up to $30,000,000 sedgwick county, kansas and shawnee ... · * the 2009a-1 program bonds will bear...

NEW ISSUE—BOOK ENTRY ONLY

In the opinions of Co-Bond Counsel, assuming compliance with certain covenants and procedures described herein, under existing law, regulations, rulings and judicial decisions, interest on the 2009A-1 Bonds is not includable in gross income of the owners thereof for federal income tax purpose, is not a specific preference item for purposes of the federal alternative minimum tax, is not included in the computation of “adjusted current earnings” for purposes of the federal alternative minimum tax applicable to corporations, and is exempt from Kansas income taxation. See “Tax Matters.”

Up to $30,000,000 SEDGWICK COUNTY, KANSAS and SHAWNEE COUNTY, KANSAS

Single Family Mortgage Revenue Bonds Up to $12,000,000 Series 2009A-1 (Non-AMT) (Market Bonds)

Up to $18,000,000 Series 2009A-1 (Non-AMT) (Program Bonds) Interest Accrues from 2009A-1 Release Date Due: See Inside Front Cover

The above-referenced Market Bonds (the “2009A-1 Market Bonds”) will be issued in book-entry, fully registered form in Authorized Denominations as defined herein. Interest on and principal of the 2009A-1 Market Bonds will be payable as described herein by UMB Bank, N.A., as trustee (the “Trustee”), to Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York. See “The 2009A-1 Bonds.”

The 2009A-1 Market Bonds will be issued simultaneously with the release from escrow of bond proceeds relating to the above-referenced Program Bonds which were originally issued on December 23, 2009 (the “2009A-1 Program Bonds, and collectively with the 2009A-1 Market Bonds, the “2009A-1 Bonds”). The 2009A-1 Program Bonds are not being offered by this Official Statement but information relating to such bonds is contained herein. This Official Statement supplements the original Official Statement delivered with respect to the 2009A Program Bonds.

The principal amounts of 2009A-1 Market Bonds to be issued on November 18, 2010 (the “2009A-1 Release Date”) and the amount of 2009A-1 Program Bonds to be released on the 2009A-1 Release Date will depend on the principal amount of 2009A-1 Mortgage Loans originated under the Issuer’s Program and certain other factors and will not be determined until the 2009A-1 Permanent Rate Calculation Date, which will occur not less than seven days prior to the 2009A-1 Release Date. See “The 2009A-1 Bonds—General.”

The 2009A-1 Bonds will be secured under the terms of a Trust Indenture dated as of December 1, 2009, and a Release Date Annex relating to the 2009A-1 Bonds (collectively, the “Indenture”), between the Sedgwick County, Kansas and Shawnee County, Kansas (collectively, the “Issuer”) and the Trustee, in accordance with the provisions of the United States Treasury Department’s New Issue Bond Program. The proceeds of the 2009A-1 Bonds will be used to make funds available to finance qualifying mortgage loans for single family residences located in the Issuer’s Program Area (as defined herein), through the purchase by the Trustee on behalf of the Issuer of fully-modified mortgage-backed securities (the “Certificates”). The Certificates will be guaranteed as to timely payment of principal and interest by the Government National Mortgage Association (“GNMA”), Fannie Mae or the Federal Home Loan Mortgage Corporation (“Freddie Mac”).

The 2009A-1 Bonds are subject to redemption prior to maturity as described herein. It is expected that substantial portion of the 2009A-1 Bonds will be redeemed prior to the stated maturity date thereof. See “The 2009A-1 Bonds—Redemption” and “Structuring Assumptions and Risks.”

The 2009A-1 Bonds are special, limited obligations of the Issuers, payable solely out of the revenues, receipts, and security pledged therefor under the Indenture. The 2009A-1 Bonds will be secured on a parity basis with other Program Bonds the proceeds of which are released and other Market Bonds issued under the Indenture. The 2009A-1 Bonds do not constitute a general obligation or indebtedness of either Issuer within the meaning of any constitutional or statutory provision or limitation. The 2009A-1 Bonds do not constitute a debt or obligation of the State of Kansas, or any political subdivision, agency or instrumentality thereof, and shall not constitute a lien on or pledge of any property of either Issuer except as provided in the Indenture. The 2009A-1 Bonds are not obligations of, or guaranteed by, GNMA, Fannie Mae or Freddie Mac.

The 2009A-1 Market Bonds are offered, when, as and if issued, subject to the approval by the Issuer, and the approval of certain legal matters by the Gilmore & Bell, P.C., and Robert J. Perry, Esq., Auburn, Kansas, Co-Bond Counsel. Certain legal matters will be passed upon for the Underwriter by its counsel, Greenberg Traurig, LLP. It is expected that the delivery of the 2009A-1 Market Bonds will delivered to DTC in New York, New York on or about November 18, 2010.

George K. Baum & Company July 23, 2010

MATURITY SCHEDULE

NOTE: THE 2009A-1 BOND PRINCIPAL AMOUNTS SHOWN BELOW ARE THE MAXIMUM PRINCIPAL AMOUNTS AND THE ACTUAL PRINCIPAL AMOUNTS DELIVERED ON THE 2009A-1 RELEASE DATE MAY BE LESS; THE FINAL PRINCIPAL AMOUNTS ARE BASED ON THE PRINCIPAL AMOUNTS OF 2009A-1 MORTGAGE LOANS ORIGINATED AND VARIOUS OTHER FACTORS. THE FINAL PRINCIPAL AMOUNTS OF THE 2009A-1 MARKET BONDS AND THE 2009A-1 PROGRAM BONDS WILL BE DETERMINED ON OR ABOUT NOVEMBER 4, 2010, OR SUCH OTHER DATE SELECTED BY THE ISSUERS (THE “2009A-1 FINAL BOND AMOUNT DETERMINATION DATE”). ANY REDUCTIONS OF 2009A-1 MARKET BOND AND 2009A-1 PROGRAM BOND PRINCIPAL AMOUNT WILL BE MADE ON A RATABLE BASIS BASED ON THE RELATIVE MAXIMUM PRINCIPAL AMOUNTS. THE FINAL 2009A-1 MARKET BOND AMOUNTS OF EACH MATURITY WILL ALSO BE DETERMINED ON A RATABLE BASIS BASED ON THE MAXIMUM 2009A-1 MARKET BOND PRINCIPAL AMOUNTS SHOWN BELOW. THIS OFFICIAL STATEMENT MAY BE SUPPLEMENTED TO REFERENCE FINAL PRINCIPAL AMOUNTS. SEE “THE 2009A-1 BONDS—GENERAL.”

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SEDGWICK COUNTY, KANSAS and SHAWNEE COUNTY, KANSAS Single Family Mortgage Revenue Bonds

Up to $12,000,000 Series 2009A-1 (Non-AMT) (Market Bonds)

(“2009A-1 Market Bonds”)

$2,660,000 Serial Bonds (Price of each Maturity: 100%)

Maturity Date Principal

Amount ($) Interest

Rate (%)

CUSIP Maturity Date Principal

Amount ($) Interest

Rate (%)

CUSIP

June 1, 2011 December 1, 2011 June 1, 2012 December 1, 2012 June 1, 2013 December 1, 2013

$190,000 250,000 255,000 255,000 260,000 260,000

0.90% 1.00 1.15 1.25 1.60 1.70

815266 MC2 815266 MD0 815266 ME8 815266 MF5 815266 MG3 815266 MH1

June 1, 2014 June 1, 2017 June 1, 2019 December 1, 2019 June 1, 2021 December 1, 2021

$265,000 130,000 190,000 190,000 205,000 210,000

1.95% 3.15 3.70 3.70 4.05 4.05

815266 MJ7 815266 MQ1 815266 MU2 815266 MV0 815266 MY4 815266 MZ1

$2,015,000 3.25% Term Bonds due December 1, 2020 (Price: 100%) (CUSIP: 815266 MX6)

$3,325,000 4.65% Term Bonds due June 1, 2028 (Price: 100%) (CUSIP: 815266 NA5)

$4,000,000 5.00% (Premium PAC) Term Bonds due December 1, 2028 (Price: 107.125%) (CUSIP: 815266 NB3)

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SEDGWICK COUNTY, KANSAS and SHAWNEE COUNTY, KANSAS Single Family Mortgage Revenue Bonds

Up to $18,000,000 Series 2009A-1 (Non-AMT) (Program Bonds)

(“2009A-1 Program Bonds”)

—NOT OFFERED BY THIS OFFICIAL STATEMENT—

Up to $18,000,000 3.92%* Term Bonds due December 1, 2041 (CUSIP: 815266 NC1)

* The 2009A-1 Program Bonds will bear interest at the applicable Short-Term Rate for two months from the 2009A-1 Release Date before converting to the Permanent Rate of 3.92% per annum.

*************************************************************************************

No broker, salesman or other person has been authorized by the Issuer to give any information or to make any representations, other than as contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the 2009A-1 Market Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein by the Issuer has been obtained from sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness. All summaries herein of documents and agreements are qualified in their entirety by reference to such documents and agreements, and all summaries herein of the 2009A-1 Bonds are qualified in their entirety by reference to the form thereof included in the Indenture and the provisions with respect thereto included in the aforesaid documents and agreements. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the information or opinions set forth herein after the date of this Official Statement.

THE 2009A-1 BONDS ARE EXEMPT FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION AND CONSEQUENTLY HAVE NOT BEEN REGISTERED THEREWITH. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE BONDS IN ACCORDANCE WITH APPLICABLE SECURITIES LAW PROVISIONS OF ANY JURISDICTION IN WHICH THESE SECURITIES HAVE BEEN QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF.

