its responsibilities in connection with the HHF Program, shall

survive the expiration or termination ofthis Agreement.

14. Defined Terms; Incorporation by Reference

A. All references to this "Agreement" necessarily include, in all instances, this

Agreement and all documents, exhibits and schedules incorporated into this Agreement by

reference, whether or not so noted contextually, and all amendments and modifications

,thereto. Specific references throughout this Agreement to individual documents that are

incorporated by reference into this Agreement are not inclusive of any other documents that

are incorporated by reference, unless so noted contextually.

B. The term "Effective Date" means the date indicated as the Closing Date on Schedule

A.

C. Exhibit A - Form of Financial Instrument, Exhibits B-1 and B-2 - Forms of

Certification, Exhibit C - Form of Capital Draw Request, Exhibit D-1 - Form of Legal

Opinion - FHA, Exhibit D-2 - Form of Legal Opinion - Eligible Entity (in each case, in form

and, upon completion, in substance), Schedule A - Basic Information, Schedule B - Service

Schedules, Schedule C - Permitted Expenses, Schedule D - Qualifications to Representations

and Warranties, Schedule E - Indemnification, including all amendments and modifications

thereto, are incorporated into this Agreement by this reference and given the same force and

effect as though fully set forth herein.

[SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE

INTENTIONALLY LEFT BLANK]

- 17 -

TAMPNHPA - Nevadall 20208. I
III Witness Wbel"eof, BFA, Eligible Entity and Treasury by their duly authorized offioials

hereby eltecute and deliver this Commitment to Purchase Financial Instrument and BFA

Participation Agreement as ofthe Effective Date.

HFA:

NEVADA HOUSING DIVISION

By: /s/ Charles L. Horsey

Name: Charles L. Horsey

Title: Administrator

ELIGffiLE ENTITY:

NEVADA AFFORDABLE HOUSING

ASSISTANCE CORPORATION

By: /s/ Lon A. DeWeese

Name: Lon A. DeWeese

Title: Secretary/Treasurer

TREASURY:

UNITED STATES DEPARTMENT OF THE

TREASURY

By:

Name; Herbert M. Allison, Jr.

Title: Assistant Secretary for

Financial Stability

[Signature Page to Commitment to Purchase Financi.llnstrument and HFA Participation Agreement- Nevada]
In Witness Whereof, HFA, Eligible Entity and Treasury by their duly authorized officials

hereby execute and deliver this Commitment to Purchase Financial Instrument and HFA

Participation Agreement as ofthe Effective Date.

HFA:

NEVADA HOUSING DIVISION

By:

Name:

Title:

ELIGIBLE ENTITY:

NEVADA AFFORDABLE HOUSING

ASSISTANCE CORPORAnON

By:

Name:

Title:

TREASURY:

UNITED STATES DEPARTMENT OF THE

TREASURY

By:

Name: Herbert M. Allison, Jr.

Title: Assistant Secretary fo

Financial Stability

[Signature Page to Commitment to Purchase Financial Instrument and BFA Participation Agreement - Nevada]
Exhibit A

Exhibit B-1

Exhibit B-2

Exhibit C

Exhibit D-l

Exhibit D-2

Schedule A

Schedule B

Schedule C

Schedule D

Schedule E

Form of Financial Instrument

Form of HFA Certification

Form of Eligible Entity Certification

Form of Capital Draw Request

Form of Legal Opinion - HFA

Form of Legal Opinion - Eligible Entity

Basic Information

Service Schedules

Permitted Expenses

Qualifications to Representations and Warranties

Indemnification

TAMPA/HPA Nevada/l 20208. I
EXHIBIT A

FORM OF FINANCIAL INSTRUMENT

This Financial Instrument is delivered by the undersigned party ("Eligible Entity") as provided in

Section 1 of the Commitment to Purchase Financial Instrument and HFA Participation

Agreement (the "Agreement"), entered into as of the Effective Date, by and among the United

States Department of the Treasury ("Treasury"), the party designated as HFA in the Agreement

("HFA") and Eligible Entity. This Financial Instrument is effective as ofthe Effective Date. All

of the capitalized tenns that are used but not defined herein shall have the meanings ascribed to

them in the Agreement.

For good and valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, Eligible Entity agrees as follows:

1. Eligible Entity Obligation; Purchase Price Consideration.

(a) Eligible Entity shall perform all Services described in the Service Schedules in

consideration for the Purchase Price described in subsection (b) below, in

accordance with the terms and conditions of the Agreement, to the satisfaction of

Treasury. The conditions precedent to the payment by Treasury of the Purchase

Price with respect to the Services are set forth in Section 3(B) ofthe Agreement.

(b) This Financial Instrument is being purchased by Treasury pursuant to Section 3 of

the Agreement through the payment by Treasury of various payments referred to

collectively in the Agreement as the "Purchase Price". This Financial Instrument

is being purchased by Treasury in connection with Eligible Entity's participation

in the Housing Finance Agency Innovation Fund for the Hardest Hit Housing

Markets program (the "HHF Program") created under the Emergency Economic

Stabilization Act of 2008 (P.L. 110-343), as amended, as the same may be

amended from time to time ("EESA").

