1. HFA Initiative Webinar Monday, November 23, 2009 2 p.m. – 4 p.m.

2. 2 Agenda 1.Accomplishments 2.Securitization Calendar 3.Resolution of Outstanding Issues

3. 3 Accomplishments NIBP Allocation NIBP Deals TCLP Allocations TCLP Deals SF$13.9B132$8.4B18 MF$4.6B55$2.1B11 Total$18.5B187$10.5B29 Program Announced – October 19 Applications Submitted – October 27 Allocations Released – November 19, 2009 NIBP Applications NIBP Requests State HFAs51$17.6 Billion Local HFAs97$4.8 Billion NOTE: NIBP Allocation Includes Bond Credit Enhancement

4. 4 Accomplishments Customer Communication Hosted 6 nationwide webinars with total participation of over 1,000 people. Prepared detailed answers to over 250 questions submitted through the HFA Initiative mailbox. Customer Outreach Over 100 people from Treasury, FHFA and the GSEs have contributed to the development and implementation of this Program. Among both GSEs, over 40 deal managers and attorneys are working side-by-side with nearly 150 individual state and local housing issuers to help execute and close over 300 discrete transactions by the end of 2009.

5. 5 Accomplishments Program Materials In conjunction with Treasury and FHFA, provided detailed fact sheets, program applications, due diligence submission materials, and detailed Program Term Sheets. Program Legal Documents include: 1.New Issue Bond Program: Settlement Agreement (SF/MF) Placement Agreement (SF/MF) 2.Temporary Credit and Liquidity Program: Reimbursement Agreement (SF/MF) Temporary Credit and Liquidity Facility (SF/MF) Supplement to Indenture (SF) Supplement to Indenture (MF)

6. 6 Securitization Calendar - NIBP December Close Due DateMilestone Nov 19Letter of Intent due Nov 23GSE Counsel Legal Fee Deposit due Dec 1– 8For those HFAs fixing a long-term permanent interest rate in 2009, State Street, acting as Treasury’s agent, will provide interest rates for the Program Bonds, subject to confirmation on December 9. On/before Dec 9 Executed final Placement Agreement due to GSE Special Closing Counsel. Executed final Settlement Agreement due to GSE Special Closing Counsel. HFAs provide final Official Statement and 10b-5 Certificate to GSE Special Closing Counsel. Dec 9For those HFAs fixing a long-term permanent interest rate, long-term interest rates confirmed. Dec 9-13HFA and Bond Counsel pre-close Program Bond transactions. Dec 11The HFA shall do all things necessary to register the Program Bonds with DTC and make the Program Bonds DTC FAST-eligible. The HFA Special Advisor shall deliver the completed DTC Eligibility Questionnaire and the Letter of Representation to DTC, with copies delivered to US Bank, acting as Closing Agent.

7. 7 Due DateMilestone Dec 14All HFA Closing Documents outlined in the Placement Agreement must be delivered to GSE Special Closing Counsel. Dec 14-21HFA delivers signed Program Bond certificate to Bond Trustee for authentication and retention as DTC's agent under FAST. Dec 18Bond Trustee delivers certification to US Bank confirming the Bond Trustee holds a cash deposit from the HFA equal to the required fees (i.e. GSE Legal Counsel fees, GSE Securitization fees, and other costs of issuance). Dec 21Program Bonds are settled through DTC and delivered directly to US Bank, acting as Closing Agent, to be held in escrow pending a December 23 closing. Dec 23GSE securities issued to JPMorgan Chase, acting as Treasury’s agent, and purchased simultaneously by Treasury. GSE Legal Counsel fees and GSE Securitization fees are netted against settlement proceeds and GSE Legal Fee Deposits. HFA receives net settlement proceeds. Securitization Calendar - NIBP December Close

8. 8 Due DateMilestone Nov 19Letter of Intent due Nov 23GSE Counsel Legal Fee Deposit due Dec 10-17For those HFAs fixing a long-term permanent interest rate in 2009, State Street, acting as Treasury’s agent, will provide interest rates for the Program Bonds, subject to confirmation on December 18. On/before Dec 18 Executed final Placement Agreement due to GSE Special Closing Counsel. Executed final Settlement Agreement due to GSE Special Closing Counsel. HFAs provide final Official Statement and 10-b5 Certificate to GSE Special Closing Counsel. Dec 18For those HFAs fixing a long-term permanent interest rate, long-term interest rates confirmed. The HFA shall do all things necessary to register the Program Bonds with DTC and make the Program Bonds DTC FAST-eligible. The HFA Special Advisor shall deliver the completed DTC Eligibility Questionnaire and the Letter of Representation to DTC, with copies delivered to US Bank, acting as Closing Agent. Dec 18-23HFA and Bond Counsel pre-close Program Bond transactions. Securitization Calendar - NIBP January Close