TABLE OF CONTENTS

INTRODUCTION............................................................... 1 THE ISSUERS.................................................................... 3 THE 2009A-1 BONDS ....................................................... 3 General ................................................................................ 3 Book-Entry Only System .................................................... 4 Payment, Transfer and Exchange ........................................ 4 Redemption ......................................................................... 5 Notice of Redemption ......................................................... 8 SOURCES AND USES OF FUNDS .................................. 9 SECURITY FOR THE 2009A-1 BONDS .......................... 9 General ................................................................................ 9 GNMA MORTGAGE-BACKED CERTIFICATE

PROGRAM .................................................................. 10 FANNIE MAE MORTGAGE-BACKED

CERTIFICATE PROGRAM ........................................ 11 General .............................................................................. 11 Fannie Mae Certificates .................................................... 13 Payments on the 2009A-1 Mortgage Loans;

Distributions on the Fannie Mae Certificates .............. 13 FREDDIE MAC MORTGAGE-BACKED

SECURITIES PROGRAM.......................................... 14 General .............................................................................. 14 Freddie Mac Guarantor Program....................................... 16 Freddie Mac Certificates ................................................... 16 Mortgage Purchase and Servicing Standards .................... 17 FLOW OF FUNDS ........................................................... 17 2009A-1 Account of Program Fund .................................. 17 2009A-1 Account of Capitalized Interest Fund................. 18 2009A-1 Account of Cost of Issuance Fund ..................... 18 2009A-1 Account of Revenue Fund.................................. 18 2009A-1 Account of Interest Fund.................................... 19 2009A-1 Account of Principal Fund ................................. 19 2009A-1 Account of Redemption Fund ............................ 19 2009A-1 Account of Program Expense Fund.................... 19 2009A-1 Account of Rebate Fund..................................... 20 STRUCTURING ASSUMPTIONS AND RISKS............. 20 Average Life of Bonds ...................................................... 22 THE ISSUER’S PROGRAM ............................................ 24 General .............................................................................. 24 Description of 2009A-1 Mortgage Loans.......................... 24 Mortgage Loan Eligibility Requirements .......................... 25 Purchase of Certificates..................................................... 25 The Servicer ...................................................................... 25

THE INDENTURE............................................................26 Investment of Funds...........................................................26 Certain Tax Covenants.......................................................26 Defaults and Remedies; Rights of Bondholders ................27 Supplemental Indentures....................................................28 The Trustee ........................................................................29 Defeasance.........................................................................30 Assumptions of 2009A-1 Mortgage Loans ........................31 TAX MATTERS ...............................................................32 General...............................................................................32 Mortgage Eligibility Requirements....................................32 Arbitrage Requirements .....................................................33 Compliance with Tax Requirements..................................33 Other Tax Consequences for 2009A-1 Bonds....................34 Other Considerations for 2009A-1 Bonds..........................34 Sale, Exchange or Retirement of 2009A-1 Bonds .............35 THE CONTINUING DISCLOSURE AGREEMENT.......35 Definitions .........................................................................35 Provision of Annual Bond Disclosure ...............................35 Content of Annual Bond Disclosure Reports.....................36 Reporting of Significant Events.........................................36 Termination of Reporting Obligation ................................37 Dissemination Agent..........................................................37 Amendment; Waiver..........................................................37 Additional Information ......................................................37 Default ...............................................................................38 Beneficiaries ......................................................................38 NO LITIGATION..............................................................38 LEGAL MATTERS...........................................................38 RATING ............................................................................39 UNDERWRITING ............................................................39 MISCELLANEOUS ..........................................................40 APPENDIX A DEFINITIONS ...................................... A-1 APPENDIX B BOOK-ENTRY ONLY SYSTEM..........B-1 APPENDIX C FORM OF CO-BOND COUNSEL

OPINION ....................................................................C-1 APPENDIX D TABLE OF OUTSTANDING BOND

AMOUNTS ................................................................ D-1

(THIS PAGE LEFT BLANK INTENTIONALLY)

Up to $30,000,000 SEDGWICK COUNTY, KANSAS and SHAWNEE COUNTY, KANSAS

Single Family Mortgage Revenue Bonds Up to $12,000,000 Series 2009A-1 (Non-AMT) (Market Bonds)

Up to $18,000,000 Series 2009A-1 (Non-AMT) (Program Bonds)

INTRODUCTION

This Official Statement (including the cover page and appendices) sets forth certain information relating to the sale and issuance by the Sedgwick County, Kansas and Shawnee County, Kansas (jointly, the “Issuers”) of up to $12,000,000 aggregate principal amount of its Single Family Mortgage Revenue Bonds, Series 2009A-1 (the “Market Bonds”).

This Official Statement also contains information concerning the release from escrow of up to $18,000,000 of bond proceeds relating to the above-referenced Program Bonds (the “2009A-1 Program Bonds,” and together with the 2009A-1 Market Bonds, the “2009A-1 Bonds”). The 2009A-1 Program Bonds are not offered by this Official Statement; however, this Official Statement supplements the original Official Statement dated December 9, 2009 relating to the 2009A Program Bonds (as defined below) with information relating to the 2009A-1 Program Bonds.

The principal amounts of each maturity of 2009A-1 Market Bonds to be issued on November 18, 2010 (the “2009A-1 Release Date”), and the principal amount of 2009A-1 Program Bonds to be released on the 2009A-1 Release Date, will depend on the principal amount of 2009A-1 Mortgage Loans originated under the Issuer’s Program and certain other factors, and the final Bond amounts will be determined prior to the 2009A-1 Release Date, on or about November 4, 2010, or such other date selected by the Issuers (the “2009A-1 Final Bond Amount Determination Date”). See “The 2009A-1 Bonds—General.”

On December 23, 2009, the Issuers issued $120,000,000 principal amount of their Single Family Mortgage Revenue Bonds, 2009 Series A (the “2009A Program Bonds”) pursuant to the New Issue Bond Program (the “NIBP”) authorized by the United States Treasury Department. The 2009A Program Bonds initially bear interest at the Short-Term Rate and the related bond proceeds are held in a restricted escrow account pending the satisfaction of certain conditions, including the issuance of Market Bonds in a minimum amount satisfying the Market Bond Ratio Requirement. Upon satisfaction of such conditions, the related 2009A Program Bond proceeds are released from escrow, and together with the proceeds of the Market Bonds, are made available to purchase pass-through certificates (the “Certificates”) backed by 2009A-1 Mortgage Loans and guaranteed as to timely payment of principal and interest by the Government National Mortgage Association (“GNMA”), Fannie Mae or the Federal Home Loan Mortgage Corporation (“Freddie Mac”) on the related Release Date. In addition, on the related Conversion Date (which occurs two months after the Release Date), the interest rate on such 2009A Program Bonds is converted from the Short-Term Rate to the applicable Permanent Rate. The 2009A Program Bonds and all Market Bonds issued from time to time under the Indenture in conjunction with the 2009A Program Bonds are collectively referred herein as the “Bonds.”

The 2009A Program Bonds were issued, and the 2009A-1 Market Bonds will be issued, pursuant to K.S.A. 12-5219 et seq., as amended (the “Act”), and one or more resolutions adopted by the Issuer, and the terms of a Trust Indenture dated as of December 1, 2009, including Appendix A and any other appendices thereto (the “Trust Indenture”), and a Release Date Annex (the “2009A-1 Release Date Annex”, together with the Trust Indenture, the “Indenture”), between the Issuer and UMB Bank, N.A., as trustee (the “Trustee”). A 2009A-1 Release Date Annex will be executed and delivered in connection with the release of bond proceeds relating to the 2009A-1 Program Bonds and the issuance of the 2009A-1 Market Bonds.

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The 2009A-1 Market Bonds represent the Issuer’s first issuance of Market Bonds under the Indenture, and the 2009A-1 Program Bonds represent the first release of bond proceeds relating to the 2009A Program Bonds under the Indenture.

Certain capitalized terms used in this Official Statement and not otherwise defined are defined in “Appendix A—Definitions.” Capitalized terms used herein and not otherwise defined herein have the meanings assigned to them in the Indenture and the Agreement (as defined below). Certain provisions of the Indenture are summarized below in “Flow of Funds” and “The Indenture.”

The 2009A-1 Bonds are subject to redemption prior to maturity as described herein. Purchasers of 2009A-1 Bonds should understand that such 2009A-1 Bonds are subject to redemption at 100% of the principal amount thereof, plus accrued interest, under the circumstances described herein. See “The 2009A-1 Bonds—Redemption” and “Structuring Assumptions and Risks.”

The 2009A-1 Mortgage Loans will be originated pursuant to an Origination and Servicing Agreement dated as of July 1, 2010 (the “Agreement”), among the Issuer, U.S. Bank National Association (the “Servicer”) and the lenders named therein (the “Lenders”). The 2009A-1 Mortgage Loans will be required, among other things, to meet the Program requirements and to be (a) insured by the Federal Housing Administration (“FHA”), pursuant to the National Housing Act, as amended, (b) guaranteed by the Department of Veterans Affairs (“VA”), pursuant to the Servicemen’s Readjustment Act of 1944, as amended, (c) guaranteed by the Rural Housing Service of the United States Department of Agriculture (“USDA-RHS”), pursuant to the Cranston-Gonzalez National Affordable Housing Act of 1990, as amended, or (d) insured by a private mortgage insurance company approved by Fannie Mae or Freddie Mac, as applicable.

Under the Agreement, the Lenders will originate 2009A-1 Mortgage Loans and sell them to the Servicer. The Servicer will purchase the 2009A-1 Mortgage Loans from the Lenders, pool the 2009A-1 Mortgage Loans, and either (i) issue GNMA Certificates backed by FHA-insured, VA-guaranteed and USDA-RHS-guaranteed Mortgage Loans or (ii) exchange Conventional Mortgage Loans for Fannie Mae Certificates or Freddie Mac Certificates backed by Mortgage Loans (provided that under the Agreement the Servicer is required to use its best efforts to exchange Conventional Mortgage Loans exclusively for Freddie Mac Certificates). The Servicer will service all the 2009A-1 Mortgage Loans. The Servicer is a GNMA-approved servicer of FHA-insured, VA-guaranteed and USDA-RHS-guaranteed mortgage loans, and an authorized issuer of GNMA Certificates, Fannie Mae Certificates and Freddie Mac Certificates. The Servicer is also a Fannie Mae-approved and Freddie Mac-approved seller and servicer of Conventional Mortgage Loans. The Servicer and the Lenders are required to review the 2009A-1 Mortgage Loan documents with respect to compliance of the 2009A-1 Mortgage Loans and the related Mortgagors with certain requirements of the Program, as more fully set forth in the Agreement.

Unless otherwise permitted by the Issuers in writing, no 2009A-1 Mortgage Loans will be Conventional Mortgage Loans.

The Issuer, the Trustee (acting as custodian) and Greystone Kansas, LP (the “Repurchaser”) have entered into a Repurchase Agreement dated as of June 1, 2010, pursuant to which the Repurchaser has agreed to purchase 2009A-1 Certificates from the Servicer (through the Trustee acting as custodian) and then sell them the 2009A-1 Certificates to the Trustee on the 2009A-1 Release Date.

