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NINTH AMENDMENT TO

COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT

and

HFA PARTICIPATION AGREEMENT

This Ninth Amendment to Commitment to Purchase Financial Instrument and HFA

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

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

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

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

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

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

Recitals

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

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

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

certain Amendments to Commitment to Purchase Financial Instrument and HFA Participation

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

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

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

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

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

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

WHEREAS, on February 19, 2016 Treasury announced that it would (i) extend the HHF 

Program through 2020, and (ii) make $2 billion of additional assistance available under the HHF 

Program (the “Fifth Round Funding”) to help prevent foreclosure and stabilize housing markets

in certain states that had previously received HHF Program funding for such purposes; and

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

memorialize the extension of the HHF Program, increase the amount of HHF Program funds

available to Eligible Entity hereunder, and make certain other changes to the terms of the Current 

HPA and the Exhibits and Schedules attached thereto.

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

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

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

Agreement

1. Amendments

A. End of Term. The definition of End of Term in Section 2(A)(14) of the Current 

HPA is hereby deleted and replaced with the following: 
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“End of Term” shall mean the last day of the calendar month in which the Eligible Entity 

makes the last disbursement of HHF Program funds in furtherance of the Services, which

shall occur no later than December 31, 2021 (or such later date as Treasury may 

determine in its sole discretion with written notice to Eligible Entity and HFA). For the 

sake of clarity, Capital Draws shall not be permitted after the End of Term other than for 

payment of Permitted Expenses.

B. Bring Down Certificate. Section 2(A)(15) of the Current HPA is hereby amended 

by (i) striking “on each anniversary of the Effective Date during the Term (as defined 

below)” and replacing it with “on each anniversary of the Effective Date through

September 30, 2016, and from and after October 1, 2016, no later than one hundred 

twenty (120) days after the end of each of their respective fiscal years”, and (ii) by adding 

to the end “A final certification shall be delivered by each of HFA and Eligible Entity on 

the Final Repayment Date (as defined in the Financial Instrument).”

C. Program Participation Cap. Section 3(D) of the Current HPA is hereby deleted in 

its entirety and replaced with the following: 

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

Program Participation Cap, as may be adjusted from time to time as set forth on Schedule 

F attached hereto (the “Program Participation Cap”). Notwithstanding anything to the 

contrary contained herein, 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 of the Program Participation Cap.

D. Performance Reports. Section 4(A) is hereby amended by (i) striking the third 

sentence and replacing it with “HFA shall submit the Performance Report to Treasury or 

its designee no later than forty-five (45) days after the end of each calendar quarter and 

otherwise as requested by Treasury. After Treasury has communicated in writing that the 

Performance Report is in a form acceptable to Treasury, HFA shall promptly post the 

Performance Report to its website”; and (ii) adding to the end “A final Performance 

Report shall be delivered no later than forty-five (45) days after the end of the calendar 

quarter in which the End of Term occurs.”

E. Financial Reporting. Section 4(G) of the Current HPA is hereby deleted in its 

entirety and replaced with the following:

G. Each of HFA and Eligible Entity shall provide annual audited financial 

statements to Treasury no later than one hundred twenty (120) days after the end of 

its respective fiscal year, commencing with the first fiscal year ending after the 

Effective Date, and concluding with the fiscal year in which the End of Term occurs. 

Eligible Entity shall provide 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 concluding with the quarter in 

which the End of Term occurs.
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F. Term. Section 5(A) of the Current HPA is hereby deleted in its entirety and 

replaced with the following:

(A) The term of this Agreement (“Term”) 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 of the Services 

by Treasury. Subject to the foregoing, new Services may be undertaken (e.g., 

approval of assistance actions with respect to unique homeowners or properties, 

including, where applicable, final underwriting decisions and payment schedules), 

through and including December 31, 2020 (or such later date as may be determined 

by Treasury in its sole discretion upon prior written notice to Eligible Entity). 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 of this Agreement or the 

End of Term, and that funds are to be reserved as set forth in Schedule C to pay for 

the cost of the same, through and including the Final Repayment Date.

G. Modifications. 

(a) Section 9(A) of the Current HPA is hereby amended by inserting “and except as 

expressly set forth herein,” after “Subject to Section 9.B.,”

(b) Section 9(B) of the Current HPA is hereby amended by adding the following at the 

end: 

Notwithstanding anything to the contrary contained herein, Treasury may approve 

revisions proposed by Eligible Entity and HFA to any Schedule or Exhibit attached 

hereto, by written notice to Eligible Entity and HFA, pursuant to a procedure 

established by Treasury in its sole discretion and provided to Eligible Entity and 

HFA. The applicable Schedule or Exhibit shall be deemed modified for all 

purposes hereunder as of the date such written notice is received pursuant to 

Section 8 hereof.