9. 9 Due DateMilestone Dec 23-30HFA delivers signed Program Bond certificate to Bond Trustee for authentication and retention as DTC's agent under FAST. Dec 24All HFA Closing Documents outlined in the Placement Agreement must be delivered to GSE Special Closing Counsel. Dec 28Bond Trustee delivers certification to US Bank confirming the Bond Trustee holds a cash deposit from the HFA equal to the required fees (i.e. GSE Legal Counsel fees, GSE Securitization fees, and other costs of issuance). Dec 30Program Bonds are settled through DTC and delivered directly to US Bank, acting as Closing Agent, to be held in escrow pending a January 12 closing. Jan 12GSE securities issued to JPMorgan Chase, acting as Treasury’s agent, and purchased simultaneously by Treasury. GSE Legal Counsel fees and GSE Securitization fees are netted against settlement proceeds and GSE Legal Fee Deposits. HFA receives net settlement proceeds. Securitization Calendar - NIBP January Close

10. 10 Due DateMilestone Dec 1TCLP Transactions Begin to Close By Dec 30VRDO Bond Trustee gives notice to bondholders of mandatory tender, where required. Execution and delivery of all legal documents to the GSE Special Closing Counsel for the substitution of credit facilities and payout of fees. – Reimbursement Agreement – Temporary Credit & Liquidity Facility – Supplemental Bond Indenture/Resolution – Official Statement – Bond Counsel Opinion – Other transaction documents Jan 29, 2010Last day HFAs can tender bonds. Closing Calendar - TCLP

11. 11 Resolution of Outstanding Issues 1. Allocations Rate Lock Process State Street Global Advisors (SSgA), acting as Treasury’s Agent, will provide long-term permanent interest rates for those HFAs fixing their interest rate in in 2009. Guidance on the specific process for obtaining rates will be provided by SSgA on Wednesday, November 25 and posted to the trade association web sites. Redistribution of Unexpended Allocation As previously discussed, to the extent there is unused local or state allocation capacity, there may be a reallocation of unused capacity. This reallocation is still under consideration with Treasury and details and timing will be announced when available.

12. 12 2. Role of GSE Special Counsel: NIBP The overall objectives of the GSE Special Counsel for the NIBP are: 1.Assist HFAs and their counsels in working through Program issues, as well as integrating the Program Indenture and its unique provisions into HFA Resolutions or Indentures; 2.Provide coordination between the bond issuance process and the securitization process, which is unprecedented in this form of housing bond financing; and 3.Assure and certify to the GSEs and ultimately to Treasury that all appropriate requirements and conditions of the Program are met. Resolution of Outstanding Issues

13. 13 2. Role of GSE Special Counsel: TCLP The overall objective of the GSE Special Counsel for the TCLP are: 1.Prepare new transaction documents and review a wide variety of issuer documents in order to resolve any conflicts with current VRDOs and assure consistency with the Program 2.Support the development of securitization documents and protocols to support a securitization process for the financing of Bank Bonds 3.Certify to the GSEs and ultimately to Treasury that all documents meet the particular requirements of the Program. Resolution of Outstanding Issues

14. 14 Resolution of Outstanding Issues 3. Legal Fees ExecutionOriginalRevised NIBP One Issuance (Simultaneous or Escrow, SF or MF) Dual Issuances 1 (Simultaneous & Escrow, SF Only) Escrow Release (Per individual SF or MF Release) – Max of 3 releases for SF and 3 releases for MF $ 52,500 $ 80,000 $ 7,500 $ 52,500 $ 60,000 $ 7,500 TCLP 1 st Indenture (Includes Initial Series) Successive Indentures (Includes Initial Series) Additional Series Under Same Indenture $42,500 $10,000 $ 42,500 $ 25,000 $ 1,000 to $ 2,500 1 For SF NIBP, the escrow and simultaneous issuances must come out of the same indenture and must close on the same day.

15. 15 Resolution of Outstanding Issues 4. Legal Documents Six HFA Program Legal Documents are currently available on association web sites, 2 additional documents will be available shortly. Completed and Posted: 1.New Issue Bond Program (updated forms week of 11/23) : SF & MF Settlement Agreements SF & MF Placement Agreements 2.Temporary Credit and Liquidity Program: Reimbursement Agreement (SF/MF) Temporary Credit and Liquidity Facility (SF/MF) Supplement to Indenture (SF) Supplement to Indenture (MF) Pending Completion: 1.Supplement to Indenture (SF) 2.Supplement to Indenture (MF)

16. 16 5. Special Advisor In order to ensure the successful settlement of the Program Bonds and the GSE Securities, HFAs must: a.do all things necessary to register the Program Bonds with DTC so they can be settled, released and credited to the Closing Agent on the pre-settlement day, and b.provide the GSEs with a 10b-5 opinion with respect to the Official Statement issued for the Program Bonds. The Special Advisor may be any experienced party able to successfully perform the duties detailed in the Placement and Settlement Agreements with regard to properly setting up and processing bonds through DTC. The 10b-5 opinion need not be delivered by counsel to the Special Advisor so long as an acceptable 10b-5 opinion is delivered to the GSEs. Resolution of Outstanding Issues

17. 17 Resolution of Outstanding Issues 6. Replacement Refundings Focus on New Mortgage Originations For the purposes of this Program, the objective of a replacement refunding should be to carry forward unused volume cap from preexisting issues of bonds into a new issue of bonds, resulting in new mortgage originations. Use of Market Bonds For the purposes of this Program, Market Bond proceeds may be used for: a.replacement refundings, b.absorbing any economic refunding associated with replacement refundings, and c.refunding previously issued bonds, the proceeds from which have been partially invested in mortgage loans.