Brief descriptions of the Issuer, the 2009A-1 Bonds, the mortgage-backed securities programs of GNMA, Fannie Mae and Freddie Mac, the Issuer’s Program, together with summaries of certain provisions of the Indenture and the Agreement, follow in this Official Statement. All summaries herein of documents and agreements are qualified in their entirety by reference to such documents and agreements,

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and all summaries herein of the 2009A-1 Bonds are qualified in their entirety by reference to the form thereof included in the Indenture and the provisions with respect thereto included in the aforesaid documents and agreements.

THE ISSUERS

Sedgwick County, Kansas, and Shawnee County, Kansas, are political subdivisions of the State of Kansas, organized and existing under and pursuant to the Constitution and laws of the State of Kansas. Each Issuer is authorized, pursuant to the Act, and in furtherance of the public purposes described in the Act, to aid in providing an adequate supply of residential housing for low and moderate income persons and families by issuing their revenue bonds and using the proceeds therefrom to purchase home mortgage loans, by pledging such home mortgage loans as security for the payment of the principal of and interest on any such revenue bonds, and by entering into any agreements in connection therewith.

Pursuant to the Agreement, the Lenders will agree to originate 2009A-1 Mortgage Loans and the Servicer will agree to pool such 2009A-1 Mortgage Loans, cause Certificates to be issued with respect to such 2009A-1 Mortgage Loans, and sell such Certificate to the Trustee. With respect to each Release Date, the Trustee will purchase Certificate on behalf of the Issuers from moneys on deposit in the related Program Account of the Program Fund. The Servicer will service all 2009A-1 Mortgage Loans. The purchase price of Certificates purchased with money in the related Account will be derived solely from amounts available in such Account.

THE 2009A-1 BONDS

General

The 2009A-1 Bonds will be issued in fully registered, book-entry only form in Authorized Denominations.

The 2009A-1 Market Bonds will be issued in the maximum principal amounts, mature on the dates and bear interest at the rates set forth on the inside cover of this Official Statement. The 2009A-1 Program Bonds will be in the maximum principal amount, and mature on the date and bear interest at the rates, set forth on the inside cover of this Official Statement.

The final principal amounts of the 2009A-1 Market Bonds and the 2009A-1 Program Bonds will be determined prior to the 2009A-1 Release Date, on or about November 4, 2010, or such other date selected by the Issuers (the “2009A-1 Final Bond Amount Determination Date”). This date is expected to be the same date as the Permanent Interest Rate Calculation Date for the 2009A-1 Program Bonds. The final 2009A-1 Bond amounts will depend on the principal amount of 2009A-1 Mortgage Loans originated under the Issuer’s Program, the principal amount of 2009A-1 Certificates issued or to be issued and to be delivered to the Trustee, and certain other factors. See “The Issuer’s Program” for a discussion of the factors to be taken into account by the Issuers in determining the final total principal amount of the 2009A-1 Bonds. To the extent the final principal amount of 2009A-1 Bonds on the 2009A-1 Release Date is less than the maximum principal amounts, the principal amount of the 2009A-1 Market Bonds and the 2009A-1 Program Bonds will be reduced on a ratable basis, subject to rounding that is consistent with the required Authorized Denominations and the requirements of the Indenture. In general the percentage of the 2009A-1 Program Bonds and the 2009A-1 Market Bonds will be 60% and 40% of the total 2009A-1 Bonds, respectively. For example, if the total final principal amount of the 2009A-1 Bonds is determined to be $25,000,000, then $15,000,000 will be 2009A-1 Program Bonds and $10,000,000 will be 2009A-1 Market Bonds.

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In addition, with respect to the 2009A-1 Market Bonds, the final total principal amount of each maturity of such Bonds will be determined on a ratable basis based on the maximum principal amounts of such Bonds as shown on the inside cover page of this Official Statement.

Interest on the 2009A-1 Market Bonds will be payable on each June 1 and December 1, commencing June 1, 2011. Interest on the 2009A-1 Program Bonds will be payable on (i) January 18, 2011 (the date which is two months after the 2009A-1 Release Date, which is the Conversion Date for the 2009A-1 Program Bonds from the Short-Term Rate to the Permanent Rate), and (ii) June 1 and December 1, commencing June 1, 2011. Interest will be calculated on the basis of a 360-day year of twelve 30-day months. The 2009A-1 Bonds will bear interest from the 2009A-1 Release Date or from the most recent Interest Payment Date to which interest has been paid. Interest will be calculated on the basis of a 360-day year of twelve 30-day months

As a condition to the occurrence of the 2009A-1 Release Date, the Issuers must issue the 2009A-1 Market Bonds and satisfy all other conditions to the release of the proceeds relating to the 2009A-1 Program Bonds and if any such condition is not met then the 2009A-1 Market Bonds will not be issued and the 2009A-1 Program Bonds will not be released.

The 2009A-1 Bonds and all other Bonds issued under the Indenture are secured on a parity basis; provided that amounts in the Escrow Fund shall be pledged exclusively to the Pre-Conversion Program Bonds which are payable from moneys in the Escrow Fund).

Book-Entry Only System

The 2009A-1 Bonds will be issued in book-entry only form through The Depository Trust Company (“DTC”). Payments with respect to the 2009A-1 Bonds will be made by the Trustee to DTC only. A description of certain provisions relating to the DTC book-entry system is set forth in Appendix B.

Payment, Transfer and Exchange

The following provisions apply only if the 2009A-1 Bonds are converted from book-entry to certificated form.

Principal of the 2009A-1 Bonds and interest on the 2009A-1 Bonds are payable by check of the Trustee mailed on the Interest Payment Date thereof to the person in whose name the 2009A-1 Bonds (or any predecessor Bonds) are registered on the registration books of the Trustee on the Record Date with respect to each Interest Payment Date; provided, however, that payment of such interest will be made by wire transfer to any Owner of any Bonds in an aggregate principal amount of at least $1,000,000 at the risk and expense of the Owner, if such Owner has requested in writing payment by such method and has provided the Trustee with an account number and other necessary information for such purposes at least five Business Days before the applicable Record Date; and provided further that the final payment of principal will be made upon presentation of the 2009A-1 Bond at the designated corporate trust office of the Trustee.

The transfer of any Bond is registerable on the 2009A-1 Bond register maintained by the Trustee upon the surrender of such Bond for cancellation and registration of transfer at the designated corporate trust office of the Trustee, accompanied by a written instrument of transfer in form satisfactory to the Trustee duly executed by the Owner or by his attorney duly authorized in writing, provided, however, that the Trustee is not required to register the transfer of or exchange any Bond during the period between the Record Date and the next Interest Payment Date or during the three days next preceding any date

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established by the Trustee for the selection of Bonds for redemption nor to register the transfer of or exchange any Bonds called for redemption after the call for redemption and prior to the redemption date.

Redemption

Redemption from Unspent Proceeds in 2009A-1 Account of Program Fund. The 2009A-1 Bonds will be subject to redemption in whole or in part on January 1, 2011, or any extended date permitted under the Indenture (the “2009A-1 Nonorigination Redemption Date”), from moneys in the 2009A-1 Account of the Program Fund which have not been applied to the purchase of 2009A-1 Certificates, at a redemption price equal to 100% of the principal amount thereof (107.125% in the case of the Premium PAC Bonds), plus accrued interest to the redemption date. If the 2009A-1 Bonds are redeemed in part, the 2009A-1 Bonds shall be selected on a pro rata basis from all outstanding maturities. The January 1, 2011 redemption date may be extended one or more times if the conditions of the Indenture are met.

Mandatory Sinking Fund Redemption. On and after each Release Date, the 2009A-1 Bonds will be subject to mandatory sinking fund redemption on the dates and in the amounts set forth below. The mandatory sinking fund redemptions will be at a redemption price equal to 100% of the principal amount thereof, together with accrued interest to the redemption date.

2009A-1 Market Bonds Due December 1, 2020 (Term Bonds)

Redemption Date Sinking Fund Installment Redemption Date Sinking Fund Installment

December 1, 2014 June 1, 2015 December 1, 2015 June 1, 2016 December 1, 2016 June 1, 2017

$265,000 270,000 160,000 165,000 170,000

40,000

December 1, 2017 June 1, 2018 December 1, 2018 June 1, 2020 December 1, 2020†

$180,000 180,000 180,000 200,000 205,000

2009A-1 Market Bonds Due June 1, 2028 (Term Bonds)


June 1, 2022 December 1, 2022 June 1, 2023 December 1, 2023 June 1, 2024 December 1, 2024 June 1, 2025

$220,000 225,000 230,000 235,000 240,000 245,000 250,000

December 1, 2025 June 1, 2026 December 1, 2026 June 1, 2027 December 1, 2027 June 1, 2028†

$265,000 270,000 275,000 285,000 290,000 295,000

† Maturity Date

6

2009A-1 Market Bonds Due December 1, 2028 (Premium PAC Bonds)


December 1, 2015 June 1, 2016 December 1, 2016 June 1, 2017 December 1, 2017 June 1, 2018 December 1, 2018 June 1, 2019 December 1, 2019 June 1, 2020 December 1, 2020 June 1, 2021 December 1, 2021 June 1, 2022

$115,000 115,000 115,000 120,000 120,000 125,000 130,000 130,000 135,000 135,000 140,000 145,000 150,000 150,000

December 1, 2022 June 1, 2023 December 1, 2023 June 1, 2024 December 1, 2024 June 1, 2025 December 1, 2025 June 1, 2026 December 1, 2026 June 1, 2027 December 1 2027 June 1, 2028 December 1, 2028†

$155,000 160,000 165,000 170,000 175,000 180,000 180,000 185,000 190,000 195,000 200,000 210,000

10,000

2009A-1 Program Bonds Due December 1, 2041


December 1, 2028 June 1, 2029 December 1, 2029 June 1, 2030 December 1, 2030 June 1, 2031 December 1, 2031 June 1, 2032 December 1, 2032 June 1, 2033 December 1, 2033 June 1, 2034 December 1, 2034 June 1, 2035

$510,000 540,000 550,000 560,000 570,000 580,000 600,000 610,000 620,000 640,000 650,000 670,000 680,000 700,000

December 1, 2035 June 1, 2036 December 1, 2036 June 1, 2037 December 1, 2037 June 1, 2038 December 1, 2038 June 1, 2039 December 1, 2039 June 1, 2040 December 1, 2040 June 1, 2041 December 1, 2041†

$710,000 730,000 740,000 760,000 780,000 790,000 810,000 830,000 850,000 870,000 750,000 600,000 300,000

Mandatory Redemption from Prepayments and Surplus Revenues. The 2009A-1 Bonds are subject to mandatory redemption in whole or in part at a redemption price equal to 100% of the principal amount thereof, together with accrued interest to the redemption date from amounts on deposit in the 2009A-1 Account of the Redemption Fund, representing (i) Prepayments and scheduled principal payments from the 2009A-1 Certificates not required to pay 2009A-1 Bond maturity or sinking fund amounts (collectively, “Recoveries of 2009A-1 Certificate Principal”) and (ii) surplus revenues relating to the 2009A-1 Bonds not required to pay 2009A-1 Bond interest due on the next Interest Payment Date (“2009A-1 Surplus Revenues”). Any moneys so deposited shall be applied to the redemption of the 2009A-1 Bonds on the first day of each month commencing January 1, 2011.