(c) Section 9(C) of the Current HPA is hereby amended by deleting the last sentence 

in its entirety.

H. Exhibit A. Exhibit A attached to the Current HPA is hereby deleted in its entirety 

and replaced with Exhibit A attached to this Amendment.

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

entirety and replaced with Schedule A attached to this Amendment.

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

entirety and replaced with Schedule B attached to this Amendment.

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

entirety and replaced with Schedule C attached to this Amendment.
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L. Schedule F. A new Schedule F is added to the Current HPA in the form attached 

to this Amendment as Schedule F.

M. Definitions. All references in the Current HPA to the "Agreement" shall mean the 

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

to the “Financial Instrument” shall mean the Amended and Restated Financial Instrument 

in the form attached to this Amendment as Exhibit A; and all references in the Current 

HPA to Exhibit A or Schedules A, B, C or F shall mean the Exhibit A or Schedules A, B, 

C or F attached to this Amendment. All references herein to the "HPA" shall mean the 

Current HPA, as further amended by this Amendment.

2. Substitution of Financial Instrument. 

Eligible Entity shall deliver to Treasury on the date hereof an Amended and Restated 

Financial Instrument in the form attached to this Amendment as Exhibit A. By executing 

this Amendment, Treasury, HFA and Eligible Entity authorize The Bank of New York 

Mellon to cancel the Financial Instrument previously delivered under the Current HPA 

against delivery of such Amended and Restated Financial Instrument and direct The Bank 

of New York Mellon to return the cancelled Financial Instrument to (or at the direction 

of) the Eligible Entity.

3. Representations, Warranties and Covenants

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

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

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

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

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

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

Eligible Entity, as the case may be, agrees to notify Treasury immediately and the same

shall constitute an Event of Default under the HPA.

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

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

Entity, as applicable, contained in the HPA are true, correct, accurate and complete in

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

as applicable, contained in the HPA shall remain in full force and effect and neither

HFA, nor Eligible Entity is in breach of any such covenant.

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

execute, and deliver this Amendment, the Amended and Restated Financial Instrument, 

and any other closing documentation delivered to Treasury in connection therewith, 

and to perform its obligations hereunder and thereunder.

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

this Amendment and any other closing documentation delivered to Treasury in 

connection therewith, and to perform its obligations hereunder and thereunder.
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4. Miscellaneous

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

are incorporated herein by this reference.

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

to them in the HPA.

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

any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such

prohibition or unenforceability without invalidating the remaining provisions of the HPA,

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

provision in any other jurisdiction.

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

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

all of which together shall constitute one and the same instrument. Facsimile or

electronic copies of this Amendment, the Amended and Restated Financial Instrument, and 

any other closing documentation delivered in connection therewith, shall be treated as originals

for all purposes.

[SIGNATURE PAGE FOLLOWS;REMAINDER OF PAGE 

INTENTIONALLY LEFT BLANK]
[Signature Page to Ninth Amendment to HPA – Kentucky]

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

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

Instrument and HFA Participation Agreement as of the Amendment Date.

HFA: TREASURY:

KENTUCKY HOUSING CORPORATION UNITED STATES DEPARTMENT OF THE 

TREASURY

By: /s/ Brenda Walker By:

Name: Brenda Walker Name: Mark McArdle

Title: Managing Director Title: Deputy Assistant Secretary for 

Financial Stability

ELIGIBLE ENTITY:

KENTUCKY HOUSING CORPORATION

By: /s/ Brenda Walker

Name: Brenda Walker

Title: Managing Director
EXHIBITS AND SCHEDULES

Exhibit A Form of Amended and Restated Financial Instrument

Schedule A Basic Information

Schedule B Service Schedules

Schedule C Permitted Expenses

Schedule F HHF Fifth Round Funding Reallocation Model
EXHIBIT A

FORM OF AMENDED AND RESTATED FINANCIAL INSTRUMENT

This Amended and Restated 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 “Commitment”), entered into as of the Effective Date, as 

modified by those certain Amendments to Commitment to Purchase Financial Instrument and 

HFA Participation Agreement dated as of the dates set forth on Schedule A to the Commitment

(together, the “Agreement”), by and among the United States Department of the Treasury 

(“Treasury”), the party designated as HFA in the Commitment (“HFA”) and Eligible Entity. 

