Cal. Civ. Code § 0770-01-01-.01

(1) Terms defined in the Act have the same meaning when used in these Rules and Regulations as are
ascribed to them in the Act.

(2) Act means the Tennessee Housing Development Agency Act, as amended, being Chapter 241, Public
Acts of 1973 and being Chapter 23 of Title 13 of the T.C.A.

(3) Applicant means a natural person or a corporation, or limited dividend entity or any combination
thereof, making application to receive Agency monies, assistance or services under the Act.

(4) Application means a request for Agency assistance under the Act made on forms provided by the
Agency and containing such information as the Executive Director requires.

(5) Agency means the Tennessee Housing Development Agency created by the Act.

(6) Agency Board means the members of the Board of Directors in whom in the powers of the Agency are
vested pursuant to the Act.

(7) Agency mortgage loan means an insured loan as defined in §3 (7) of the Act, (T.C.A. §13--23--
103(7)) or a commitment to make an insured mortgage loan authorized by resolution of the Agency
and made or to be made to person or family of low and moderate income to provide long-term
financing for a housing unit or to provide long-term financing to a housing sponsor for a housing
development; or an insured construction loan as defined in §3 (6) of the Act, (T.C.A. §13--23--103(6))
as a temporary loan for the purpose of providing financing to an individual for construction or
rehabilitation of a housing unit or to a housing sponsor for a housing development; and made or to be
made in whole or in part from the proceeds of sale of the Agency’s notes or bonds and any other
available funds, including a mortgage loan involving participation by the Agency with a qualified
lender(s).

(8) Housing unit means residential housing intended for occupancy by a single household and which will
be owned by the occupant thereof.

(9) Residential housing means a specific work or improvement within this state undertaken primarily to
provide dwelling accommodations for persons and families of lower and moderate income including
the acquisition, construction or rehabilitation of land, buildings and improvements thereto and such
other nonhousing facilities as may be incidental or appurtenant thereto (‘‘ancillary facilities’’).

(10) Executive Director. The person duly appointed to serve as Executive Director of the Tennessee
Housing Development Agency pursuant to T.C.A. §13--23--112. The Executive Director may
delegate any of the functions and powers conferred upon him by the Board or pursuant to these
regulations to such officers, agents and employees as he may designate or appoint. The Executive
Director shall administer all programs of the Agency and exercise all powers prescribed by Resolution
of the Agency Board.

(11) Household. One or more individuals regardless of blood or legal ties who live as, and are considered, a
family unit.

(12) Gross Annual Household Income means the total gross annual income of all members of the
household, excluding the following:

(a) All earnings of any dependent under 18 years of age, or any dependent household member
who is physically or mentally handicapped (as defined by THDA).

(b) Up to $3,000 of the earnings of any dependent household member who is not a title-holding
mortgagor and who is 62 years of age or older.

(13) Gross Annual Income means the total income, before taxes and other deductions, received during the
twelve months immediately preceding the month in which the application is taken. This includes all
wages, social security payments, retirement benefits, military and veteran’s disability payments,
unemployment benefits, welfare benefits, interest and dividend payments, and all other income derived
from any sources. It does not include educational benefits received from the Veteran’s Administration
or child support payments.

(14) Dependent. That person or those persons who are eligible to be claimed as an exemption or
exemptions on the applicant’s federal income tax return as determined under the federal income tax
regulations, (Sub-Chapter A Part 1 of the Internal Revenue Code) if such return were to be filed on the
date of the mortgage application.

(15) Persons and Families of Lower and Moderate Income means for purposes of the Homeownership
Loan Program households whose gross annual income does not exceed the limits established by the
Board subject to approval of the Bond Finance Committee; but which will not in any event exceed the
income limits prescribed in Section 143(f) of the Internal Revenue Code of 1986, as amended.

(16) Qualified Sponsor means sponsors, developers, builders, purchasers and licensed general contractors
qualifed under the Act and these regulations and approved by the Board pursuant to its authority
granted by Section 3 (17) of the Act, T.C.A. §13--23--103(17).

(17) Adjusted Income means the gross annual income of all members of the household from all sources
(before taxes and withholdings), after deducting the following:

(a) a credit in an amount equal to the lesser of $1,000.00 or 10% of total annual income of all
household members,

(b) a credit in an amount equal to all earnings of any dependent household member who is a
minor under 18 years of age, or who is physically or mentally handicapped as determined by
the agency based on medical evidence from a licensed physician,

(c) a credit in the amount of $500.00 for each dependent for whom an exemption is allowed to
the head of household pursuant to Section 151 of the Internal Revenue Code [other than the
head of household as determined by the agency rule 101(12)],

(d) non-recurring income as determined by the agency in accordance with its Rules of Practice,
and

(e) a credit in an amount equal to one-half (1/2) of the total earnings of all household members
over 18 years of age, who are secondary wage earners (those wage earners other than the head
of household), provided, however, such credit shall not exceed $2,000.00.

(18) Persons and Families of Lower and Moderate Income. For the purpose of the Rental Housing Loan
Program Rules 0770--1--4 of the regulations, ‘‘persons and families of lower and moderate income’’
shall be those households whose ‘‘Adjusted Income’’ does not exceed the median family income, as
determined by the most recently available HUD statistics applicable to those persons and families as
determined by the agency to be within the county in which the housing development is located. The
agency may vary the applicable county median family income on the basis of its finding higher or
lower prevailing costs and conditions of housing facilities available for housing and housing costs
within the county in which the housing development is located.

(19) Urban County means: Anderson, Blount, Bradley, Carter, Cheatham, Coffee, Davidson, Dickson,
Hamblen, Hamilton, Hawkins, Knox, Madison, Marion, Maury, Montgomery, Putman, Robertson,
Rutherford, Sequatchie, Sullivan, Sumner, Tipton, Unicoi, Union, Washington, Williamson, and
Wilson counties.

(20) Non-Urban County means any county not defined as an urban county.

Authority: T.C.A. §13--23--115(18). Administrative History: Original rule filed July 24, 1974; effective August 23,
1974. Amendment filed November 12, 1974; effective December 12, 1974. Amendment filed September 19, 1975;
effective October 19, 1975. Amendment filed April 7, 1976; effective May 7, 1976. Amendment filed January 28,
1977; effective February 28, 1977. Amendment filed August 15, 1979; effective September 28, 1979. Amendment
filed February 20, 1980; effective April 5, 1980. Amendment filed April 29, 1981; effective July 29, 1981.
Amendment filed February 26, 1982; effective June 1, 1982. Amendment filed October 8, 1982; effective November
8, 1982. Amendment filed August 12, 1992; effective September 26, 1992.