† Maturity Date

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Amounts deposited in the 2009A-1 Account of the Redemption Fund shall be applied to redeem 2009A-1 Bonds in the following order of priority:

FIRST, 60% of such amounts shall be applied to redeem 2009A-1 Program Bonds;

SECOND, after applying the amounts as described in clause FIRST above, remaining amounts shall be applied to redeem Premium PAC Bonds down to the applicable 75% PSA Outstanding Bond Amount for Premium PAC Bonds;

THIRD, after applying the amounts as described in clause FIRST and SECOND above, any remaining amounts shall be applied to redeem all 2009A-1 Market Bonds, except Premium PAC Bonds, on a pro rata basis, until the Outstanding principal amount of all 2009A-1 Market Bonds has been reduced to the applicable 400% PSA Outstanding Bond Amount for Non-Premium PAC 2009A-1 Market Bonds; and

FOURTH, after applying the amounts as described in clauses FIRST, SECOND and THIRD above, any remaining amounts shall be applied to redeem all 2009A-1 Market Bonds, including Premium PAC Bonds, on a pro rata basis, until the 2009A-1 Market Bonds are no longer Outstanding, and then such amounts shall be applied to redeem 2009A-1 Program Bonds.

The applicable “75% PSA Outstanding Bond Amount for Premium PAC Bonds” is the amount set forth in the second column of Appendix D for each redemption date on which the redemption of Premium PAC Bonds could occur. The amounts in the column for each redemption date have been calculated based on the principal amount of Premium PAC Bonds projected to remain Outstanding, after taking into account scheduled principal payments and projected redemptions of Premium PAC Bonds from Recoveries of 2009A-1 Certificate Principal and 2009A-1 Surplus Revenues. The projected Outstanding Bond Amounts are based on various assumptions, including (i) the assumptions stated under “Structuring Assumptions and Risks,” (ii) an expected purchase schedule for the 2009A-1 Certificates, and (iii) Prepayments of the 2009A-1 Certificates resulting from a constant 75% PSA prepayment rate.

The applicable “400% PSA Outstanding Bond Amount for Non-Premium PAC 2009A-1 Market Bonds” is the amount set forth in the third column of Appendix D for the redemption date on which the redemption of 2009A-1 Market Bonds could occur. The amounts in the column for each redemption date have been calculated based on the principal amount of all 2009A-1 Market Bonds (excluding Premium PAC Bonds) projected to be Outstanding, after taking into account scheduled principal payments and projected redemptions of 2009A-1 Market Bonds (other than Premium PAC Bonds) from Recoveries of 2009A-1 Certificate Principal and 2009A-1 Surplus Revenues. The projected Outstanding Bond Amounts are based on various assumptions, including (i) the assumptions stated under “Structuring Assumptions and Risks,” (ii) an expected purchase schedule for the 2009A-1 Certificates and (iii) Prepayments of the 2009A-1 Certificates resulting from a constant 400% PSA prepayment rate.

The Outstanding Bond Amounts in Appendix D are subject to reduction if 2009A-1 Bonds are redeemed (as described above) due to failure to purchase Certificates from moneys in the related Account of the Program Fund. Any such reductions are required to take into account the particular maturities of 2009A-1 Market Bonds actually redeemed.

Optional Redemption. The 2009A-1 Program Bonds are subject to redemption at the option of the Issuers in whole or in part on the first Business Day of any month with moneys from any source (provided that such moneys are not, established by an opinion of nationally recognized bankruptcy counsel selected by the Issuers and acceptable to the Trustee, recoverable as preferences under the United

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States Bankruptcy Code), at a redemption price equal to 100% of the principal amount thereof, together with accrued interest to the redemption date.

The 2009A-1 Market Bonds are subject to redemption at the option of the Issuers in whole or in part on any date, commencing June 1, 2020, with moneys from any source (provided that such moneys are not, established by an opinion of nationally recognized bankruptcy counsel selected by the Issuers and acceptable to the Trustee, recoverable as preferences under the United States Bankruptcy Code), at a redemption price equal to 100% of the principal amount thereof, together with accrued interest to the redemption date.

Under the Indenture, the Issuers are permitted to direct the Trustee to sell 2009A-1 Certificates purchased with moneys from the 2009A-1 Account of the Program Fund and redeem 2009A-1 Bonds, in whole or in part, but such redemption must be undertaken as an optional redemption in accordance with the preceding paragraphs and, if such redemption is in part, the rating on all remaining outstanding 2009A-1 Bonds must be confirmed by the Rating Agency. Any such redemption in part will be undertaken on a pro rata basis among the maturities of the 2009A-1 Market Bonds unless otherwise permitted under the Indenture.

It is expected that a substantial portion of the 2009A-1 Bonds will be redeemed without premium prior to their respective sinking fund (if applicable) and maturity dates based on the foregoing redemption provisions.

General Redemption Provisions. If 2009A-1 Bonds of a particular maturity are redeemed in part, the 2009A-1 Bonds to be redeemed within such maturity will be selected on a random basis in accordance with the provisions of the Indenture. 2009A-1 Bonds redeemed in part may only be redeemed in Authorized Denominations. If a 2009A-1 Bond that is a term bond is subject to redemption other than from mandatory sinking fund payments, the remaining sinking fund amounts will be reduced on a pro rata basis.

Notice of Redemption

Except as otherwise provided in the Indenture, notice of redemption of 2009A-1 Bonds is required to be sent not less than 5 days and not more than 60 days prior to the redemption date; provided that notice of any optional redemption of the 2009A-1 Bonds is required to be sent not less than 10 days and not more than 60 days prior to the redemption date.

Failure to provide any required notice of redemption will not affect the validity of any proceeding for the redemption of any Bond.

[Remainder of Page Intentionally Left Blank]

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SOURCES AND USES OF FUNDS

Assuming the delivery of the maximum amount of 2009A-1 Bonds, the anticipated application of proceeds of the 2009A-1 Bonds and other moneys available to the Issuers is as follows:

Sources 2009A-1 Market Bond Principal Proceeds relating to 2009A-1 Program Bond Principal

$12,000,000

18,000,000 2009A-1 Market Bond Premium 285,000 Total $30,285,000

Uses 2009A-1 Account of Program Fund 1 $30,275,000 2009A-1 Account of Revenue Fund 10,000 Total $30,285,000

_______________________ 1 Amounts in the 2009A-1 Account will be used to purchase Certificates and for certain other purposes. Upon the purchase of Certificates and the occurrence of the 2009A-1 Release Date, a total of $500,000 will be transferred from the 2009A-1 Account of the Program Fund to the 2009A-1 Account of the Cost of Issuance Fund. Of this amount, $151,414 will be paid to the State of Kansas for volume cap allocation fees relating to the 2009A-1 Bonds, and the balance of $348,586 will be applied to pay costs of issuance relating to the 2009A-1 Market Bonds and the costs of releasing the proceeds of the 2009A-1 Program Bonds, including, but not limited to, the fees and expenses of the Financial Advisor, Co-Bond Counsel, the Underwriter, counsel to the Underwriter, GSE special counsel, the rating agency fee, the Trustee’s initial fees and expenses, and any other applicable costs. Also upon the purchase of Certificates, $90,000 will be transferred from the 2009A-1 Account of the Program Fund to the 2009A-1 Account of the Revenue Fund to pay interest on the 2009A-1 Bonds.

SECURITY FOR THE 2009A-1 BONDS

General

The 2009A-1 Bonds are special, limited obligations of the Issuers, payable solely out of the revenues, receipts, and security pledged therefor under the Indenture. The 2009A-1 Bonds do not constitute a general obligation or indebtedness of either Issuer within the meaning of any constitutional or statutory provision or limitation. The 2009A-1 Bonds do not constitute a debt or obligation of the State of Kansas, or any political subdivision, agency or instrumentality thereof, and shall not constitute a lien on or pledge of any property of either Issuer except as provided in the Indenture. The 2009A-1 Bonds are not obligations of, or guaranteed by, GNMA, Fannie Mae or Freddie Mac.

Under the Indenture, the 2009A-1 Bonds and any other Program Bonds subject to a Release Date and any additional Market Bonds issued under the Indenture, will be secured on a parity basis by an assignment and pledge of and security interest in (i) all right, title and interest of the Issuer in the moneys, Investment Securities and Certificates held under the Indenture (except from amounts held in the Cost of Issuance Fund and any Rebate Amount), and (ii) any other amounts held under the Indenture for the payment and security of the 2009A-1 Bonds; provided that the Escrowed Proceeds held in the Escrow Fund shall be pledged exclusively to the repayment of 2009A Program Bonds not subject to a Release Date.

With respect to the GNMA Certificates, the Servicer is obligated to pay the principal of and interest on the GNMA Certificates in an amount equal to (i) the scheduled principal and interest due on the underlying 2009A-1 Mortgage Loans (less the related servicing and guaranty fees), whether or not the

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Servicer has received such principal and interest payments on the underlying 2009A-1 Mortgage Loans, and (ii) prepayments on the underlying 2009A-1 Mortgage Loans received by the Servicer. GNMA guarantees the timely payment of principal of and interest on the GNMA Certificates. See “GNMA Mortgage-Backed Certificate Program.”