2. Repayment of Purchase Price. In the event a recipient of HHF Program funds repays any

or all ofthe funds received from Eligible Entity in connection with the Services, Eligible

Entity shall use such funds as follows:

(a) First, if such funds are repaid during the Term, Eligible Entity shall use such

repaid funds to continue to provide Services to other eligible homeowners.

(b) Second, if such funds are repaid after the termination or expiration of the Term,

Eligible Entity shall use such repaid amounts to replenish the required reserve for

administrative expenses until the reserve amount indicated on the Service

Schedule for such year is satisfied.

(c) Third, ifsuch funds are repaid after the termination or expiration of the Term, and

no amounts are required to replenish the required reserve for administrative

expenses pursuant to Section 2(b) above, Eligible Entity shall remit such funds to

Treasury, monthly on the 15th day of each month or first business day thereafter.

TAMPA/I-II)A Nevadal120208.1
3. Final Repayment. In the event Eligible Entity is holding any HHF Programs funds,

including, but not limited to, excess cash and amounts on deposit in the administrative

reserve, as of December 31, 2017, such funds shall be returned to Treasury or its designee

prior to 1:00 p.m. Eastern Standard Time on December 31, 2017.

4. Security Interest. As security for the performance of the Services and the other

obligations of Eligible Entity under the Agreement, as such obligations are evidenced in

this Financial Instrument, Eligible Entity has granted to Treasury a first lien priority

security interest in the Depository Account and in any moneys, or investments, if any,

held therein.

5. Representations, Warranties and Covenants. Eligible Entity represents and warrants that

the representations and warranties set forth in the Agreement, on the date hereof, are, and

on the date of each Capital Draw hereunder, shall be, true, correct, accurate and complete

in all material respects. The truth and accuracy of such representations and warranties

are continuing obligations of Eligible Entity. Additionally, all covenants of Eligible

Entity set forth in Section 2 of the Agreement are incorporated herein by reference and

Eligible Entity, on the date hereof, is not, and on the date of each Capital Draw

hereunder, shall not be in breach of any such covenants. In the event that any of the

representations or warranties made herein or in the Agreement cease to be true and

correct, or the Eligible Entity breaches any of the covenants made herein or in the

Agreement, Eligible Entity agrees to notify Treasury immediately and the same shall

constitute an Event of Default hereunder.

6. Limitation of Liability

IN NO EVENT SHALL TREASURY, OR ITS OFFICERS, EMPLOYEES, AGENTS

OR AFFILIATES BE LIABLE TO ELIGIBLE ENTITY WITH RESPECT TO THE

SERVICES OR THE AGREEMENT, OR FOR ANY ACT OR OMISSION

OCCURRING IN CONNECTION WITH THE FOREGOING, FOR ANY DAMAGES

OF ANY KIND, INCLUDING, BUT NOT LIMITED TO DIRECT DAMAGES,

INDIRECT DAMAGES, LOST PROFITS, LOSS OF BUSINESS, OR OTHER

INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF ANY

NATURE OR UNDER ANY LEGAL THEORY WHATSOEVER, EVEN IF ADVISED

OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF WHETHER

OR NOT THE DAMAGES WERE REASONABLY FORESEEABLE; PROVIDED,

HOWEVER, THAT THIS PROVISION SHALL NOT LIMIT TREASURY'S

OBLIGATION TO REMIT PURCHASE PRICE PAYMENTS TO ELIGIBLE ENTITY

IN ACCORDANCE WITH THE AGREEMENT.

7. Indemnification

Eligible Entity agrees as set forth on Schedule E to the Agreement, which Schedule E is

hereby incorporated into this Financial Instrument by reference.

TAMPNHPA - Nevadal120208.1
IN WITNESS WHEREOF, Eligible Entity hereby executes this Financial Instrument on the date

set forth below.

[INSERT FULL LEGAL NAME OF ELIGIBLE ENTITY]

By:

Name:---------- Title:

Date: ______,2010

TAMPAlHPA - NevadaJ120208.1
EXHIBIT B-1

"FORM OF HFA CERTIFICATION

This Certification is delivered as required by Section 2.A(l5) of that certain Commitment to

Purchase Financial Instrument and HFA Participation Agreement (the "Agreement"), effective as

of [INSERT CLOSING DATE], by and among the United States Department of the Treasury

("Treasury"), the undersigned party ("HFA") and the institution party thereto ("Eligible Entity").

All terms used, but not defined herein, shall have the meanings ascribed to them in the

Agreement.

HFA hereby certifies, represents and warrants as of the date hereof that each of the

representations and warranties of HFA contained in the Agreement are true, conect, accurate and

complete in all material respects as of the date hereof. All covenants of HFA contained in the

Agreement shall remain in full force and effect and HFA is not in breach of any such covenant.

