HHF Phase 2 Application

Hardest Hit Fund Fifth Round Funding Allocation:
Phase 2 – Application Overview
In December 2015, Congress passed the Consolidated Appropriations Act, 2016 (the Act) that
amended the Emergency Economic Stabilization Act of 2008 (as amended, EESA) as it relates to
Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (Hardest Hit
Fund or HHF). The Act gives the Secretary of the Treasury the ability to commit up to $2 billion
in additional Troubled Asset Relief Program (TARP) funds to the 19 state housing finance
agencies and designated “eligible entities” (collectively, HFAs) currently participating in the
Hardest Hit Fund. The following guidelines apply to the HHF Fifth Round Funding Allocation
(Fifth Round): Phase 2 –Application, as announced by Treasury on February 19, and do not
apply directly to funds allocated in Phase 1 – Formula. Only HFAs that currently participate in
the Hardest Hit Fund may apply. The term of HHF will be extended by three years, to expire on
December 31, 2020.

GUIDELINES FOR PHASE 2 – APPLICATION
HFAs who wish to request additional funding under Phase 2 must submit a written application
specifying the amount of funds requested and meeting the criteria described below, no later than
March 11, 2016. Treasury will review applications and score them in three categories (as
outlined below) to determine if the key elements of each category are fully addressed (5 points),
partially addressed (2 points) or not addressed (0 points). Please refer to Appendix A attached
hereto for the Phase 2 – Application Checklist, which provides further information on how
Treasury will score applications.
HFAs are encouraged to use data obtained from public, private, and program-specific data
sources throughout the application, including sources such as the U.S. Bureau of Labor and
Statistics, CoreLogic, Mortgage Bankers Association, or other industry-standard non-public
sources, reports published by the HFA, HHF Quarterly Performance or Financial Reports, and
other sources that provide either relevant economic information or demonstrate ongoing market
needs related to foreclosure prevention or state housing market stabilization in specific HHF
programs.
An HFA may request no more than 50% of previous allocations (i.e., Rounds 1-4) or $250
million (whichever is lower). The amount of the final allocation for each HFA will vary and
depend on a number of factors, including, but not limited to, the content of the application
submitted, applications submitted by other HFAs, and availability of funds. Treasury reserves
the right to require an application meet a minimum score and/or to adjust the amount of the
allocation based on the application’s score as compared to other applications. Treasury expects to
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announce final allocations under Phase 2 on or about April 20, 2016. HFAs are not guaranteed
to receive an allocation under Phase 2.
Note that funds allocated in the Fifth Round are subject to the “use or lose” provisions described
on Schedule I attached hereto. In addition, Fifth Round funding is contingent on the execution of
an amendment to the HFA’s existing Commitment to Purchase Financial Instrument and HFA
Participation Agreement (together with related exhibits, schedules and other documents, the
HPA), in a form that will be provided by Treasury at a later date.

APPLICATION CATEGORIES
CATEGORY I: CONDITIONS OF APPLICATION ELIGIBLITY
Please briefly describe how the application for Fifth Round funds supports foreclosure
prevention and state housing market stabilization efforts, as well as the applicant’s performance
to-date in the Hardest Hit Fund.
• Applications must specify each existing and/or proposed program for which the HFA
intends to apply additional funding and explain how the program(s) support ongoing
foreclosure prevention and state housing market stabilization efforts through HHF.
• Applications that do not support foreclosure prevention and state housing market
stabilization efforts will not be considered.
• If an HFA has received a performance memorandum from Treasury, the HFA must
include a justification with performance data to demonstrate how it has addressed and/or
met Treasury’s expectations for performance improvement. All HFAs who have
received a performance memorandum from Treasury must complete this
component to be evaluated for additional funds.
CATEGORY II: DEMONSTRATED NEED (25 points)
Please briefly describe the current neighborhood stabilization and foreclosure prevention needs
of your jurisdiction. Use relevant statistics as appropriate.
• Consideration will be given to how clearly the need is articulated and the relevant data
provided to demonstrate the need.
• Relevant statistics may include, for example, recent trends in monthly production of
existing HHF program(s) (i.e., pipeline demand of current program) and current market
indicators related to mortgage delinquencies, foreclosures, unemployment, negative
equity, blight and/or vacancy.
• Any data or statistics provided should be accompanied by the relevant source and any
assumptions included within the analysis provided.
CATEGORY III – PLAN OF ACTION (50 points)
Please briefly describe your Plan of Action for the requested funds, including the program(s)
identified in Category I and how such program(s) directly relate to the need outlined in Category
II. In addition, briefly describe any changes to your program term sheet(s), organizational
structure (e.g. hiring additional staff,) or processes and procedures (e.g. acquiring a new
vendor), that are required to implement the Plan of Action.
• Consideration will be given to: the program(s) ability to address the need(s) identified in
Category II; whether design of the program(s) has a demonstrated record of effectiveness;
the implementation timeline (i.e., the speed at which the program(s) can be implemented
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•
•