With respect to the Fannie Mae Certificates, Fannie Mae will directly pay, and guarantee the timely payment of, the principal of and interest on the Fannie Mae Certificates. See “Fannie Mae Mortgage-Backed Certificate Program.”

With respect to the Freddie Mac Certificates, Freddie Mac will directly pay, and guarantee the timely payment of, the principal of and interest on the Freddie Mac Certificates. See “Freddie Mac Mortgage-Backed Certificate Program.”

Moneys in the Program Fund (pending purchase of Certificates), the Revenue Fund, the Capitalized Interest Fund, the Interest Fund, the Principal Fund, the Redemption Fund and the Program Expense Fund will be invested in permitted Investment Securities and all amounts therein will be pledged as security for the 2009A-1 Bonds.

GNMA MORTGAGE-BACKED CERTIFICATE PROGRAM

The summary of the GNMA Mortgage-Backed Certificate Program, GNMA Certificates and other documents referred to herein does not purport to be comprehensive and is qualified in its entirety by reference to the GNMA Guide and to the GNMA Certificates and other documents for full and complete statements of their provisions.

GNMA is a wholly owned corporate instrumentality of the United States within the Department of Housing and Urban Development (“HUD”), with its principal office in Washington, D.C. GNMA is authorized by Section 306(g) of Title III of the National Housing Act, as amended (the “Housing Act”), to guarantee the timely payment of the principal of, and interest on, certificates which represent an undivided interest in a pool of mortgage loans insured by FHA under the Housing Act or Title V of the Housing Act of 1949, or guaranteed by VA under the Servicemen’s Readjustment Act of 1944, as amended, of Chapter 37 of Title 38, United States Code. Section 306(g) further provides that “the full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under any guaranty under this subsection.” An opinion, dated October 12, 1969, of an Assistant Attorney General of the United States, states that such guaranties under Section 306(g) of mortgage-backed certificates of the type to be delivered to the Trustee on behalf of the Issuer are authorized to be made by GNMA and “would constitute general obligations of the United States backed by its full faith and credit.” In order to meet its obligations under such guaranties, GNMA, in its corporate capacity under Section 306(d) of Title III of the Housing Act, may issue its general obligations to the United States Treasury Department in an amount outstanding at any one time sufficient to enable GNMA, with no limitations as to amount, to perform its obligations under its guaranties of the timely payment of the principal of or interest on all GNMA Certificates. The Treasury is authorized to purchase any obligations so issued by GNMA and has indicated in a letter dated February 13, 1970, from the Secretary of the Treasury to the Secretary of HUD that the Treasury will make loans to GNMA, if needed, to implement GNMA’s guaranties. Under the terms of its guaranties, GNMA warrants that, in the event it is called upon at any time to make payment on its guaranties, it will, if necessary, in accordance with Section 306(d) of Title III of the Housing Act, apply to the Treasury Department of the United States for a loan or loans in amounts sufficient to make payments of principal and interest.

To issue GNMA Certificates, the Servicer is required first to apply to and receive from GNMA a Commitment to Guarantee Mortgage-Backed Securities (“GNMA Commitment”). A GNMA

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Commitment authorizes the Servicer to issue GNMA Certificates up to a stated amount during a one-year period following the date thereof. The Servicer is obligated to pay the GNMA commitment fees. The Servicer is also obligated to pay the monthly GNMA guaranty fees.

Each GNMA Certificate is to be backed by a mortgage pool consisting of 2009A-1 Mortgage Loans in a minimum aggregate amount approved by GNMA. Each GNMA I Certificate will be a “mortgage loan pass-through” certificate which will require the Servicer to pass through to the paying and transfer agent therefor (the “GNMA Paying Agent”) by the fifteenth day of each month (or the sixteenth day, if such day is not a business day, provided that, if neither the fifteenth nor the sixteenth day is a business day, then the first business day prior to the fifteenth day of the month), the regular monthly payments on the 2009A-1 Mortgage Loans (less the GNMA guaranty fee and the Servicer’s servicing fee), whether or not the Servicer receives such payments, plus any prepayments of principal of the 2009A-1 Mortgage Loans received by the Servicer in the previous month. Each GNMA II Certificate will require the Servicer to pass through to the GNMA Paying Agent, by the nineteenth day of each month (or the twentieth day, if such day is not a business day; provided that, if neither the nineteenth nor the twentieth day is a business day, then the first business day prior to the nineteenth day of the month), the regular monthly payments on the 2009A-1 Mortgage Loans (less the GNMA guaranty fee and the Servicer’s servicing fee), whether or not the Servicer receives such payments, plus any prepayments of principal of the 2009A-1 Mortgage Loans received by the Servicer in the previous month. The GNMA Paying Agent is then required to pass through to the Trustee on or before the third business day following the nineteenth day of each month the scheduled payments received from the Servicer. GNMA guarantees timely payment of principal of and interest with respect to the GNMA Certificate.

GNMA, upon execution of the GNMA guaranty agreement, issuance of a GNMA Certificate by the Servicer, and subsequent sale of such GNMA Certificate to the Trustee, will have guaranteed to the Trustee as holder of such GNMA Certificate the timely payment of principal of and interest on such GNMA Certificate.

FANNIE MAE MORTGAGE-BACKED CERTIFICATE PROGRAM

General

Note: With respect to the 2009A-1 Bonds, all Certificates pledged under the Indenture will be GNMA Certificates unless the written consent of the Issues is received to permit Fannie Mae Certificates or Freddie Mac Certificates.

Fannie Mae has provided the information under this caption “General” (except certain information under the sixth paragraph. Fannie Mae is a federally chartered corporation organized and existing under the Federal National Mortgage Association Charter Act, 12 U.S.C. 1716 et seq. Fannie Mae was originally established in 1938 as a United States government agency to provide supplemental liquidity to the mortgage market and became a stockholder-owned and privately managed corporation by legislation enacted in 1968.

Fannie Mae purchases, sells, and otherwise deals in mortgages in the secondary market rather than as a primary lender. It does not make direct mortgage loans but acquires mortgage loans originated by others. In addition, Fannie Mae issues mortgage-backed securities (“MBS”), primarily in exchange for pools of mortgage loans from lenders. Fannie Mae receives guaranty fees for its guarantee of timely payment of principal of and interest on MBS certificates.

On September 6, 2008, Fannie Mae’s safety and soundness regulator, the Federal Housing Finance Agency, or FHFA, placed Fannie Mae into conservatorship. As the conservator, FHFA

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succeeded to all rights, titles, powers and privileges of Fannie Mae, and of any stockholder, officer, or director of Fannie Mae with respect to Fannie Mae and the assets of Fannie Mae.

On September 7, 2008 Fannie Mae, through its conservator, entered into two agreements with the U.S. Department of the Treasury (“Treasury”) – a Senior Preferred Stock Purchase Agreement (“Stock Purchase Agreement”) and a Common Stock Warrant (“Warrant”). Pursuant to the Stock Purchase Agreement, Fannie Mae issued to Treasury 1,000,000 shares of Senior Preferred Stock with an initial liquidation preference of $1,000 per share and the Warrant, which allows Treasury to purchase, for a nominal price, shares of common stock equal to 79.9% of the outstanding common stock of Fannie Mae. The Senior Preferred Stock and the Warrant were issued to Treasury as an initial commitment fee for Treasury’s commitment (the “Commitment”), set forth in the Stock Purchase Agreement, to provide up to $100 billion in funds to Fannie Mae. The Stock Purchase Agreement amended on May 6, 2009 to increase the size of the Commitment to $200 billion, and was further amended in December 2009 to remove the size limitation of the Commitment through the end of 2012. Fannie Mae generally may draw funds under the Commitment on a quarterly basis when Fannie Mae’s total liabilities exceed its total assets on its consolidated balance sheet calculated in accordance with Generally Accepted Accounting Principles as of the end of a quarter.

At September 30, 2009, Fannie Mae’s total liabilities exceeded its total assets on its consolidated balance sheet by $15.0 billion. The Director of FHFA has submitted a request on Fannie Mae’s behalf to draw funds under the Commitment to eliminate Fannie Mae’s net worth deficit as of September 30, 2009. Any amounts drawn on the Commitment will be added to the liquidation preference of the Senior Preferred Stock, which currently has a 10% dividend rate. Upon the receipt of the requested funds from Treasury, Fannie Mae will have drawn $59.9 billion in funds under the Commitment. Subsequent draws, including a recent draw request for 8.4 billion, will increase the total draws to almost $85 billion.

On September 19, 2008, Fannie Mae entered into a lending agreement with Treasury (the “Credit Facility”) under which Fannie Mae may request loans from Treasury until December 31, 2009. Any loans made by Treasury under the Credit Facility must be collateralized. To date, Fannie Mae has not borrowed any funds under the Credit Facility.

The Stock Purchase Agreement, the Warrant and the Credit Facility contain covenants that significantly restrict Fannie Mae’s business activities. These covenants include a prohibition on the issuance of equity securities (except in limited instances), a prohibition on the payment of dividends or other distributions on Fannie Mae’s equity securities (other than the Senior Preferred Stock or the Warrant), a prohibition on Fannie Mae’s issuance of subordinated debt securities, and a limitation on the amount of debt securities Fannie Mae may have outstanding.

The securities of Fannie Mae are not guaranteed by the United States and do not constitute a debt or obligation of the United States or any agency or instrumentality thereof other than Fannie Mae.

Information on Fannie Mae and its financial condition is contained in periodic reports that are filed with the Securities and Exchange Commission (the “SEC”). The SEC filings are available at the SEC’s website at www.sec.gov. The periodic reports filed by Fannie Mae with the SEC are also available on Fannie Mae’s web site at http://www.fanniemae.com/ir/sec or from Fannie Mae at the Office of Investor Relations at 202-752-7115.

Fannie Mae is incorporating by reference in this Official Statement the documents listed below that Fannie Mae publishes from time to time. This means that Fannie Mae is disclosing information to you by referring you to those documents. Those documents are considered part of this Official Statement,

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so you should read this Official Statement, and any applicable supplements or amendments, together with those documents before making an investment decision.

You should rely only on the information provided or incorporated by reference in this Official Statement and any applicable supplement, and you should rely only on the most current information.