Eligible Entity does not have HHF Program funds on hand of more than

[INSERT AN AMOUNT EQUAL TO 5% OF THE PROGRAM PARTICIPATION CAP]

HFA knows of no material deficiencies in the Internal Antifraud and Compliance Monitoring

Program.

In the event that any part ofthe certification made herein is discovered not to be true and correct,

HFA agrees to notify Treasury immediately.

[INSERT FULL LEGAL NAME OF HFA]:

[Name of Authorized Official]

[Title of Authorized Official]

TAMPNHPA - Nevada/120208.1

Date
FORM OF ELIGIBLE ENTITY CERTIFICATION

This Celiification is delivered as required by Section 2.A(l5) of the Commitment to Purchase

Financial Instrument and HFA Participation Agreement (the "Agreement"), effective as of

[INSERT CLOSING DATE], by and among the United States Department of the Treasury

("Treasury"), the pmiy designated as HFA in the Agreement and the undersigned party ("Eligible

Entity"). All terms used, but not defined herein, shall have the meanings ascribed to them in the

Agreement.

Eligible Entity hereby certifies, represents and warrants as of the date hereof that each of the

representations and warranties of Eligible Entity contained in the Agreement are true, correct,

accurate and complete in all material respects as of the date hereof. All covenants of Eligible

Entity contained in the Agreement shall remain in full force and effect and Eligible Entity is not

in breach of any such covenant.

Eligible Entity does not have HHF Program funds on hand of more than

[INSERT AN AMOUNT EQUAL TO 5% OF THE PROGRAM PARTICIPATION CAP]

Eligible Entity knows of no material deficiencies in the Internal Control Program or the Internal

Antifraud and Compliance Monitoring Program.

In the event that any part ofthe certification made herein is discovered not to be true and correct,

Eligible Entity agrees to notify Treasury immediately.

[INSERT FULL LEGAL NAME OF ELIGIBLE ENTITY]:

[Name of Authorized Official]

[Title of Authorized Official]

TAMPAiHPA - Nevada/120208.1

Date
FORM OF CAPITAL DRAW REQUEST

[insert date]

The Bank of New York Mellon

tarpcppclosing@bnymellon.com

Attn: Matthew Sabino

The United States Department ofthe Treasury

oFSChiefCounselNotices@do.treas.gov

HFAInnovation@do.treas.gov

tarp.compliance@do.treas.gov

Attention: HFA Hardest Hit Fund

Ladies/Gentlemen:

Reference is made to the Commitment to Purchase Financial Instrument and HFA

Participation Agreement dated as of the date set forth on Schedule A thereto (as amended,

supplemented or otherwise modified and in effect from time to time, the "HPA") by and among

[insert HFA name] ("HFA"), [insert Eligible Entity name] ("Eligible Entity") and the United

States Department of the Treasury ("Treasury"). Reference is also made to the Financial

Instrument dated the date set fOlih on Schedule A to the HPA delivered by Eligible Entity to

Treasury (the "Financial Instrument"). Capitalized terms used but not otherwise defined herein

shall have the meaning given them in the HPA.

In accordance with Section 3.A. of the HPA, the undersigned Eligible Entity hereby

requests that The Bank of New York Mellon ("BNYM"), on behalf of Treasury, disburse the

amounts set forth on the attached Capital Draw Schedule as a Capital Draw against the Purchase

Price as described in the HPA to Eligible Entity on [insert date] (the "Funding Date").

HFA and Eligible Entity, as applicable, hereby certify to Treasury and BNYM, as of the

date hereof and on the Funding Date, that:

(a) no default or Event of Default has occurred and is continuing as of the date hereof

and on the Funding Date [other than J

(b) each of the representations and warranties made by HFA and Eligible Entity in the

HPA and Financial Instrument are true and correct on and as of such date, as if made

on and as ofthe date hereof and on the Funding Date [other than ._J'

(c) HFA and Eligible Entity are in compliance with the covenants and other agreements

set forth in the HPA and Financial Instrument, which shall remain in full force and

effect [other than J

TAMPA/fWA - Nevada/I 20208. I
(d) all data and information set forth in this Capital Draw Request, including the Capital

Draw Schedule, is true and correct in all respects; and

(e) to our knowledge, there have been no Acts of Bad Faith by any HHF Recipient [other

than -------'

In the event that any part of the certification made herein is discovered not to be true and

correct after the date hereof, HFA or Eligible Entity, as applicable, shall notify Treasury

immediately.

[INSERT FULL LEGAL NAME OF HFA]

[Name of Authorized Official]

[Title of Authorized Official]

[INSERT FULL LEGAL NAME OF ELIGIBLE ENTITY]

[Name of Authorized Official]

[Title of Authorized Official]

TAMPNHPA - Nevadal!20208.!
CAPITAL DRAW SCHEDULE

Capital Draw Request for:

r 1Program $

r 1Program $.

[ ] Program $.

Permitted Administrative Expenses $.