and meet defined targets); and the existing track record of the HFA in utilizing previously
allocated HHF funds.
The Plan of Action must include clearly defined program targets (e.g., households
assisted, spending and utilization) that align with the need identified in Category II.
Any data or statistics provided must explain how the plan of action addressed the
demonstrated need, as described in Category II.

CATEGORY IV – ESTIMATED SPENDING PROJECTIONS (25 points)
Please provide estimated spending projections for both administrative expenses and program
disbursements, on a quarterly basis, for all HHF allocations (including the Fifth Round Formula
and Application Phases) through December 31, 2020. Estimates must demonstrate an ability to
utilize the existing HHF allocations as well as the Fifth Round Funding. Estimates should
indicate timing of any program or organizational changes required.
• Consideration will be given to whether spending estimates are reasonable based on past
performance of HFA and program(s) proposed, as well as efficient administration of the
program(s).
• Estimated spending projections should take into account any necessary revisions to
administrative expenses reflected on Schedule C to the HPA, and the cost of any program
or organizational changes necessary to implement the Plan of Action as described in
Category III.
• Relevant data may include, for example, projections based on HHF Quarterly
Performance or Financial Reports, Draw Schedules, or other HHF program-specific data
that accounts for operational and programmatic spending concerns.

INSTRUCTIONS FOR SUBMITTAL
Deadline
Applications must be submitted in PDF format to Hannah Resig at [email protected]
by 5:00 p.m. EST on Friday, March 11, 2016.
Format
Each application must include a one-page cover letter that provides: (i) the name, title, mailing
address, e-mail address, and phone number of the individual designated to receive
communications from Treasury concerning the Phase 2 application; and (ii) a certification
statement that the HFA (i.e., both the state housing finance agency and its designated “eligible
entity”) understands and agrees to the terms set forth in these guidelines.
Applications may not exceed 10, one-sided pages, prepared in 12-point, Times New Roman font
with 1 inch margins. Applications must not include other documents or attachments including
but not limited to generic marketing or sales information unless directly related to the ability of
the HFA to execute the proposed plan. Applications must not rely on cross-references to other
documents or websites unless directly related to the ability of the HFA to execute the proposed
plan.

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Applications should not include any personally identifiable information (PII) other than names, titles
and contact information for representatives of the HFA acting in their official capacity. Treasury reserves
the right to make publicly available any application (in its entirety) submitted to Treasury, including on
www.financialstability.gov.

Treasury Review
Applications will be scored according to the application checklist and reviewed by an
interdisciplinary committee within Treasury. The purpose of the review is to confirm that
applications adhere to the requirements of EESA and to evaluate how well the proposals fulfill
the criteria described herein. Treasury may contact the HFA with questions as part of its review
and may require the HFA to submit additional information. Treasury will notify the applicants
once all applications have been reviewed and approved. Treasury expects to complete this
process on or around April 20, 2016.
Communication with Treasury
HFAs are responsible for and encouraged to seek clarification on any aspect of these guidelines
that they do not fully understand. All questions should be directed to:
[email protected].
Treasury, in its sole discretion, may respond orally or in writing to any question(s) submitted by
an HFA or about an HFA’s application. Substantive questions should be submitted as soon as
possible. No information gained from any communication may be considered in any way binding
or limiting on Treasury.
Other Terms and Conditions
Treasury assumes no obligation to reimburse or otherwise compensate the HFA for expenses or
losses incurred in connection with these guidelines, other than as specifically detailed in the
HPA.
Treasury reserves the right to: (i) modify the requirements in these guidelines or withdraw these
guidelines at any time; (ii) negotiate with each HFA and confirm any application considered
acceptable in part or in total; (iii) request, orally or in writing, clarification of or additional
information on an application; (iv) waive minor informalities or irregularities, or any
requirement of these guidelines; and (v) reject an application that does not conform to the
requirements of these guidelines or for other reasons .
This information is being collected under OMB Control Number [__]. According to the
Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays a valid control number.