This Amended and Restated Financial Instrument is effective as of April 1, 2016. All of the 

capitalized terms that are used but not defined herein shall have the meanings ascribed to them in 

the Agreement.

Recitals

WHEREAS, Eligible Entity executed and delivered that certain Financial Instrument dated as of 

the Effective Date to Treasury (“Original Financial Instrument”); and

WHEREAS, Treasury and Eligible Entity desire to amend certain terms of the Original Financial 

Instrument regarding repayment of the Purchase Price in connection with the extension of the 

HHF Program through 2020 and availability of additional assistance under the HHF Program

Fifth Round Funding; and

WHEREAS, Treasury and the Eligible Entity desire to restate and replace the Original Financial 

Instrument in its entirety.

Accordingly, 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) of the Agreement.

(b) This Amended and Restated 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 Amended and Restated 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 (12 U.S.C. 5201 et seq.) as amended, as the same may be amended from 

time to time (“EESA”).

2. Repayment of Purchase Price. 

If a recipient of HHF Program funds repays any or all of the funds received from Eligible 

Entity in connection with the Services (“Repaid Funds”), and such repayment occurs on 

or before the Final Repayment Date (hereinafter defined), Eligible Entity shall deposit 

such Repaid Funds in the Depository Account and use such Repaid Funds to provide 

Services or to fund the Permitted Expenses to the extent the full amount as indicated on 

Schedule C to the Agreement has not been drawn from Treasury pursuant to Section 3(A) 

of the Agreement. Any Repaid Funds retained by Eligible Entity to fund Permitted 

Expenses shall correspondingly reduce the amount that Eligible Entity may draw from 

Treasury pursuant to Section 3(A) of the Agreement to fund Permitted Expenses.

For the sake of clarity, if a recipient of HHF Program funds repays any or all of the funds 

received from Eligible Entity in connection with the Services, and such repayment occurs 

after the Final Repayment Date, such repaid funds shall not be considered HHF Program 

funds. 

3. Final Repayment. In the event Eligible Entity is holding any HHF Program funds, 

including, but not limited to, amounts reserved for payment of Permitted Expenses and 

Repaid Funds, as of the date that is ninety (90) days after the End of Term (the “Final 

Repayment Date”), all such funds shall be returned to Treasury or its designee prior to

1:00pm Eastern Time on the Final Repayment Date. For the sake of clarity, no Capital 

Draws will be permitted after the Final Repayment Date.

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 Amended and Restated 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 Amended and Restated Financial Instrument by reference.

IN WITNESS WHEREOF, Eligible Entity hereby executes this Amended and Restated Financial 

Instrument on the date set forth below.

[INSERT FULL LEGAL NAME OF ELIGIBLE ENTITY]

By:

Name: 

Title: 

Date: ____________ __, 2016
A-1

SCHEDULE A

BASIC INFORMATION

Eligible Entity Information:

Name of the Eligible Entity: Kentucky Housing Corporation1

Corporate or other organizational form: independent, de jure Municipal Corporation

Jurisdiction of organization: Kentucky

Notice Information:

HFA Information:

Name of HFA: Kentucky Housing Corporation1

Organizational form: independent, de jure Municipal Corporation

Date of Application: September 1, 2010

Date of Action Plan: September 1, 2010

Notice Information:

Program Participation Cap: $179,050,120.00

Portion of Program Participation Cap

Representing Original HHF Funds: N/A

Portion of Program Participation Cap 

Representing Unemployment HHF Funds: $55,588,050.00

Rounds 1-4 Funding Allocation: $148,901,875.00

Round 5 Funding Allocation: $30,148,245.00

Permitted Expenses: $18,769,672.00

Closing Date: September 23, 2010

 1 References in the Agreement to the term "HFA" shall mean Kentucky Housing Corporation (“KHC”) in its 

capacity as HFA as such term is used in the Agreement; and references in the Agreement to the term "Eligible 

Entity" shall mean KHC, in its capacity as Eligible Entity as such term is used in the Agreement.
A-2