Total Capital Draw Request $

Total Capital Draw Request as a Percentage of Program Participation Cap I: .%

Total Purchase Price funded to date, including current Capital Draw: $

Program Participation Cap: $

Program Funds Remaining: $

Amount of HHF Program funds on hand prior to this Capital Draw: $.

HHF Program funds on hand prior to this Capital Draw as a Percentage of %

Program Participation Cap2: --

I May not be less than 2.5% nor exceed 20%.

2 May not exceed 5.0% on the date of submission of the Draw Request.

Depository Account InformationlWire Instructions

for payment of Capital Draw:

TAMPA/HPA - Nevada/120208.1
EXHIBIT D-l

FORM OF LEGAL OPINION - HFA

[Customary introduction/qualifications]

1. HFA has been duly created and is validly existing as a under the laws of the

State

2. HFA has duly authorized the execution and delivery of the Agreement, and no further approval or

authorization is required by HFA.

3. HFA has the power and authority to execute and deliver the Agreement and to perform its

obligations thereunder.

4. The Agreement has been duly executed and delivered by HFA and, assuming due authorization,

execution and delivery by the other parties thereto, constitutes a valid, legal and binding obligation of

HFA, enforceable against HFA in accordance with its terms, except as the same may be limited by

applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement

of creditors' rights generally and general equitable principles, regardless of whether such enforceability is

considered in a proceeding at law or in equity.

5. The execution and delivery by HFA of the Agreement and the performance by HFA of its

obligations thereunder do not and will not: (i) violate the [organizational documents/Enabling Act] of

HFA, (ii) to the best of our knowledge, after due inquiry, constitute a breach of or a default under any

agreements or other instruments to which HFA is a party, (iii) to the best of our knowledge, after due

inquiry, violate any judgment, decree or order of any cOUli or administrative tribunal to which HFA is

subject, or (iv) violate any Applicable Laws.

6. No consent, approval, authorization or other action by, or filing or registration with, any

governmental authority of the United States or the State of or any other entity having

jurisdiction over HFA is required to be obtained prior to the execution and delivery of the Agreement or

to perform the obligations contemplated thereby other than those consents, approvals, authorizations,

filings, actions and registrations which have been obtained as ofthe date hereof.

7. HFA has obtained all necessary permits and licenses to perform its obligations under the

Agreement.

8. There is no action, suit or proceeding, at law or in equity, or by or before any court or

governmental agency, now pending or, to our knowledge, overtly threatened in writing against HFA that

challenges the validity or enforceability of, or that seeks to enjoin the performance of, or seeks damages

with respect to the Agreements or any of HFA's obligations thereunder.

TAMPA/HPA Nevadal120208.1
EXHIBIT D-2

FORM OF LEGAL OPINION - ELIGIBLE ENTITY

[Customary introduction/qualifications]

1. Eligible Entity has been duly incorporated and is validly existing as a and

is in good standing under the laws ofthe State

2. Eligible Entity has duly authorized the execution and delivery of the Agreement and the Financial

Instrument by all necessary [corporate] action, and no further approval or authorization is required by

Eligible Entity.

3. Eligible Entity has the power and authority to execute and deliver the Agreement and the Financial

Instrument and to perform its obligations thereunder.

4. Each of the Agreement and the Financial Instrument has been duly executed and delivered by

Eligible Entity and, assuming due authorization, execution and delivery by the other parties thereto, each

constitutes a valid, legal and binding obligation of Eligible Entity, enforceable against Eligible Entity in

accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency,

reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and

general equitable principles, regardless of whether such enforceability is considered in a proceeding at

law or in equity.

5. The execution and delivery by Eligible Entity of the Agreement and the Financial Instrument and

the performance by Eligible Entity of its obligations thereunder do not and will not: (i) violate the

[organizational documents] of Eligible Entity, (ii) to the best of our knowledge, after due inquiry,

constitute a breach of or a default under any agreements or other instruments to which Eligible Entity is a

party, (iii) to the best of our knowledge, after due inquiry, violate any judgment, decree or order of any

court or administrative tribunal to which Eligible Entity is subject, or (iv) violate any Applicable Laws.

6. No consent, approval, authorization or other action by, or filing or registration with, any

governmental authority of the United States or the State of or any other entity having

jurisdiction over Eligible Entity is required to be obtained prior to the execution and delivery of the

Agreement and the Financial Instrument or to perform the Services contemplated thereby other than those

consents, approvals, authorizations, filings, actions and registrations which have been obtained as of the

date hereof.

7. Eligible Entity has obtained all necessary permits and licenses to perform the Services it is

obligated to perform under the Agreement.

8. There is no action, suit or proceeding, at law or in equity, or by or before any court or

governmental agency, now pending Of, to our knowledge, overtly threatened in writing against Eligible

Entity that challenges the validity or enforceability of, or that seeks to enjoin the performance of, or seeks

damages with respect to, the Agreement, the Financial Instrument or the Services.

