The following are the terms and conditions of the Hardest Hit Fund Mortgage Foreclosure Prevention Program (“Program”) implemented by the Tennessee Housing Development Agency (“THDA”) and funded by the U.S. Treasury.  Program is governed by the Emergency Economic Stabilization Act of 2008 (Pub. L. 110-343), all applicable federal and state law, and THDA’s Program Guide.

I.                   ELIGIBILITY

A.     I acknowledge this application is being made under penalties of perjury and will be relied on for purposes of determining my eligibility for a loan under the Program.  I understand further that it is a Class E felony to provide false information to THDA in order to receive a benefit from THDA that I would otherwise not be eligible for or to receive a benefit greater than I would otherwise receive.

B.     I certify I have not been convicted of a felony, larceny, theft, fraud or forgery, money laundering, or tax evasion in connection with a mortgage or real estate transaction within the last ten years.

C.     I understand that to be eligible for the Program, I must have lost my job or suffered another temporary Program eligible hardship due to no fault of my own.

D.     I understand that to be eligible for the Program, I must be a legal resident of the United States and live in Tennessee.

E.      I understand that to be eligible for the Program, I must disclose all credit information regarding bank accounts, outstanding installment and revolving debts, etc., as requested in the loan application.

F.      I certify that the Borrower(s) identified in this application is/are the owner(s) of the subject Property and that there are no other owners of the Property.

G.     I certify that the Property is my principal and primary residence, which is defined as the property that I will occupy for the majority of the calendar year.  Further, I understand that to remain eligible under the Program, I must continue to occupy the Property as my principal and primary residence for the entire term of the Loan.

H.     I certify that my Property is an existing single family, one unit home, or a HUD approved manufactured or mobile home, legally classified as real property under the applicable laws of Tennessee, with wheels, axles, towing tongue, and running lights removed, permanently affixed to a conventional foundation (i.e. basement, crawl space, or slab foundation).

I.        I certify that my current mortgage loan(s) was/were not originated for business purposes.

II.                PROGRAM TERMS

A.     If approved for participation, I understand that my Mortgagee/Servicer will stay foreclosure proceedings for a length of time as provided in the Mortgagee/Servicer agreement with THDA.

B.     I understand that the stay of foreclosure does not apply to collection activity and that during this application process that I may be contacted by my Mortgagee/Servicer or other relevant parties in an attempt to collect outstanding obligations. I understand that delinquent mortgage payments and other mortgage related expenses (i.e. homeowner’s association dues) can result in derogatory information being included as part of my credit and mortgage payment history file.

C.     I understand that, if my Mortgagee/Servicer receives notice from THDA that my application has been denied, my Mortgagee/Servicer may resume collection of my mortgage obligations(s); which at that point could include foreclosure.

D.     I understand that, should I be approved for assistance, I have the responsibility of following up with all relevant parties regarding accurate posting of reinstatements and/or on-going monthly payments remitted by THDA. I agree to immediately contact THDA should any problems or incorrect postings occur to maintain a satisfactory payment history.

E.      I understand that, if I am approved for assistance, the loan agreement is between THDA and borrowers identified in this application.  Therefore, if future amounts for real estate property taxes and homeowner’s insurance (including flood insurance, if required) have been included in the total projected loan, then it is solely my responsibility to forward the necessary billing statements and/or invoices to THDA within ten (10) business days to ensure the timely and prompt payment of these obligations. My failure to forward these documents within ten (10) business days may result in me being responsible for the payment of any late fees, penalties and/or interest.

F.      I understand that if I am approved for assistance, I must maintain adequate liability and hazard (i.e. homeowners’) insurance to protect my home against the risk of loss, from fire and other casualty.  THDA must be named an “insured/loss payee” on the policy.  I understand I am required to provide THDA with proof of coverage prior to closing. 

III.             LOAN TERMS

A.     I understand the Program loan is not a grant but a 5 year, 0% interest, non-recourse deferred-payment forgivable subordinate loan. A forgiveness clause will reduce the loan amount by 20% a year for every year Borrower(s) stay(s) in the home.  At the end of the 5 years, the note will be considered satisfied and THDA will release the lien securing the note.