First Amendment Date: September 29, 2010

Second Amendment Date: December 16, 2010

Third Amendment Date: March 31, 2011

Fourth Amendment Date: September 28, 2011

Fifth Amendment Date: May 3, 2012

Sixth Amendment Date: December 14, 2012

Seventh Amendment Date: October 10, 2014

Eighth Amendment Date: October 28, 2015

Ninth Amendment Date: April 1, 2016

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

Depository Account Control Agreement between 

Treasury and Eligible Entity regarding the HHF 

Program.
SCHEDULE B

SERVICE SCHEDULES

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

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

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

HPA.
B-1-1

SERVICE SCHEDULE B-1

KENTUCKY HOUSING CORPORATION

KENTUCKY UNEMPLOYMENT BRIDGE PROGRAM

Summary Guidelines

1. Program Overview The Kentucky Housing Corporation’s (KHC) Kentucky 

Unemployment Bridge Program (UBP) will provide funds to 

lenders and servicers on behalf of qualified homeowners who 

are delinquent on their mortgage payments or anticipate default 

due to a loss of income due to unemployment or a reduction in 

income due to substantial underemployment or a qualifying 

disability. Maximum assistance per household is set at $15,000.

There is a time limit of twelve (12) months for households to 

utilize the assistance – assistance ends at the earlier to occur of 

twelve (12) months from the loan closing or receipt of $15,000

in assistance, so long as other conditions of eligibility are met 

and continue. Funds will be available on a first-come firstserved basis.

Borrowers will enter the UBP through the statewide 

Homeownership Protection Center operated by KHC. 

Applications will be processed by housing counseling agencies 

who will return the application to KHC for final underwriting, 

loan closing, disbursements and loan servicing. Borrowers will 

not be required to make any portion of the monthly payment. If 

a household qualifies for the UBP, program funds will be used 

for 100 percent of the monthly payment and reinstatement fees 

to include homeowner’s delinquent balance late fees, penalty 

interest, taxes, insurance, and protective advances.

2. Program Goals To prevent avoidable foreclosure for homeowners who have 

experienced loss of income due to unemployment or a reduction 

in income due to substantial underemployment or a qualifying 

disability by providing funds to reinstate, pay the household’s

mortgage payments during the period of 

unemployment/underemployment/disability and for two (2) 

months after re-employment or substantially increased income, 

if needed, up to the maximum dollar threshold for assistance of 

$15,000.

3. Target Population / 

Areas

The UBP will be available statewide. No specific population is 

targeted. During the first twelve (12) months of the UBP, 
B-1-2

$10,000,000 will be set aside to serve rural counties.

4. Total Allocation 

(Excluding 

Administrative 

Expenses)

$144,780,448

5. Borrower Eligibility 

Criteria

All borrowers must submit a hardship affidavit 

documenting inability to pay their mortgage.

Housing counselors and KHC will determine eligibility for the 

UBP. Eligible households must meet ALL of the following 

requirements:

• The homeowners must be legal U.S. residents.

• The financial hardship must be loss of employment 

income due to unemployment or a 15% reduction in 

income for the underemployed or qualified disabled 

homeowners.

• The homeowner’s cash reserves cannot exceed six (6) 

months, excluding retirement reserves. For purposes of 

the UBP, “cash reserves” is defined as non-retirement 

liquid assets sufficient to pay the household’s monthly 

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

including both first and second lien home mortgage(s). 

• The homeowner must be experiencing a financial 

hardship due to involuntary loss or reduction in 

homeowner’s income documented by an executed 

hardship affidavit. 

• The homeowner must contact KHC or their counselor if 

there is a change in income or employment during the 

twelve (12) months of UBP participation. 

6. Property / Loan 

Eligibility Criteria

Property/Loan Eligibility Requirements:

• Owner-occupied primary residence located in Kentucky.

• Existing single-family homes or condominiums (attached 

or detached) and manufactured or mobile homes on 

foundations permanently affixed to real estate owned by 

the borrower.

7. Program Exclusions A household is not eligible for the UBP if:

• Borrower’s total unpaid principal balances exceed 
B-1-3

$275,000, including first and second mortgages 

combined.

• Borrower owns other residential or rental property

• Borrower’s hardship is a result of voluntary resignation 

of employment or voluntary reduction in hours or 

income. 

• Borrower’s application is for a second home or 

investment properties. 

• Borrower does not occupy the property as his/her 

primary residence.

The UBP will not fund job training costs.

8. Structure of Assistance All assistance will be structured as a 0% interest, nonamortizing, forgivable, nonrecourse loan, secured by a 

junior lien on the property, which will be forgiven 20 

percent each year over five (5) years.

The loan will only be repayable if the borrower sells the 

property before the period expires and there is sufficient equity 

to pay the loan.

9. Per Household 

Assistance

Estimated Average - $15,000

Maximum Assistance - $15,000

10. Duration of Assistance Payment of assistance will end on the first to occur of: (1) 

twelve (12) months from assistance loan closing date, (2) two 

(2) months after re-employment or substantially increased 

employment, (3) the expenditure of the maximum amount of 

assistance ($15,000) or (4) the household no longer complies 

with other required program provisions.