TAMPNHPA NevadaJ120208.1
SCHEDULE A

BASIC INFORMATION

Eligible Entity Information:

Name ofthe Eligible Entity: Nevada Affordable Housing Assistance Corporation

Corporate or other organizational form: Non-profit corporation

Jurisdiction of organization:

Notice Infonnation:

!-IFA Information:

NameofHFA:

. Organizational form:

Date of Application:

Notice Information:

Program Participation Cap:

Closing Date:

Nevada

Nevada Housing DivisionI

A Division of the Nevada Department of Business

and Industry ofthe State ofNevada

April, 2010

$102,800,000

June 23,2010

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

ACCOWlt Control Agreement between

Treasury and Eligible Entity regarding the

HHF Program.

I See attached Schedule A-I that Is attached to, and forms a part ofthis Agreement,

TAMPA/HPA - NevadaJ120208.1

---------
SCHEDULEB

SERVICE SCHEDULES

The attached Service Schedules (numbered sequentially as Service Schedule B-1, Service

Schedule B-2, et. seq.) together comprise Schedule B to that certain Commitment to Purchase

Financial Instrument and HFA Participation Agreement, entered into as of the Effeetive Date, by

and among the United States Department ofthe Treasury and the undersigned parties.

TAMPAlHPA Ncvacla/l20208.1
The Nevada Affordable Housing Assistance Corporation

PRINCIPAL REDUCTION PROGRAM

Summary Guidelines

1. Program Overview

2. Program Goals

3. Target

Population/Areas

4. Program Allocation

(Excluding

Administrative

Expenses)

5. Borrower Eligibility

Criteria

TAMPAlHPA - Nevadal!20208.!

To ensure that nearly 2,500 Nevada families are able to stay in

their homes with a permanent change to their mortgages via

principal reductions which will provide qualified homeowners a

principal reduction of up to $25,000, with a 1: 1 match from the

note holder if possible. The 1

51 Mortgage Principal Reduction

program will assist the underemployed, mcome restricted

homeowner candidates to keep occupancy and ownership of their

home.

The primary goal is to reduce first mortgage principal balances

with respect to at least 2,500 homeowners throughout the State of

Nevada such that their loan to value ratios are reduced to 115% or

less and correspondingly, the PITI payment reduced to 31 % or

less ofthe homeowner's gross income.

The funding will be distributed via a geographic formula of

1/3+1/3+1/3 weight for unemployment + foreclosure rate +

population. There will be target population segmentation into (a)

the Clark County/Las Vegas valley area, (b) the Reno-Sparks

SMSA area and (c) all of rural Nevada. Where a finer breakdown

is possible within each of the three geographic areas, zip code and

census track targeting will be utilized.

$59.7 million.

it Legal US Resident

• Resident in Nevada 5 years in same dwelling

• Any cash out borrowing in past five years must be limited to:

• Home improvement - real, not personal property

classification

• Medical bills - documented

41 Paying off existing revolving debt - documented

• Current income does not exceed 120% of Area Median

Income (2010)

• Borrower must be facing eminent default, if delinquent

cannot be more than 6 months maximum - target to be 3

months maximum

• Delinquency based on a financial hardship due to

circumstances beyond the homeowner's control (no contrived

defaults allowed). Borrower will be I 1 to !-,lV' Id-., a
6. PropertylLoan

Eligibility Criteria

7. Program Exclusions

financial hardship affidavit. Eligible hardships to include but

not limited to the following:

• Underemployment

• Illness, disability or death of wage earner in family in

posseSSIOn

It Divorce or legal separation

Eligibility criteria will be analyzed either on-line by the

borrower's visit to the web site and using the 'screening tool' or

directly at the intake pOlial of the contract agents (foreclosure

mitigation and mediation agencies). If applicants meet screening

criteria, application packages will be assembled and forwarded

onto the NAHAC underwriters who will do the full

verifications/confirmation and begin the relationship with the

participating banks/lenders/servicers to work through the

calculation of aid levels.

Funding will be provided on a first come-first-served basis within

each geographical zone. Daily monitoring of funding

commitments/pipelines by zone will allow sufficient trend

evidence to allow for sufficient lead time to 'cut-off further

funding commitments what might exceed available resources.

• Owner occupied

• Must have only one existing mortgage

• Principal balance must not exceed 115% based upon current

appraisal following principal balance reduction nor PITI

exceed 31 %

• Current mortgage cannot be secured by one of the following

entities FHA/VA, Fannie Mae, Freddie Mac if the existing

loan qualifies for one of those entities existing programs

(direct lender program option must be exhausted first).

• All modified mortgages will be changed to fixed rate 30 year

or longer mortgages.

The higher Targeted Area limit calculation will be utilized (115%

of area median) Thus, the current limits per the HUD Procedure,

the Clark County limit would be at $427,184 for the Reno/Sparks

SMSA the limit would be $431,189 and for the rural Nevada

areas, the price limit would be $347,087.

Having failed a HAMP loan temporary period by voluntary noncompliance, as determined by Eligible Entity.