B.     I understand loan funds are due and payable if the property is sold, refinanced, or no longer owner occupied as my primary, principal residence (unless otherwise prohibited under applicable federal law).  Loans are repayable only from proceeds to the Borrower(s) from a sale or refinance.  If the property is sold or refinanced and has not increased in equity to the degree necessary to repay the note, all or a portion of the note will be forgiven.

C.     I understand the Program subordinate mortgage will be evidenced by a promissory note and secured by a deed of trust that places a lien against the property of the Borrower(s).

D.     I understand a Program loan may become due and payable upon demand if Borrower(s) is/are terminated from the Program or otherwise violate(s) the Program terms and conditions.

E.      I understand the Program loan amount and terms are based on an individual basis and are made in THDA’s sole discretion dependent upon my financial and employment circumstances. 

F.      I understand the maximum loan amount and duration of assistance is based on all outstanding unpaid principal balances including the Program loan, location of the property, and if Borrower(s) is/are reemployed, searching for work, or is/are completing a job training/education program to help secure a new job.

IV.              TYPES OF ASSISTANCE

A.     I understand that the Program can provide ONE of the following types of assistance:

1.      Reinstatement Only or One-time Assistance to help homeowners who have found a new job but need help to bring their mortgage current;

2.      Short-term Assistance to help homeowners while they search for a new job;

THDA, in its sole discretion, will determine if the assistance I receive is One Time Assistance and/or Short Term Assistance.

B.     I understand that, if I am approved to receive on-going monthly mortgage payment assistance through the Program, the amount of the Program loan is an estimate of the amount due to my mortgage creditors, including but not limited to, mortgage lenders, tax assessors, insurance companies, and homeowners’ associations.

C.     I understand that THDA shall advance only the actual amount of each monthly payment due to my mortgage creditors for a period of up to twelve (12) months not to exceed $15,000, or eighteen  (18) months not to exceed $20,000 (based on eligible county),  from the date of the Promissory Note.

D.     I understand that, if I am approved to receive on-going monthly payment assistance, THDA reserves the right to reassess my situation at any time during the term of the loan to determine if on-going assistance is required. Furthermore, THDA’s continuation of payments on my behalf is contingent upon my compliance with the Program terms and conditions.

E.      I understand that, if I am approved for a Program loan through the Program, I will again have to verify that the statements contained herein are true and accurate as of the date of the Loan closing.

V.                 HOUSING COUNSELING

A.     I understand that, if I am denied Program assistance, I may be eligible to receive other foreclosure mitigation services which shall be identified by my Housing Counselor and THDA is not responsible for any failure by my Housing Counselor to provide me information concerning any other foreclosure mitigation services that may be available.

B.     I understand that, if I am approved for a Program Loan, I must attend required counseling sessions with a Housing Counselor as specified in Exhibit A.

C.     I understand that, if I am approved for a Program loan, my financial situation will be reviewed every 3 months to determine if assistance needs to be continued or modified.  I will be required to submit documents (i.e. most recent pay stubs, employment documentation, etc.), pertaining to this review, to the Provider Housing Counseling Organization.  I understand if these documents are not provided to the counseling organization within 15 days of their request, I may be terminated from the Program.

D.     I understand that, if I do not attend the required counseling sessions with the housing counselor, I may be terminated from the Program.

I UNDERSTAND THAT ACCEPTING THESE TERMS AND CONDITIONS DOES NOT GUARANTEE THAT I WILL BE APPROVED FOR ASSISTANCE.  THDA WILL NOTIFY ME IN WRITING IF MY LOAN REQUEST IS APPROVED OR DENIED.

I acknowledge that I have read and understand the above terms and conditions.  I understand that if I fail to abide by the terms and conditions, my application may be denied, I may be terminated from the Program and my Loan may immediately become due and payable.  I certify that all of the information provided and shared with the Provider Housing Counseling Organization and THDA in connection with my application and consideration for assistance through the Program administered by THDA is true and correct to the best of my knowledge.  I understand that false or misleading information will affect my ability to receive assistance, may be grounds for rejection of my application or later termination from the Program, and may be a violation of State and/or Federal criminal law.