Fannie Mae incorporates by reference the following documents Fannie Mae has filed, or may file with the SEC:

- Fannie Mae’s Form 10-K for the fiscal year ended December 31, 2008, filed with the SEC on February 26, 2009;

- Fannie Mae’s Form 10-Qs for the quarterly periods ended March 31, 2009, June 30, 2009, and September 30, 2009, filed with the SEC on May 8, 2009, August 6, 2009, and November 5, 2009, respectively; and

- all other proxy statements that Fannie Mae files with the SEC, and all documents Fannie Mae files with the SEC pursuant to Section 13(a), 13(c) or 14 of the Exchange Act after the date of this Official Statement and prior to the termination of the offering of securities under the Official Statement, excluding any information “furnished” to the SEC on Form 8-K.

Fannie Mae makes no representation as to the contents of this Official Statement, the suitability of the 2009A-1 Bonds for any investor, the feasibility of performance of any project, or compliance with any securities, tax or other laws or regulations. Fannie Mae’s role with respect to the 2009A-1 Bonds is limited to issuing and discharging its obligations under the Credit Facility and exercising the rights reserved to it in the Indenture and the Reimbursement Agreement.

Fannie Mae Certificates

Each Fannie Mae Certificate will represent the entire interest in a specified pool of 2009A-1 Mortgage Loans purchased by Fannie Mae and identified in records maintained by Fannie Mae. Each Fannie Mae Certificate will bear interest at the pass-through rate specified thereon.

Fannie Mae will guarantee to the registered holder of the Fannie Mae Certificates that it will distribute amounts representing scheduled principal and interest at the applicable pass-through rate on the 2009A-1 Mortgage Loans in the pools represented by such Fannie Mae Certificates, whether or not received, and the full principal balance of any foreclosed or other finally liquidated Mortgage Loan whether or not such principal balance is actually received. The obligation of Fannie Mae under such guaranty is an obligation solely of Fannie Mae and is not backed by, nor entitled to the faith and credit of the United States. If Fannie Mae were unable to satisfy such obligation, distributions to the Trustee, as the registered holder of the Fannie Mae Certificates, would consist solely of payments and other recoveries on the underlying 2009A-1 Mortgage Loans and, accordingly, monthly distributions to the Trustee, as the holder of the Fannie Mae Certificates and payments on the 2009A-1 Bonds could be affected by delinquent payments and defaults on such 2009A-1 Mortgage Loans.

Payments on the 2009A-1 Mortgage Loans; Distributions on the Fannie Mae Certificates

Payments on a Fannie Mae Certificate will be made on the twenty-fifth day of each month (beginning with the month following the month such Fannie Mae Certificate is issued), or, if such twenty-fifth day is not a business day, on the first business day next succeeding such twenty-fifth day. With respect to each Fannie Mae Certificate, Fannie Mae will distribute to the Trustee an amount equal to

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the total of (i) the principal due on the mortgage loans in the related pool underlying such Fannie Mae Certificate during the period beginning on the second day of the month prior to the month of such distribution and ending on the first day of such month of distribution, (ii) the stated principal balance of any mortgage loan that was prepaid in full during the second month next preceding the month of such distribution (including as prepaid for this purpose at Fannie Mae’s election any mortgage loan repurchased by Fannie Mae because of Fannie Mae’s election to repurchase the mortgage loan after it is delinquent, in whole or in part, with respect to four consecutive installments of principal and interest; or because of Fannie Mae’s election to repurchase such mortgage loan under certain other circumstances as permitted by the Trust Indenture), (iii) the amount of any partial prepayment of a mortgage loan received in the second month next preceding the month of distribution, and (iv) one month’s interest at the pass-through rate on the principal balance of the Fannie Mae Certificate as reported to the Trustee in connection with the previous distribution (or, respecting the first distribution, the principal balance of the Fannie Mae Certificate on its issue date).

For purposes of distribution, a mortgage loan will be considered to have been prepaid in full if, in Fannie Mae’s reasonable judgment, the full amount finally recoverable on account of such mortgage loan has been received, whether or not such full amount is equal to the stated principal balance of the mortgage loan. Fannie Mae may, in its discretion, include with any distribution principal prepayments, both full and partial, received during the month prior to the month of distribution but is under no obligation to do so.

FREDDIE MAC MORTGAGE-BACKED SECURITIES PROGRAM

General

Note: With respect to the 2009A-1 Bonds, all Certificates pledged under the Indenture will be GNMA Certificates unless the written consent of the Issuers is received to permit Fannie Mae Certificates or Freddie Mac Certificates.

The information presented under this caption “General” has been supplied by Freddie Mac. None of the Issuer, the Trustee, the Owner or the Financial Advisor has independently verified such information, and none assumes responsibility for the accuracy of such information. The information is qualified in its entirety by reference to the Incorporated Documents, as defined below.

Freddie Mac is a shareholder-owned government-sponsored enterprise created on July 24, 1970 pursuant to the Federal Home Loan Mortgage Corporation Act, Title III of the Emergency Home Finance Act of 1970, as amended, 12 U.S.C. §§ 1451-1459 (the “Freddie Mac Act”). Freddie Mac’s statutory mission is (i) to provide stability in the secondary market for residential mortgages; (ii) to respond appropriately to the private capital market; (iii) to provide ongoing assistance to the secondary market for residential mortgages (including activities relating to mortgages on housing for low- and moderate-income families involving a reasonable economic return that may be less than the return earned on other activities); and (iv) to promote access to mortgage credit throughout the United States (including central cities, rural areas and underserved areas) by increasing the liquidity of mortgage financing. Neither the United States nor any agency or instrumentality of the United States is obligated, either directly or indirectly, to fund the mortgage purchase or financing activities of Freddie Mac or to guarantee Freddie Mac’s securities or obligations.

Freddie Mac’s principal business consists of the purchase of (i) first-lien, conventional residential mortgages subject to certain maximum loan limits and other underwriting requirements under the Freddie Mac Act and (ii) securities backed by such mortgages. Freddie Mac finances its mortgage purchases and

15

mortgage-backed securities purchases through the issuance of a variety of securities, primarily pass-through mortgage participation certificates and unsecured debt, as well as with cash and equity capital.

On September 7, 2008, the Director of the Federal Housing Finance Agency (“FHFA”) appointed FHFA as conservator of Freddie Mac in accordance with the Federal Housing Finance Reform Act of 2008 (the “Reform Act”) and the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. On September 7, 2008, in connection with the appointment of FHFA as conservator, Freddie Mac and the U.S. Department of the Treasury (“Treasury”) entered into a Senior Preferred Stock Purchase Agreement. Also, pursuant to its authority under the Reform Act, Treasury announced that it has established the Government Sponsored Enterprise Credit Facility (a lending facility to ensure credit availability to Freddie Mac, Fannie Mae, and the Federal Home Loan Banks that will provide secured funding on an as needed basis under terms and conditions established by the Treasury Secretary to protect taxpayers) and a program under which Treasury will purchase Government Sponsored Enterprise (including Freddie Mac) mortgage-backed securities (MBS) in the open market. The announcements by FHFA and Treasury and descriptions of these programs are available at their respective websites: http://www.OFHEO.gov and http://www.Treasury.gov.

Freddie Mac registered its common stock with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934 (the “Exchange Act”), effective July 18, 2008. As a result, Freddie Mac files annual, quarterly and current reports, proxy statements and other information with the SEC. Prior to July 18, 2008, Freddie Mac prepared an annual Information Statement (containing annual financial disclosures and audited consolidated financial statements) and Information Statement Supplements (containing periodic updates to the annual Information Statement).

As described below, Freddie Mac incorporates certain documents by reference in this Official Statement, which means that Freddie Mac is disclosing information to you by referring you to those documents rather than by providing you with separate copies. Freddie Mac incorporates by reference in this Official Statement its proxy statement, and all documents that Freddie Mac files with the SEC pursuant to Section 13(a), 13(c) or 14 of the Exchange Act, after July 18, 2008 and prior to the completion of the offering of the related Bonds, excluding any information that Freddie Mac may “furnish” to the SEC but that is not deemed to be “filed.” Freddie Mac also incorporates by reference its Registration Statement on Form 10, in the form declared effective by the SEC on July 18, 2008 (the “Registration Statement”). These documents are collectively referred to as the “Incorporated Documents” and are considered part of this Official Statement. You should read this Official Statement, in conjunction with the Incorporated Documents. Information that Freddie Mac incorporates by reference will automatically update information in this Official Statement. Therefore, you should rely only on the most current information provided or incorporated by reference in this Official Statement.

You may read and copy any document Freddie Mac files with the SEC at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. These SEC filings are also available to the public from the SEC’s web site at http://www.sec.gov.

Freddie Mac makes no representations as to the contents of this Official Statement, the suitability of the 2009A-1 Bonds for any investor, the feasibility of performance of any project, or compliance with any securities, tax or other laws or regulations. Freddie Mac's role is limited to discharging its obligations under the Credit Enhancement Agreement.

THE 2009A-1 BONDS ARE NOT A DEBT OF THE UNITED STATES OF AMERICA, ANY AGENCY THEREOF, OR OF FREDDIE MAC, AND ARE NOT GUARANTEED BY THE FULL FAITH AND CREDIT OF THE UNITED STATES OF AMERICA OR BY FREDDIE MAC.

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Freddie Mac Guarantor Program

Freddie Mac has established a mortgage purchase program pursuant to which Freddie Mac purchases a group of mortgages from a single seller in exchange for a Freddie Mac Certificate representing an undivided interest in a pool consisting of the same mortgages (the “Guarantor Program”). Freddie Mac approves the institutions that may sell and service mortgages under the Guarantor Program on an individual basis after consideration of factors such as financial condition, operational capability and mortgage origination and/or servicing experience. Most sellers and servicers are HUD-approved mortgagees or FDIC-insured financial institutions.

Freddie Mac Certificates

Freddie Mac Certificates will be mortgage pass-through securities issued and guaranteed by Freddie Mac under its Guarantor Program. Freddie Mac Certificates are issued only in book-entry form through the Federal Reserve Banks’ book-entry system. Each Freddie Mac Certificate represents an undivided interest in a pool of mortgages. Payments by borrowers on the mortgages in the pool are passed through monthly by Freddie Mac to record holders of the Freddie Mac Certificates representing interests in that pool.

Payments on Freddie Mac Certificates begin on or about the fifteenth day of the first month following issuance. Each month, Freddie Mac passes through to record holders of Freddie Mac Certificates their proportionate share of principal payments on the mortgages in the related pool and one month’s interest at the applicable pass-through rate. The pass-through rate for an Freddie Mac Certificate is determined by subtracting from the lowest interest rate on any of the mortgages in the pool the applicable servicing fee and Freddie Mac’s management and guarantee fee, if any.