8. Structure of Assistance I Assistance will be structured as a forgivable loan in favor of the

. Eligible Entity secured by a lien on the property. Borrowers who

TAMPNHPA - Nevada/I 20208. I
9. Per Household

Assistance

10. Duration of Assistance

11. Estimated Number of

Participating

Households

12. Program Inception/

Duration

13. Program Interactions

with Other HFA

Programs

14. Program Interactions

with HAMP

TAMPAfHPA NevadaJl 20208. I

follow through and earn the loan forgiveness will not be required

to repay their principal reduction loans. The earned forgiveness

loan will amortize on a straight-line basis of 1/36 per month. A

recapture of up to 20% ofthe note will be invoked in the event the

home is sold in months 37 through 60 post-closing of the recast

mortgage. The recapture provision will self extinguish on the first

day ofthe 61 st month.

The maximum amount receivable by a qualified borrower is

$25,000 assuming a $1 :$1 match is occurring from the banks or

GSEs. The median amount is expected to be close to the

maximum (skewed right poisson distribution) amount. It is

possible that there could be a bimodal distribution. Thus, if there

are numerous HAMP fails of under $10,000 that this level of

assistance or less represents a large (disproportionate) share ofthe

distribution of aid in the principal reduction program. Therefore,

in this scenario there will be a large portion under $10,000 and a

large portion of applicants at the full $25,000 level and very few

in between.

Borrower participation in Program is a one time payment.

Assuming a $1 for $1 level of matching principal reduction

assistance is achieved in conjunction with the loan servicers,

approximately 2,468 households could be assisted under this

Program. Should there be the bi-model distribution (as referenced

in #9 above) the number of households assisted could exceed

5,000.

The planned implementation will be directly impacted by the time

needed to secure agreements/contracts for lender matching and

could take up to 75 days from the approval of the program to have

agreements in place and begin flowing clients through the

screemng process.

This Program could last up to 24 months.

The 1st mortgage principal reduction program is aimed at the

underemployed population of income qualified/limited home

owners, not the unemployed. Thus, it IS possible that a

homeowner could receive a 1st mortgage principal reduction

through this Program and then subsequently lose their job and

eventually need a shOli-sale assistance program through another

NAHAC HHF Program.

NAHAC expects an active interface with the HAMP program.

During the 'in-take' process, the applicants will be screened for

HAMP eligibility and where it is indicated that a borrower would
15. Program Leverage

with Other Financial

Resources

TAMPAJHPA - NevadaJ120208, I

be eligible, they will channeled into a HAMP loan modification.

Where there is a HAMP failure of <=$10,000 or less, then this

program element will be accessed to accommodate the HAMP

'pass'. Additionally, if someone does not qualify for a HAMP or

has a 'fails' >=$10,000 then the applicant will be directed into the

regular HAFA program. If the applicant needed added HAFA

type of assistance, then NAHAC's Short-Sale program will be

utilized.

It is also quite possible that a homeowner may receive a 2nd lien

reduction and subsequently qualify for either a HAMP

modification in need of supplementation or a regular 1

51 mortgage

principal reduction program.

Nevada will endeavor to get applicable servicer/lenders to match

on a $1 for $1 basis. This programmatic goal will form the basis

of all SerVICeI' agreements if possible. However, if the

servicer/lender is unable to agree to a $1 for $1 arrangement, a

lesser match may be acceptable. The matching funds will be

provided at closing. Nevada will also request that the loan

serviceI' waive certain fees like late charges, delinquency fee and

penalties and recast the principal reduced loan and participate in

its recordation.
The Nevada Affordable Housing Assistance Corporation

SECOND MORTGAGE REDUCTION PLAN

Guidelines

1. Program Overview

2. Program Goals

3. Target

Population/Areas

4. Program Allocation

(Excluding

Administrative

Expenses)

5. Borrower Eligibility

Criteria

TAMPNHPA NevadaJ120208.1

The Second Mortgage Reduction plan is aimed at assIstmg

borrowers who have a second lien interfering with either a shortsale or modification of the first mortgage. The expected applicant

pool is believed to be both unemployed and underemployed

families.

The expected outcome of this program is to assist up to 1,200

families remove the impediment of a second lien on their property

such that either a refinancing or first mortgage modification can

be carried out and thus prevent a foreclosure.

The funding will be distributed via a geographic formula of

1/3+1/3+1/3 weight for unemployment + foreclosure rate +

population. There will be target population segmentation into (a)

the Clark County/Las Vegas valley area, (b) the Reno-Sparks

SMSA area and (c) all of rural Nevada. Where a finer breakdown

is possible within each of the three geographic areas, zip code and

census track targeting will be utilized.

$20.1 million.

