Under certain circumstances, members and project sponsors or owners may be required to return AHP subsidies to the Federal Home Loan Bank of Chicago (FHLB Chicago). Checks should be made payable to or endorsed to the FHLB Chicago. Checks should be mailed to the following address: Community Investment Group Federal Home Loan Bank of Chicago 111 E. Wacker Drive, Suite 800 Chicago, IL 60601 Repayment by the Homeowner The FHLB Chicago must be given notice of any sale, refinancing, foreclosure, or change in owner-occupied status occurring prior to the end of the retention period. • In the case of a sale, a pro rata share of the AHP subsidy, reduced for every full month the seller(s) owned the unit and used it as their primary residence, shall be repaid to the FHLB Chicago from any net gain realized upon the sale of the unit after deduction for transaction costs incurred in both the original purchase and the sales transaction. If the purchaser is a low or moderate income household, i.e. at time of execution of sales contract having an income of 80% or less of area median income based on FHLBC income calculation guidelines, the obligation to repay the subsidy is terminated. • In the case of refinancing, a pro rata share of the AHP subsidy, reduced for every full month the seller(s) owned the unit and used it as their primary residence, shall be repaid to the FHLB Chicago from any net gain realized upon refinancing unless the unit continues to be subject to a legally enforceable retention agreement. • In the case of a foreclosure, the obligation to repay any subsidy is terminated after foreclosure. The AHP/DPP® repayment is calculated on a monthly basis with 1/60th of the subsidy forgiven for each full month. The member must include a Repayment Worksheet with the check. Click here for assistance with calculating a repayment. Repayment by the Project Sponsor/Owner The sponsor, or owner if applicable, will be responsible for repayment of all or a portion of the AHP subsidy in the following circumstances: Owner-Occupied Projects The AHP subsidy was used upfront for construction/rehab costs and: • A reduction in project development costs or an increase in financing sources reduces the need for the AHP subsidy. • The AHP subsidy was used for ineligible costs. • The benefit of the AHP subsidy was not passed through to the homebuyer/owner. • The project is out of compliance with the commitments made in the AHP application. Sponsors of owner occupied projects may be required to repay subsidies not used in compliance with the terms of the application that result from the sponsor's actions or omissions. Community Investment staff will determine the amount of AHP subsidy to be repaid and notify the project sponsor, or owner if applicable, in writing. Rental Projects • A reduction in project development costs or an increase in financing sources reduces the need for the AHP subsidy. • The AHP subsidy was used for ineligible costs. • The project is out of compliance with the commitments made in the AHP application. • In the case of a sale or refinancing of the project property prior to the end of the retention period, the full amount of the subsidy shall be repaid to the FHLB Chicago, unless the project continues to be subject to a deed restriction or other legally enforceable retention agreement or mechanism incorporating the income eligibility and affordability restrictions committed to in the AHP application (or subsequent approved modifications). • If a member or project sponsor lends a direct subsidy to a project any repayments of principal and payments of interest received by the member or sponsor must be paid forthwith to the FHLB Chicago. • Project sponsor, or owner if applicable, may be required to repay subsidies not used in compliance with the terms of the application that result from the sponsor's or owner's actions or omissions. Community Investment staff will determine the amount of AHP subsidy to be repaid and notify the project in writing.

How to Handle First Mortgage Refinancing • Agree to subordinate the junior mortgage that secures the AHP direct subsidy to refinanced first mortgage. No subsidy would have to be repaid. • Transfer the retention agreements to the new lender on the same terms and timetable. The new lender must also execute a Direct Subsidy Agreement with the FHLB Chicago to ensure repayment. No subsidy would have to be repaid. • Collect the unforgiven portion of the subsidy when the new loan is closed if neither of the first two options is chosen.