Freddie Mac guarantees to each record holder of an Freddie Mac Certificate the timely payment of interest at the applicable pass-through rate on the principal balance of the holder’s Freddie Mac Certificate. Freddie Mac also guarantees to each holder of a Freddie Mac Certificate (i) the timely payment of the holder’s proportionate share of monthly principal due on the related mortgages, as calculated by Freddie Mac, and (ii) the ultimate collection of the holder’s proportionate share of all principal of the related mortgages, without offset or reduction, no later than the payment date that occurs in the month by which the last monthly payment on the Freddie Mac Certificate is scheduled to be made.

Freddie Mac may pay the amount due on account of its guarantee of ultimate collection of principal on a mortgage at any time after default, but not later than 30 days following (i) the foreclosure sale of the mortgaged property, (ii) if applicable, the payment of an insurance or guaranty claim by the mortgage insurer or guarantor or (iii) the expiration of any right of redemption that the borrower may have, whichever is the last to occur. In no event, however, will Freddie Mac make payments on account of this guarantee later than one year after an outstanding demand has been made on the borrower for accelerated payment of principal or for payment of the principal due at maturity.

The obligations of Freddie Mac under its guarantees of the Freddie Mac Certificates are obligations of Freddie Mac only. The Freddie Mac Certificates, including the interest thereon, are not guaranteed by the United States and do not constitute debts or obligations of the United States or any agency or instrumentality of the United States other than Freddie Mac. If Freddie Mac were unable to satisfy its obligations under its guarantees, distributions on the Freddie Mac Certificates would consist solely of payment and other recoveries on the related mortgage; accordingly, delinquencies and defaults on the mortgages would affect distributions on the Freddie Mac Certificates and could adversely affect payments on the 2009A-1 Bonds.

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Mortgage Purchase and Servicing Standards

All mortgages purchased by Freddie Mac must meet certain standards established by the Freddie Mac Act. In addition, Freddie Mac has established its own set of mortgage purchase standards, including credit, appraisal and underwriting guidelines. These guidelines are designed to determine the value of the real property securing a mortgage and the creditworthiness of the borrower. Freddie Mac’s administration of its guidelines may vary based on its evaluation of and experience with the seller of the mortgages, the loan-to value ratio and age of the mortgages, the type of property securing the mortgages and other factors.

Freddie Mac has also established servicing policies and procedures to support the efficient and uniform servicing of the mortgages it purchases. Each servicer must perform diligently all services and duties customary to the servicing of mortgages in a manner consistent with prudent servicing standards. The duties performed by a servicer include collection and remittance of principal and interest to Freddie Mac; administration of escrow accounts; collection of insurance of guaranty claims; property inspections; and, if necessary, foreclosure. Freddie Mac monitors servicers’ performance through periodic and special reports and inspections.

In the event of an existing or impending delinquency or other default on a mortgage, Freddie Mac may attempt to resolve the default through a variety of measures. In determining which measures to pursue with respect to a given mortgage and when to initiate such measures, Freddie Mac seeks to minimize the costs that may be incurred in servicing the mortgage, as well as Freddie Mac’s possible exposure under its guarantees. However, the measures that Freddie Mac may choose to pursue to resolve a default will not affect Freddie Mac’s guarantees. In any event, Freddie Mac generally repurchases from a pool any mortgage that has remained delinquent for at least 120 consecutive days and makes payment of principal to record holders pursuant to Freddie Mac’s guarantee of ultimate collection of principal.

FLOW OF FUNDS

The Indenture creates the following trust funds to be held by the Trustee with respect to the 2009A-1 Bonds: Program Fund; Capitalized Interest Fund; Revenue Fund; Interest Fund; Principal Fund; Redemption Fund; Program Expense Fund; Rebate Fund and Cost of Issuance Fund. The Indenture also created the Escrow Fund with respect to the proceeds of the 2009A Bonds that have not been released from the Escrow Fund. The Trustee will establish a separate Account within each of such Funds for each Series of Bonds (except the Escrow Fund), including a 2009A-1 Account within each Fund for the 2009A-1 Bonds in connection with the establishment of the 2009A-1 Release Date.

2009A-1 Account of Program Fund

Moneys in the 2009A-1 Account of the Program Fund will be derived from transfers from the Escrow Fund, from any Issuer funds or other available moneys deposited thereto in connection with a Release Date and from proceeds of the 2009A-1 Market Bonds.

Moneys in the 2009A-1 Account of the Program Fund will be applied as follows:

(i) to purchase 2009A-1 Certificates at the applicable Certificate Purchase Price during the 2009A-1 Certificate Purchase Period, and upon each such purchase to transfer the amount or amounts specified in the Indenture to the 2009A-1 Account of the Revenue Fund and the 2009A-1 Account of the Cost of Issuance Fund as set forth in the Indenture; and

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(ii) to apply any remaining balance in the 2009A-1 Account of the Program Fund to the redemption of 2009A-1 Bonds on the 2009A-1 Nonorigination Redemption Date (see “The 2009A-1 Bonds—Redemption—Redemption from Unspent Proceeds in 2009A-1 Account of Program Fund”).

Moneys in the Program Fund will be used only to purchase Certificates meeting the requirements set forth in the Indenture and the Agreement, including the requirements relating to the reservation of amounts for 2009A-1 Mortgage Loans in federally specified targeted areas.

2009A-1 Account of Capitalized Interest Fund

Amounts may be deposited in the 2009A-1 Account of the Capitalized Interest Fund in connection with the 2009A-1 Release Date. Amounts in such Account shall be used to pay interest on the 2009A-1 Bonds and related Program Expenses if moneys in the 2009A-1 Account of the Revenue Fund are insufficient for such purposes. Amounts remaining in the 2009A-1 Account of the Capitalized Interest Fund after the second Interest Payment Date after the related final Nonorigination Redemption Date (or, if earlier, the date on which all moneys in the 2009A-1 Account of the Program Fund have been fully expended), and provided that such moneys are not required to be transferred to the 2009A-1 Account of the Rebate Fund, may be released from the lien of the Indenture and transferred to the Issuer in accordance with the provisions of the Indenture.

2009A-1 Account of Cost of Issuance Fund

Amounts will be deposited in the 2009A-1 Account of the Cost of Issuance Fund on the 2009A-1 Release Date (in the amount shown above under “Sources and Uses of Funds”) and such amounts will be used to pay the costs of issuing and releasing the 2009A-1 Bonds. Additional amounts will be deposited in the Cost of Issuance Fund in connection with each Release Date to pay for costs relating to the establishment of such Release Date and the related Conversion of Bonds to the Permanent Rate and the issuance of the related Market Bonds. Any amounts remaining in the Cost of Issuance Fund three months after the end of the final Certificate Purchase Period are to be transferred in accordance with instructions of the Issuer. Amounts deposited in the Cost of Issuance Fund are not pledged as security for the 2009A-1 Bonds.

2009A-1 Account of Revenue Fund

A 2009A-1 Account will be established in the Revenue Fund. All Revenues related to the 2009A-1 Bonds are required to be deposited in the 2009A-1 Account of the Revenue Fund (except as described in the Indenture with respect to a portion of certain of the first payment of interest with respect to each Certificate which shall be remitted to the Repurchaser) as and when received by the Trustee. Interest earnings on all 2009A-1 Accounts of Funds (except the 2009A-1 Accounts of the Cost of Issuance Fund and the Rebate Fund, each of which will retain its earnings) will be deposited in the 2009A-1 Account of the Revenue Fund.

Except as otherwise provided in the 2009A-1 Release Date Annex, the Trustee is required to transfer amounts deposited in the 2009A-1 Account of the Revenue Fund on each Interest Payment Date to the related 2009A-1 Account of the following Funds in the following order of priority:

(a) to the Interest Fund the amount of interest due and payable on such Interest Payment Date upon the related Bonds;

(b) to the Principal Fund, the amount of principal due and payable on the related Bonds, whether by sinking fund redemption or maturity, on such Interest Payment Date;

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(c) to the Redemption Fund, an amount equal to all Prepayments received with respect to the related Certificates; and

(d) to the Rebate Fund, any related Rebate Amount specified by the Rebate Analyst;

(e) to the Program Expense Fund, the amounts necessary to pay related Program Expenses then due and payable; and

(f) any balance shall be retained in the related Account of the Revenue Fund; provided that on and after the second Interest Payment Date after the related Nonorigination Redemption Date (or, if earlier, the date on which all moneys in the related Account of the Program Fund have been fully expended), and if such moneys are not required to be transferred to the related Account of the Rebate Fund, any balance shall be transferred as to the related Account of the Redemption Fund.

Notwithstanding the foregoing, upon the optional redemption of the 2009A-1 Bonds, amounts for such a redemption shall be deposited in special subaccount of the related Account of the Redemption Fund and applied to the redemption of the related Bonds on the applicable redemption date.

2009A-1 Account of Interest Fund

Within the Interest Fund a separate 2009A-1 Account shall be established for the 2009A-1 Bonds. Amounts in such 2009A-1 Account are required to be used to pay the interest due and payable on the 2009A-1 Bonds. If at any time the amount in such 2009A-1 Account is insufficient to pay interest on the 2009A-1 Bonds when due, the Trustee is required to transfer to such Account the amount of such deficiency by withdrawing said amount from the following Funds in the following order of priority: (i) the 2009A-1 Account of the Capitalized Interest Fund, (ii) the 2009A-1 Account of the Revenue Fund, (iii) the 2009A-1 Account of the Redemption Fund (but not for amounts for which notice of redemption has been given), and (iv) the 2009A-1 Account of the Principal Fund.

2009A-1 Account of Principal Fund

Within the Principal Fund a separate 2009A-1 Account shall be established for the 2009A-1 Bonds. Amounts in such 2009A-1 Account are required to be used to pay the principal due and payable (including principal due by sinking fund payment) on the 2009A-1 Bonds. If at any time the amount in such 2009A-1 Account is insufficient to pay principal on the 2009A-1 Bonds when due, the Trustee is required to transfer to such Account the amount of such deficiency by withdrawing said amount from the following Funds in the following order of priority: (i) the 2009A-1 Account of the Capitalized Interest Fund, (ii) the 2009A-1 Account of the Revenue Fund, and (iii) the 2009A-1 Account of the Redemption Fund (but not for amounts for which notice of redemption has been given).