• Legal US Resident

• Resident in Nevada 5 years in same dwelling

• Any cash out borrowing in past five years must be limited to:

• Home improvement - real, not personal property

classification

• Medical bills - documented

• Paying off existing revolving debt -documented

• Current income does not exceed 120% of Area Median

Income (2010)

• Borrower must be facing eminent default, if delinquent

cannot be more than 6 months maximum - target to be 3

months maximum

\It Delinquency based on a financial hardship due to

circumstances beyond the homeowner's control (no contrived

defaults allowed). Borrower will be required to provide a

financial hardship affidavit. Eligible hardships to include but

not limited to the following:

• U y llllwlll
6. Property/Loan

Eligibility Criteria

7. Program Exclusions

8. Structure of Assistance

TAMPAlHPA - Nevadall 20208. I

III Illness, disability or death of wage earner in family in

possession

1Il Divorce or legal separation

Eligibility criteria will be analyzed either on-line by the

borrower's visit to the web site and using the 'screening tool' or

directly at the intake portal of the contract agents (foreclosure

mitigation and mediation agencies). If applicants meet screening

criteria, application packages will be assembled and forwarded

onto the NAHAC underwriters who will do the full

verifications/confirmation and begin the relationship with the

participating banks/lenders/servicers to work through the

calculation of aid levels.

Funding will be provided on a first come-first-served basis within

each geographical zone. Daily monitoring of funding

commitments/pipelines by zone will allow sufficient trend

evidence to allow for sufficient lead time to 'cut-off' further

funding commitments what might exceed available resources.

• Owner occupied

• Must have only one existing mortgage and a 2nd lien

• Principal balance must not exceed 115% based upon current

appraisal following principal balance reduction nor PITI

exceed 31%

• All 2nd liens obtaining relief through this program element

will have an accompanying lien release and waiver of

deficiency judgment rights.

• The maximum 2nd lien size eligible for relief under this

program element must be equal to or less than $41,250.

• First mortgage must be per HUD Rev Procedure 2009-18.

The higher Targeted Area limit calculation will be utilized

(115% of area median).

Exclusions will be for people who took out 2nd liens for reasons

other than those listed above under the Borrower Eligibility

Criteria. Additionally, if a second lien exceeds the program limit

of $41,250 or program contribution of >$16,500 then the

borrower would be ineligible.

Assistance will be structured as a forgivable loan in favor of the

Eligible Entity secured by a lien on the property. Borrowers who

follow through and earn the loan forgiveness will not be required

to repay their principal reduction loans. The earned forgiveness

loan will amortize on a straight-line basis of 1/36 per month. A

recapture of up to 20% ofthe note will be invoked in the event the

home is sold in months 37 through 60 post-closing of the recast
9. Per Household

Assistance

10. Duration of Assistance

11. Estimated Number of

Participating

Households

12. Program Inception/

Duration

13. Program Interactions

with Other HFA

Programs

14. Program Interactions

with HAMP

mortgage. The recapture provision will self extinguish on the first

day ofthe 61 5t month.

The maximum amount of 2ml mortgage lien relief from the

program will be $16,500 toward removal of liens whose value is

<=$41,250.

The 2nd lien elimination program will be a one time payment

program.

It is estimated that up to 1,246 applicants/families could receive

2nd lien relief under this program. If the level of lender

participation exceeds 60% versus the program's 40% or the

average program funding level averages less than the maximum

of $16,500 in necessary funding to create the 2nd lien relief, then

there could be an increase in the number of borrowers assisted.

The Principal Reduction Program will be available to borrowers

within 3 months after approval by Treasury and could last up to 2

years, with an outside date ofJuly 30th 2012.

None.

The program will have an active interface with the HAMP

program. During the 'in-take' process with the foreclosure

mitigation/mediation agencies, the applicants will be screened for

HAMP eligibility and where it is indicated that a borrower would

be eligible, they will channeled into a HAMP loan modification.

If the applicant needs 2nd lien relief in order to effectuate a HAMP

or 1

5t mortgage principal reduction program process then the 2nd

lien relief element will be utilized. NAHAC wishes to

supplement and complement the federal programs and where

needed to create added funds flow to ensure long term solutions

to the borrower's need.

15. Program Leverage

with Other Financial

Resources

The basis of the 2nd lien relief program is to 'free up' the first

mortgage note holder to complete the necessary modification to

keep the borrower current and in their home. In order to leverage

the 2nd lien relief funds, the program requires participating lenders

1

__ to contribute $0.60 for each $0.40 contributed by this program.

Additionally, if the lending institution whose 2nd lien is being

relieved also holds the 1st mortgage, they (note holder) would

_________----L_h_a_v_e_t_o_c_'o_n_tr_i_b_ut_e_$_0_._5_0_t_o_e__a_c_h_d_o__l.l_a_r_o_f_l_s_t_m_o_r_t""ga--,g""-.e---,,--p_ri_n_ci-,,-p_a--1l

TAMPA/HPA Nevada/120208.1
TAMPNHPA Ncvadal120208.1

relief from NAHAC's other HHF programs. The matching funds

will be provided at closing.
The Nevada Affordable Housing Assistance Corporation

SHORT-SALE ACCELERATION PROGRAM

J Guidelines

1. Program Overview

2. Program Goals

3. Target

Population/Areas

4. Program Allocation

(Excluding

Administrative

Expenses)

5. Borrower Eligibility

Criteria

TAMPNHPA· Nevadal120208.1

The Short-sale Acceleration Program IS aimed at assIstmg

borrowers who are beginning or need to initiate the short-sale

process to relieve themselves of the mortgage burdens that they

cannot sustain-even with a material loan principal reduction.