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Hardest Hit Fund Fifth Round Funding Allocation:
Schedule I – Utilization Thresholds
The following guidance applies to the Hardest Hit Fund (HHF) Fifth Round Funding Allocation
(Fifth Round) (Phase 1 – Formula and Phase 2 – Application), as announced by Treasury on
February 19. Only state housing finance agencies (HFAs) that currently participate in the
Hardest Hit Fund are eligible for the Fifth Round. Any additional funds received will be subject
to the following utilization thresholds:
•

By December 31, 2016, an HFA must have utilized 1 at least 70% of its existing allocation
(i.e., Rounds 1-4).
o If the threshold is not met, the HFA will forfeit 50% of any funds allocated under
the Fifth Round.

•

By December 31, 2017, an HFA must have utilized at least 95% of its existing allocation
(i.e., Rounds 1-4).
o If the threshold is not met, the HFA will forfeit up to 100% of any funds allocated
under the Fifth Round.

•

By December 31, 2018, an HFA must have utilized at least 80% of its Total Allocation
(i.e., Rounds 1-5).
o If the threshold is not met, the HFA will forfeit any funds allocated under the
Fifth Round that have not been obligated on behalf of a unique HHF program
participant (e.g., a homeowner) or property.

Fifth Round funds which are forfeited as described above will be reallocated to HFAs who meet
the above utilization thresholds, using a methodology similar to that used in Phase 1 – Formula.
Treasury reserves the right to adjust the utilization thresholds in the future.

1

Utilized refers to the amount drawn as of a given date by the HFA.

APPENDIX A: HHF Fifth Round Funding Allocation: Phase 2 - Application Checklist
Category
Conditions of Application Eligibility
HHF Programs Under EESA
Performance History

Eligibility Criteria

Point Max.

Does the program support foreclosure prevention and neighborhood stabilization efforts as
currently offered by HHF programs?
If an HFA has received a performance memorandum from Treasury, did the HFA must include
a justification with performance data that demonstrates how it has addressed and/or met
Treasury's expectations for performance improvement.

Program Specific Needs

Plan of Action (50 points)
Program Design

Operational Capacity

Program Targets

Length of Time to Implement

Estimated Spending Projections (25 points)

Does the application clearly articulate ongoing housing market needs?
State indicators exceed the national average; or applicable existing program application
pipeline indicates the need is ongoing
Local indicators exceed the state average; or applicable existing program application pipeline
in target areas indicate the need the is ongoing
Does the application clearly articulate how previous HHF funds were effectively used by the
HFA to address identified needs?
Does the application clearly demonstrate why the need is ongoing or persistent on the state
and/or local level?

Does the plan involve a) re-opening or providing additional funds to the HFA's existing
program(s) with limited changes; or b) introduction of a new program approved in another
state?
Does the plan align with the demonstrated needs presented?
Does the HFA have a demonstrated operational structure in place and/or experience for
implementing the plan?
Is there a reasonable staffing plan proposed, including training for new or inexperienced staff?
Does the plan of action include program targets that will have a meaningful impact on the
demonstrated need?
Does the plan target funding to the geographic areas or population(s) of greatest identified
need?
Does the plan proposed address program targets that align with spending and utilization
targets?
Do the program targets for households or properties assisted align with current production
rates and demonstrated need?
Does the HFA have a reasonable marketing and promotions plan to achieve program targets?
Can the HFA implement the plan through production phase (i.e. program launch, if applicable),
within 90 calendar days of HPA amendment?

Operational/Administrative Costs

Do the administrative spending projections and costs estimates reasonably reflect operational
needs outlined in the plan of action?

Utilization Reasonability

Do the estimated spending projections align with current utilization rates1?
Does the plan demonstrate the HFA's ability to utilize 70% of existing allocation by December
31, 2016?

Utilization Projections

Partially Addressed

N/A
N/A

Demonstrated Need (25 points)
Economic/Needs Indicators

Addressed

5
5
5
5
5

5
5
5
5
5
5
5
5
5
5

5
5
5

Not Addressed

Total Points

Reviewer Comments

Does the plan demonstrate the HFA's ability to utilize all of its existing allocation by December
31, 2017?
Does the plan demonstrate a reasonable way to utilize all requested funding by December 31,
2020?

5
5