In the case of a new qualifying event of unemployment or 

underemployment or qualifying disability, the household may 

re-apply for assistance. Provided, however that new assistance 

will be made available only to the extent assistance is available, 

up to the maximum total assistance for the household and the 

maximum time period for assistance has not been exhausted.

11. Estimated Number of 

Participating 

Households

KHC is estimating that approximately 9712 households will be 

served over the term of the UBP.
B-1-4

12. Program Inception / 

Duration

KHC implemented the UBP in two stages. This first phase of 

the UBP began January 3, 2011 to serve as a pilot period. Full 

implementation to all qualified borrowers statewide began April 

1, 2011. The program will expire December 31, 2020.

13. Program Interaction 

with Other Programs 

(e.g. other HFA 

programs)

The UBP will be leveraged with existing programs including the 

Homeownership Protection Center (HPC), the Homeownership 

Education and Counseling Program funded through HUD and 

KHC and the NeighborWorks Foreclosure Mitigation 

Counseling Program (NFMC). Homeowners who participate in 

the UBP will work with a KHC-approved counselor and utilize 

the Homeownership Protection Center website for their initial 

information.

14. Program Interactions 

with HAMP

KHC and housing counselors will analyze borrowers for their 

eligibility for the Hardest Hit Unemployment Bridge Program as 

well as any other loss mitigation options that may be available to 

them. Where possible, HHF assistance will precede HAMP UP. 

15. Program Leverage with 

Other Financial 

Resources

No investor match is required for this program.

This program will not be combined with other financial 

resources.
B-2-1

SERVICE SCHEDULE B-2

KENTUCKY HOUSING CORPORATION 

HARDEST HIT FUND DOWN PAYMENT ASSISTANCE PROGRAM 

Summary Guidelines

1. Program 

Overview

The Down Payment Assistance (“DAP”) Program will provide an 

incentive to qualified homebuyers to purchase a primary residence in 

targeted areas in Kentucky. Providing incentives to qualified 

homebuyers in housing markets that have been hardest hit by serious 

delinquency, negative equity, distressed sales, and foreclosures will 

strengthen demand in those areas, stabilize housing prices and prevent 

future foreclosures. This Program will initially be offered as a pilot that 

includes four Kentucky counties.

2. Program Goals The goal of the DAP Program is to help homeowners avoid foreclosure 

by assisting in the stabilization of housing prices in targeted areas. 

Kentucky will identify meaningful indicators that will enable them to 

track and quantify the DAP Program’s impact in the targeted areas.

3. Target 

Population/Areas

Targeted areas are those counties identified in Secondary Market 

Program Guide including: Jefferson, Kenton, Christian and Hardin 

(“Targeted Area”). For these four counties, Kentucky Housing 

evaluated five housing market distress indicators across all one-hundred 

and twenty Kentucky counties—seriously delinquent mortgage loans, 

negative equity, short sales, REO sales, and foreclosures—as well as 

loan origination volume. Targeted counties exceed the statewide rate in 

at least four out of the five distressed housing market indicators, and a 

minimum threshold origination volume was achieved in these counties 

in 2014.

4. Program 

Allocation 

(Excluding 

Administrative 

Expenses)

$15,500,000.00 

5. Borrower 

Eligibility Criteria

Eligible borrowers must qualify for and meet all requirements of a 

Kentucky Housing Corporation’s homebuyer loan program first 

mortgage loan originated through a participating lender. Allowable first 

mortgage loans are 30-year, fixed-rate loans from the Federal Housing 

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

of Agriculture – Rural Development (RD) and Fannie Mae. Eligible 

borrowers must also meet the following criteria:
B-2-2

• Must meet income limits that do not exceed 175% of the Area 

Median Income (“AMI”), as specified in the Secondary Market 

Program Guide. 

• Borrowers must be First-Time Homebuyers. For purposes of this 

program, a First-Time Homebuyer is someone who has not had an 

ownership interest in their primary residence in the past three years.

• All borrowers must complete pre-purchase home buyer education 

and counseling in the form of an online, telephone, or face-to-face 

workshop.

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

or otherwise meet the applicable Agency (FHA, VA, USDA-RD) or 

GSE (Fannie Mae) requirements.

• Borrowers must be able to provide a Dodd-Frank affidavit as 

specified in the Secondary Market Program Guide.