It is expected that at a $8,025 level of average funding per family

assisted up to 1,371 families facing immanent foreclosure threat

due to unemployment, will have the burden of their home

mortgage eliminated and the threats of a default judgment

removed.

Unemployed population of Nevada (189,000 in February or

13.9% level) who are facing eminent threat of foreclosure.

$6.3 million.

&) Legal US Resident

(oil Resident in Nevada 5 years in same dwelling

• Any cash out borrowing in past five years must be limited to:

• Home improvement - real, not personal property

classification

/I Medical bills - documented

• Paying off existing revolving debt - documented

(oil Borrower must have short-sale agreement in place with

lender

• Borrower must have been enrolled m Unemployment

Insurance Program (UIP) with State ofNevada

(oil Borrower must have home listed for sale and listing

agreement.

• Borrower will be required to provide a financial hardship

affidavit.
6. Property/Loan

Eligibility Criteria

7. Program Exclusions

8. Structure of Assistance

9. Per Household

Assistance

10. Duration of Assistance

11. Estimated Number

/Maximum

Participating

Households

12. Program Inception/

Duration

13. Program Interactions

with Other HFA

Programs

14. Program Interactions

with HAMP

TAMPNHPA - Nevada/I 20208. I

e Owner occupied

It Must have only one existing mortgage

(jl Borrower/family must be committed to living in a rental

property from the eligible list of participating properties

provided and execute a 6 month or longer lease at the close

ofthe home sale transaction.

Borrowers completing a short-sale but unwilling/unable to stay in

Nevada due to job opportunities elsewhere.

This program is direct assistance through direct payment to

vendors at closing of the escrow. The payments will not be

structured as a loan.

The maximum is $8,025 paid out to a qualified family in this

short sale program.

The Short-Sale Acceleration program element in the NAHAC

Business Plan is expected to last up to 24 months. Due to current

economic projections showing double digit unemployment rates

in Nevada through the 3rd quarter of 2013, it is expected that this

program will simply exhaust its funding or be unable to accept

more applicants by the end ofthe 24th month.

The Business Plan calls for this program element to assist up to

1,713 families complete their home abandonment/ownership

through a short sale and matriculate to a rental property

somewhere else in Nevada.

The Short Sale Acceleration Program will be available to

borrowers within 3 months after approval by Treasury and will

last up to 2 years.

To the fullest extent possible, absent specific federal program

prohibitions/limitations, the Short-Sale Acceleration program

element will build on or utilize the H.A.F.A. program in parallel.

If it is possible to utilize both the federal H.A.F.A. program funds

underneath the Short-Sale Acceleration program funds, then the

number of possible candidates assisted through the painful ShOlisale process would increase beyond the projected 1,713.

The candidates for the Short-Sale Acceleration program will have

been through a HAMP or similar private bank or GSE loan

modification process and 'failed' by a sufficiently material level

to not even qualify for NAHAC's l5t mortgage Principal

Reduction Program. Thus, the data/processes will show factually

that the only realistic result for the borrower is the short-sale.
15. Program Leverage See 13 above. No additional leverage.

with Other Financial

Resources

TAMPNHPA - NevadaJ120208.1
SCHEDULEC

PERMITTED EXPENSES

DocD D0 D%';D,ft3.·····.·.· •.ii Die 'D 3'3./ 3·\

One-time I Start-Up Expenses:

Initial Personnel $0

Building, Equipment, Technology $377,800

Professional Services $558,398

Supplies / Miscellaneous $0

Marketing /Communications $115,000

Travel $0

Website development /Translation $0

Continqency $1,170,000

Subtotal $2,221,198

Operating I Administrative

Expenses:

Salaries $2,270,440

Professional Services (Legal,

Compliance, Audit, Monitoring) $2,295,051

Travel $23,200

Buildings, Leases & Equipment $156,800

Information Technology &

Communications $84,000

Office Supplies/Postage and

Delivery/Subscriptions $234,572

Risk Management! Insurance $136,426

Training $0

Marketing/PR $310,000

Miscellaneous $0

Subtotal $5,510,489 / , , ; D '" • 'D '·,c.

Transaction Related Expenses:

Recordinq Fees $5,075,803

Wire Transfer Fees $6,200

Counseling Expenses

File Intake $3,843,255

Decision Costs $0

Successful File $0

Key Business Partners On-Going $0

Subtotal ots:l Q?" ?"s:I

Pi ;

Grand Total $16,656,945

% of Total Award 16.20%

Award Amount $102,800,000

TAMPA1HPA - Nevadal120208.1