HHF Kentucky Date: January 31, 2018
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 first-
served 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.
B-1-2
3. Target Population /
Areas
The UBP will be available statewide. No specific population is
targeted. During the first twelve (12) months of the UBP,
$10,000,000 will be set aside to serve rural counties.
4. Total Allocation
(Excluding
Administrative
Expenses)
$162,780,448
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.
B-1-3
7. Program Exclusions
A household is not eligible for the UBP if:
• Borrower’s total unpaid principal balances exceed
$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, non-
amortizing, 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
KHC is estimating that approximately 10,912 households will be
served over the term of the UBP.
B-1-4
Households
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)
$ 24,437,004
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 mortgage-
related 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 zero-
percent (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 2185
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.
HHF Kentucky Date: January 31, 2018
C-1
SCHEDULE C
PERMITTED EXPENSES
Kentucky
$0
$115,100
$1,900
$1,500
$100,000
$0
$0
$0
$218,500
$7,653,102
Professional Services (Legal, Compliance, Audit,
$5,300,398
$44,705
$0.00
$306,066
$112,067
$0.00
$2,072
$751,076
$0.00
$14,169,486
$168,481
$117,228
$0.00
$0.00
$5,301,690
$0.00
HHF Kentucky Date: January 31, 2018
C-2
Kentucky
$5,587,399
$19,975,385
% of Total Award
9.64%
Award Amount
$207,192,837