18. 18 Resolution of Outstanding Issues 6. Replacement Refundings (cont) Use of Program Bonds Based on the parameters described, Program Bond proceeds may be used for replacement refundings only if: a.all Market Bond proceeds have first been applied to replacement refundings, and b.Program Bond proceeds applied to replacement refundings are exclusively for the origination of new mortgages.

19. 19 Resolution of Outstanding Issues 7.NIBP - Withdrawals from Indentures Covenants in the supplemental indentures for the NIBP have been revised to provide additional flexibility to Issuers to withdraw funds from the lien of the Indenture, as follows: (a)The Issuer shall take all steps necessary to assure that all assets and revenues of any description pledged to the payment of the Program Bonds and all other bonds issued under the Indenture shall be applied strictly in accordance with, and solely for the purposes and in the amounts specified and permitted by, the terms of the Indenture. (b)The Issuer shall not exercise any rights it may have to make voluntary withdrawals of cash or other assets from the lien of the Indenture except under the following circumstances and within the following limits: (1) No withdrawals whatsoever shall be made during any period when any of the long term credit ratings on the Program Bonds are below the initiallong term credit ratings of the Program Bonds required in connection with the Single Family New Issue Bond Program.

20. 20 Resolution of Outstanding Issues 7.NIBP - Withdrawals from Indentures (cont) (2) No withdrawals whatsoever shall be made to the extent that such withdrawal would adversely affect any of the long term credit ratings on the Program Bonds that are effective immediately prior to such withdrawal. (3) The withdrawal is made only for internal purposes of the Issuer, including, but not limited to, funding a program sponsored by the Issuer or paying administrative expenses of the Issuer. (4) Withdrawals shall be made only to (i) fund programs sponsored by, or other administrative expenses of, the Issuer which have been historically funded with the proceeds of withdrawals from the Indenture, and the annual amount of such withdrawals shall be consistent with the annual amount of past withdrawals for such purpose; or (ii) permit the Issuer to withdraw cash for internal purposes of the Issuer if the amount to be withdrawn is: (A) a return of capital previously contributed to the Indenture by the Issuer in cash or as a cash equivalent; or

21. 21 Resolution of Outstanding Issues 7.NIBP - Withdrawals from Indentures (cont) (B) an unpaid administrative fee payable to the Issuer, unreimbursed expense incurred by the Issuer on behalf of the Indenture, unpaid ratable allocation of overheads of the Issuer to its various indentures and housing programs of the Issuer, unpaid contribution to an official housing program of the Issuer, or an unpaid item of a similar nature inuring to the benefit of the Issuer or any of its housing programs, from a prior period where: (i) under the terms of the Indenture, as in effect during such period, the payment or withdrawal could have been made from the Indenture for such purpose; and (ii) if the payment or withdrawal was then permitted under the applicable financial release requirements of the Indenture; the Issuer took official action to retain the amount in the Indenture under terms where the payment or withdrawal was deferred to a later time.

22. 22 Resolution of Outstanding Issues 7.NIBP - Withdrawals from Indentures (cont) (5) The Program Bonds are then rated by a Rating Agency and prior to and as a condition to each withdrawal, the Issuer shall obtain and furnish to the GSEs and to Treasury a confirmation from each of the Rating Agencies then maintaining a long term rating on the Program Bonds that, immediately after such proposed withdrawal: (i) the rating on the Program Bonds will be not less than [specify exact rating of the Program Bonds as of the issue date]; and (ii) the rating outlook assigned to the Program Bonds will be either “Stable” or “Positive” or the equivalent. (6) Prior to and as a condition to each withdrawal, the Issuer shall provide a written certification to the GSEs and to Treasury specifying the amount and purpose of the withdrawal and that the requirements of this subpart (b) have been met with respect to such withdrawal.

23. 23 Resolution of Outstanding Issues 8. I/O Strips The original position on I/O strips is reaffirmed. I/O strips from Program Bonds or mortgage loans are not permitted. 9. Investment of Escrow Proceeds The specific investment vehicle used for the escrow proceeds is still being determined.

24. 24 10. Q&As Effective Monday, November 23 at 5 p.m. eastern time, the GSEs will no longer be responding to questions submitted through the Kutak website. Instead, we urge issuers and members of their working groups to pose questions directly to their GSE Deal Teams. The Deal Teams will respond directly to specific deal questions posed by their assigned issuers and answers to general program questions will continue to be coordinated between the GSEs and disseminated through the association websites in the form of Q&As. Resolution of Outstanding Issues

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