• Borrowers must be credit-worthy and meet minimum FICO scores, 

and have a maximum debt-to-income (DTI) ratio no greater than 

45%, each as specified in the Secondary Market Program Guide.

6. Property/Loan 

Eligibility Criteria

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

townhome, a manufactured on foundation permanently affixed to 

real estate owned by the borrower.

• Must be the borrower’s primary residence.

• Property must be located in a Targeted Area.

• Property must meet Kentucky Housing Corporation’s Secondary 

Market Program guide. Maximum purchase price limit is $294,000.

• Meet all applicable Agency (FHA, VA, USDA-RD) or GSE (Fannie 

Mae & Freddie Mac) underwriting guidelines.

7. Program 

Exclusions

• Borrowers, properties and loans not meeting eligibility requirements 

as specified in the Secondary Program Guide or Agency/GSE 

underwriting criteria.

• Dodd-Frank exclusion for having been convicted of a mortgagerelated felony in the past ten years.

8. Structure of 

Assistance

Down payment assistance, including reasonable and customary closing 

costs, will be made available to homeowners in the form of a zeropercent (0%) interest, non-recourse, forgivable second mortgage loan 

with a five-year term. This loan will be evidenced by a note and 

mortgage in favor of Kentucky Housing Corporation. The second 

mortgage will be forgivable at the rate of 20% per year over the five 
B-2-3

year term of the loan. Kentucky Housing Corporation reserves the right 

to resubordinate the second mortgage as further detailed in the Closing 

and Quality Review- Secondary Market Program Guide.

If the borrower sells the home during any part of the loan term, the 

remaining principal balance will be due to Kentucky Housing 

Corporation in the event there are sufficient equity proceeds from the 

sale. If there is not enough equity in the home to repay the entire 

amount due, Kentucky Housing Corporation will forgive the excess 

portion or all of the remaining principal balance. Any loans repaid will 

be recycled back into the Program and used to provide assistance to 

additional borrowers for the duration of the Program.

9. Per Household 

Assistance

$10,000

10. Duration of 

Assistance

DAP Program funds will be used to reimburse participating lenders who 

table fund the loan at closing, once it is determined that all DAP 

Program requirements have been met.

11. Estimated 

Number of 

Participating 

Households

It is anticipated that the DAP Program will assist approximately 1316 

households.

12. Program 

Inception/Duration

The DAP Program will begin in 2016 and it is projected that assistance 

will be expended through 2020.

13. Program 

Interactions with 

Other Programs 

(e.g. other HFA 

programs)

The DAP Program will take advantage of an existing infrastructure of 

participating lenders who are already actively originating both first 

mortgage and down payment assistance loans as part of Kentucky’s 

current homebuyer loan programs. If the borrower has received HHF 

assistance under any other HHF program, the maximum amount of all 

assistance may not exceed $45,000.

14. Program 

Interactions with 

HAMP

None.

15. Program 

Leverage with 

Other Financial 

Resources

Kentucky Housing Corporation programs often use Secondary Market 

as a source of funding for the accompanying first mortgage loans. In 

addition, funds may be leveraged by our lenders using additional 

subsidy programs such as Federal Home Loan Bank down payment 

assistance, Neighborhood Stabilization Program (NSP) Funds or 

HOME funds. 
C-1

SCHEDULE C

PERMITTED EXPENSES

Kentucky

One-time / Start-Up Expenses:

Initial Personnel $0

Building, Equipment, Technology $115,100

Professional Services $1,900

Supplies / Miscellaneous $1,500

Marketing /Communications $100,000

Travel $0

Website development /Translation $0

Contingency $0

Subtotal $218,500

Operating / Administrative Expenses:

Salaries $7,256,889

Professional Services (Legal, Compliance, Audit, 

Monitoring) $4,940,398

Travel $42,705

Buildings, Leases & Equipment $0.00 

Information Technology & Communications $286,066

Office Supplies/Postage and Delivery/Subscriptions $104,567

Risk Management/ Insurance $0.00 

Training $2,072

Marketing/PR $751,076

Miscellaneous $0.00 

Subtotal $13,383,773

Transaction Related Expenses:

Recording Fees $143,481

Wire Transfer Fees $97,228

Counseling Expenses

File Intake $0.00 

Decision Costs $0.00 

Successful File $4,926,690

Key Business Partners On-Going $0.00 
C-2

Kentucky

Subtotal $5,167,399

Grand Total $18,769,672

% of Total Award 10.5%

Award Amount $179,050,120.00
F-1

SCHEDULE F

HHF FIFTH ROUND FUNDING REALLOCATION MODEL

This Schedule F describes a uniform model (the “Reallocation Model”) designed to maximize 

the utilization of the $2 billion made available under the HHF Program Fifth Round Funding. In 

general, the Reallocation Model reallocates unused Fifth Round funding to states participating in 

the HHF Program that meet certain defined criteria for utilization of HHF Program funds. The 

aggregate amount obligated under the Fifth Round Funding will not increase at any time.

I. Definitions

(a) “2016 Utilization Threshold” shall mean having Drawn at least 70% of the Rounds 1-4 

Funding Allocation.

(b) “2017 Utilization Threshold” shall mean having Drawn at least 95% of the Rounds 1-4 

Funding Allocation.

(c) “2018 Utilization Threshold” shall mean having Drawn at least 80% of the Program 

Participation Cap.

(d) “Annual Reallocation Amount” shall mean the aggregate amount, if any, by which the 

Program Participation Caps set forth in all HFA Participation Agreements are reduced 

pursuant to the Reallocation Model, as applied with respect to each Utilization Threshold.

(e) “Drawn” shall mean having made Capital Draws pursuant to Section 3(A) of the 

Agreement.

(f) “HFA Participation Agreements” shall mean, collectively, the Commitments to Purchase 

Financial Instrument and HFA Participation Agreements entered into by the States, as 

amended from time to time.

(g) “Population” shall mean the most recent Annual Estimate of the Resident Population for 

a State as determined by the United States Census Bureau from time to time.

(h) “Recipient State” shall mean each State that has achieved the Utilization Threshold for 

the applicable year, provided that such State is not then in default under its HFA 

Participation Agreement. Notwithstanding the foregoing, in the event a State declines an 

increase to its Program Participation Cap and Round 5 Funding Allocation for which it is 

eligible pursuant to this Schedule F, such State shall not be considered a Recipient State. 

(i) “Rounds 1-4 Funding Allocation” is the amount set forth on Schedule A as “Rounds 1-4 

Funding Allocation.”

(j) “Round 5 Funding Allocation” is the amount set forth on Schedule A as “Round 5 

Funding Allocation”, as adjusted from time to time in accordance with this Schedule F.
F-2

(k) “Share of Annual Reallocation Amount” shall mean a Recipient State’s share of the 

applicable Annual Reallocation Amount, as determined using the methodology described 

in Section IV below. If the Annual Reallocation Amount is zero, then the Share of 

Annual Reallocation Amount will be zero for the applicable year.

(l) “State” shall mean any or each of Alabama, Arizona, California, Florida, Georgia, 

Illinois, Indiana, Kentucky, Michigan, Mississippi, New Jersey, Nevada, North Carolina, 

Ohio, Oregon, Rhode Island, South Carolina, Tennessee, and Washington, D.C.

(m)“Utilization Threshold” means each of the 2016 Utilization Threshold, the 2017 

Utilization Threshold and the 2018 Utilization Threshold.

II. Reduction of Program Participation Cap and Round 5 Funding Allocation:

(a) If Eligible Entity does not achieve the 2016 Utilization Threshold on or before December 

31, 2016, each of the Program Participation Cap and Round 5 Funding Allocation shall 

be reduced by an amount equal to 50% of the Round 5 Funding Allocation as of such 

date.

(b) If Eligible Entity does not achieve the 2017 Utilization Threshold on or before December 

31, 2017, each of the Program Participation Cap and the Round 5 Funding Allocation 

shall be reduced by up to 100% of the Round 5 Funding Allocation as of such date.

(c) If Eligible Entity does not achieve the 2018 Utilization Threshold on or before December 

31, 2018, each of the Program Participation Cap and Round 5 Funding Allocation shall 

be reduced by an amount equal to that portion of the Round 5 Funding Allocation which 

has not yet been Drawn nor obligated with respect to a unique homeowner or property as 

of such date.

III. Increase of Program Participation Cap and Round 5 Funding Allocation:

(a) If Eligible Entity achieves the 2016 Utilization Threshold on or before December 31, 

2016, each of the Program Participation Cap and Round 5 Funding Allocation shall be 

increased by the State’s Share of the Annual Reallocation Amount with respect to such 

date.

(b) If Eligible Entity achieves the 2017 Utilization Threshold on or before December 31, 

2017, each of the Program Participation Cap and the Round 5 Funding Allocation shall 

be increased by the State’s Share of the Annual Reallocation Amount with respect to 

such date.

(c) If Eligible Entity achieves the 2018 Utilization Threshold on or before December 31, 

2018, each of the Program Participation Cap and Round 5 Funding Allocation shall be 

increased by the State’s Share of the Annual Reallocation Amount with respect to such 

date.

IV. Methodology for Determining Recipient State’s Share of Annual Reallocation Amount
F-3

If Eligible Entity has achieved the Utilization Threshold and the Annual Reallocation Amount 

is greater than zero for the applicable year, the Program Participation Cap and Round 5 

Funding Allocation will be increased by an amount calculated as follows: 

First, calculate the “Per Capita Amount” for each Recipient State. The Per Capita Amount

shall be calculated as the Annual Reallocation Amount divided by the sum of the Population 

of all Recipient States.

Second, calculate the “Utilization Percentage” for each Recipient State. 

The Utilization Percentage with respect to the 2016 Utilization Threshold and the 2017 

Utilization Threshold shall be calculated as the lesser of (I) the ratio of (x) aggregate Capital 

Draws made by the Recipient State under its HFA Participation Agreement as of December 

31, 2016 and December 31, 2017, respectively, to (y) the Recipient State’s Rounds 1-4 

Funding Allocation as of such dates, or (II) 100%. 

The Utilization Percentage with respect to the 2018 Utilization Threshold shall be calculated 

as the ratio of (x) aggregate Capital Draws made by the Recipient State under its HFA 

Participation Agreement as of December 31, 2018, to (y) such Recipient State’s Program 

Participation Cap as of such date.

Third, calculate a “Utilization Score” for each Recipient State by standardizing the Utilization 

Percentages using the z-score methodology, a standard statistical standardization procedure. 

The Utilization Score for each Recipient State is calculated as (I)(x) the Utilization Percentage 

for such Recipient State, less (y) the mean Utilization Percentage for all Recipient States 

(“Average”), divided by (II) the standard deviation of the Utilization Percentages for all 

Recipient States. If a Recipient State’s Utilization Percentage is greater than the Average, the 

Utilization Score will be positive. If a Recipient State’s Utilization Percentage is less than 

Average, the Utilization Score will be negative.

Fourth, calculate a “Need Factor” for each Recipient State. The Need Factor is a fixed dollar 

amount which will be multiplied by each Utilization Score to determine the dollar amount by 

which each Recipient State’s Per Capita Amount will be adjusted. The Need Factor is

calculated as the dollar amount that would result in the highest adjusted Per Capita Amount 

for a Recipient State being no more than three (3) times that of the lowest adjusted Per Capita 

Amount for a Recipient State (i.e., a Min/Max Factor of 3).

Fifth, calculate an “Adjusted Per Capita Amount” for each Recipient State by adding to or 

subtracting from the Recipient State’s Per Capita Amount the product of (x) the Need Factor 

and (y) the Recipient State’s Utilization Score. Recipient States with positive Utilization 

Scores will have dollars added to the Recipient State’s Per Capita Amount, and Recipient 

States with negative Utilization Scores will have dollars subtracted from the Recipient State’s

Per Capita Amount.

Sixth, calculate the “Share of the Annual Reallocation Amount” for each Recipient State by 

first multiplying the Recipient State’s Adjusted Per Capita Amount by the Recipient State’s
F-4

Population to arrive at a “Preliminary Share”. The Preliminary Share for each Recipient State 

is then normalized to arrive at the Share of the Annual Reallocation Amount by multiplying 

(x) a ratio, the numerator of which is the Preliminary Share for such Recipient State and the 

denominator of which is the sum of the Preliminary Shares for all Recipient States, and (y) the 

Annual Reallocation Amount.

V. Notices; Modifications

(a) Treasury will notify Eligible Entity in writing of any adjustment to the Program 

Participation Cap and Round 5 Funding Allocation pursuant to this Schedule F. Related 

adjustments to program allocations and other amounts set forth in the Service Schedules, 

and Permitted Expenses set forth on Schedule C, shall be made as set forth in such 

written notice.

(b) For the avoidance of doubt, a written amendment to the Agreement shall not be required 

to effectuate an adjustment of the Program Participation Cap or Round 5 Funding 

Allocation pursuant to this Schedule F. The Program Participation Cap and Round 5

Funding Allocation set forth on Schedule A to the Agreement shall be deemed to be 

modified upon receipt of the written notice sent pursuant to Section V (a) above. 

 

(c) Treasury reserves the right to unilaterally modify or supplement the terms and provisions 

of this Schedule F, at any time with prior written notice to the Eligible Entity.