2009A-1 Account of Redemption Fund

Within the Redemption Fund a separate 2009A-1 Account shall be established for the 2009A-1 Bonds. The Trustee is required to apply amounts in such Account to the redemption of 2009A-1 Bonds as described under “The 2009A-1 Bonds—Redemption.”

2009A-1 Account of Program Expense Fund

Within the Program Expense Fund a separate 2009A-1 Account shall be established for the 2009A-1 Bonds. Amounts in such Account are required to be used and withdrawn by the Trustee for the purpose of paying Program Expenses for the 2009A-1 Bonds.

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2009A-1 Account of Rebate Fund

Within the Rebate Fund a separate 2009A-1 Account shall be established for the 2009A-1 Bonds. The Trustee is required to deposit into such Account the related Rebate Amount, if any, and pay such amount to the United States at the times specified in the Indenture.

STRUCTURING ASSUMPTIONS AND RISKS

The ability of the Trustee (on behalf of the Issuer) to pay principal and interest due on the 2009A-1 Bonds depends upon various factors, including the timely payments of principal of and interest on the Certificates and the timely application of those payments in accordance with the terms of the Indenture. Set forth below are certain of the factors relating to the timely payment of the 2009A-1 Bonds relating to each Release Date:

1. Timely payment of amounts due under any Investment Securities held in the 2009A-1 Account of the Program Fund (pending purchase of the 2009A-1 Certificates).

2. 2009A-1 Certificates with an aggregate principal balance equal to the principal amount of the 2009A-1 Bonds and bearing interest at the related Pass-Through Rate (as set forth in the 2009A-1 Release Date Annex) will be acquired by the Trustee from the Repurchaser on the 2009A-1 Release Date (and to the extent not so purchased, on the last date of the 2009A-1 Certificate Purchase Period) from moneys in the 2009A-1 Account of the Program Fund. The 2009A-1 Mortgage Loans will have terms of 30 years and bear interest at a rate .50% higher than the related Pass-Through Rate (unless otherwise provided in the 2009A-1 Release Date Annex). The 2009A-1 Mortgage Loan rates and related Pass-Through Rates may be subject to increase or decrease if the conditions set forth in the 2009A-1 Release Date Annex are met.

3. Payments on the 2009A-1 Certificates will be made on a timely basis.

4. The Trustee will redeem 2009A-1 Bonds on a timely basis in accordance with the provisions of the Indenture.

5. The related Program Expenses will be paid in the amounts and at the time required under the Indenture.

The inside cover page of this Official Statement sets forth the maximum principal amounts of the 2009A-1 Bonds; the final principal amounts of such Bonds will not be established until the Final Bond Amount Determination Date. The final 2009A-1 Bond principal amounts will be based on the principal amount of 2009A-1 Mortgage Loans originated during the 2009A-1 Origination Period and certain other factors, such as the pooling of such 2009A-1 Mortgage Loans into 2009A-1 Certificates. To the extent 2009A-1 Mortgage Loans are not originated in the maximum amount of $30,000,000, the final principal amounts of the 2009A-1 Bonds will be reduced.

There are many risks relating to the origination of 2009A-1 Mortgage Loans, certain of which are described below. As a result of these risks, there can be no certainty as to the level of 2009A-1 Mortgage Loan originations during the 2009A-1 Origination Period, and in fact, 2009A-1 Mortgage Loan originations may in fact be significantly less than $30,000,000.

One significant risk is the availability of other loan programs, including programs offered by other housing bond issuers in the Issuer’s Program Area, that have loan terms which are more attractive than those offered by the Issuer’s Program, such as lower mortgage rates and/or greater down payment

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assistance. Another significant risk is that prevailing mortgage interest rates could decline sufficiently to make the terms of the 2009A-1 Mortgage Loans unattractive to potential homebuyers. That is a significant risk under the Issuer’s Program since the principal component of the Permanent Rate for the 2009A-1 Program Bonds was established in December 2009 and not at the time of each Release Date. If interest rates decline and the Issuer’s Program is rendered less attractive, the Issuer may determine to issue a new series of bonds (including bonds that would refund the 2009A-1 Bonds in whole or in part) that would offer more attractive Mortgage Loan terms. No assurance can be given that the interest rate and/or down payment assistance offered under the Issuer’s Program will be competitive, or will remain competitive, with the terms of other mortgage loans available to eligible mortgagors, including other programs offered by the Issuer, in the Issuer’s Program Area.

It is also possible that administrative problems relating to the Issuer’s Program could occur, such as the inability of the Issuer to enter into a warehousing arrangement for the Certificates (in which Certificates would be held by the Issuer or a third party for a period of time before delivery for purchase by the Trustee), which could result in significant additional costs for the Issuer’s Program (so-called “negative arbitrage” costs relating to Program Fund investments) and therefore reduce the ability of the Issuer to establish Release Dates. Other administrative problems could include the failure of Participants to timely submit loan files or sell 2009A-1 Mortgage Loans to the Servicer, the submission by Participants of defective loan files, or the failure of the Servicer to timely purchase 2009A-1 Mortgage Loans from Participants. In addition, the Servicer could fail to timely pool the 2009A-1 Mortgage Loans or convert such pools into Certificates, or sell the Certificates to the Trustee on a timely basis. Further, GNMA, Fannie Mae or Freddie Mac could take actions relating to their guaranty or change existing procedures that would result in an inability to timely deliver 2009A-1 Certificates to the Trustee. See “The Issuer’s Program—General.”

Another risk is the risk is that the Repurchaser does not sell the 2009A-1 Certificates to the Trustee on the 2009A-1 Release Date in accordance with the Repurchase Agreement. See “Introduction” for a brief summary of the Repurchase Agreement.

If for any reason described in the preceding three paragraphs, or for any other reason, moneys in a the 2009A-1 Account of the Program Fund are not applied to the purchase of 2009A-1 Certificates, unexpended moneys in such Account will be applied to the redemption of 2009A-1 Bonds on the 2009A-1 Nonorigination Redemption Date. See “The 2009A-1 Bonds—Redemption—Redemption from Unspent Proceeds in 2009A-1 Program Fund Account.”

The average life of the 2009A-1 Bonds is uncertain due to the early repayment risk associated with the 2009A-1 Mortgage Loans. 2009A-1 Mortgage Loans may be terminated prior to final maturity as a result of prepayment, default, sale, condemnation, casualty loss or noncompliance with the Issuer’s Program. There is no completely reliable statistical base with which to predict the level of prepayment in full or other early termination of the 2009A-1 Mortgage Loans and the resulting effect on the average life of the 2009A-1 Bonds. See “Average Life of Bonds” below.

The dollar amount of commitments to guarantee securities that GNMA can approve and the dollar amount that FHA, VA and USDA-RHS can insure or guarantee in any federal fiscal year are limited by statute and administrative procedures. If an appropriation act is not passed in any federal fiscal year or if GNMA, FHA, VA or USDA-RHS reaches the limit of its authority, or if the FHA maximum loan limit is reduced, or if GNMA, in its sole discretion, or the federal government, alters or amends the GNMA I or II Mortgage-Backed Securities Program or Fannie Mae or Freddie Mac alters its mortgage-backed certificate program in such a way as to prevent the Participants from originating 2009A-1 Mortgage Loans, the Participants might not be able to originate 2009A-1 Mortgage Loans and the Servicer may not be able to issue or deliver GNMA Certificates, Fannie Mae Certificates or Freddie Mac in the anticipated

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principal amount. In addition, the Servicer may become unqualified to issue, or exchange 2009A-1 Mortgage Loans for, Certificates and a successor Servicer may have to be appointed. The failure to originate 2009A-1 Mortgage Loans, or the inability of the Servicer or any other person to issue (or exchange 2009A-1 Mortgage Loans for) Certificates, or the failure to deliver Certificates to the Trustee in the anticipated amount, would result in the mandatory redemption of Bonds. See “The 2009A-1 Bonds—Redemption—Redemption from Unspent Proceeds in 2009A-1 Account of Program Fund.”

The remedies available upon an event of default under the Indenture, the Agreement, the Continuing Disclosure Agreement or other documents described herein are in many respects dependent upon regulatory and judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically Title 11 of the United States Code, the remedies specified by the Indenture, the Agreement, the Continuing Disclosure Agreement or other documents may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the 2009A-1 Release Date will be qualified as to the enforceability of the various legal instruments by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally.

Average Life of Bonds

The maturities of the 2009A-1 Bonds have been fixed based in part on the assumption that there will be no principal prepayments of 2009A-1 Certificates on and after the 2009A-1 Release Date; however, it is in fact anticipated that significant prepayments will in fact occur based upon principal prepayments of the 2009A-1 Mortgage Loans backing the 2009A-1 Certificates. Weighted average life refers to the average amount of time that will elapse from the date of issuance of a security until each dollar of principal of such security will be repaid to the investor. The weighted average life of each maturity of the 2009A-1 Bonds will be influenced by the rate at which principal on the 2009A-1 Certificates is paid. Principal payments on Certificates may be in the form of scheduled principal payments or prepayments (for this purpose, the term “prepayment” includes prepayments and liquidations due to default or other disposition of the 2009A-1 Mortgage Loans backing the Certificates, including payments on the FHA insurance, USDA-RHS guaranty, the VA guaranty or a private mortgage insurance policy). Prepayments on pass-through certificates such as the Certificates are commonly measured by a prepayment standard or months. The model used in the following discussion is the model adopted by The Securities Industry and Financial Markets Association (successor to The Bond Market Association, which was previously known as the Public Securities Association) (“PSA”) prepayment standard or model (the “PSA Prepayment Model”). The PSA Prepayment Model is based on an assumed rate of prepayment each month of the then unpaid principal balance of the 2009A-1 Mortgage Loans. 100% of the PSA Prepayment Model assumes a prepayment rate of .2% per annum of the unpaid principal balance of the 2009A-1 Mortgage Loans for the first month of the life of the related 2009A-1 Mortgage Loans increasing by .2% each month for the next 29 months of the life of the related 2009A-1 Mortgage Loans and then assumes a constant prepayment rate of 6% per annum of the unpaid principal balance for the remaining life of the related 2009A-1 Mortgage Loans.

As used in the following table, “0% PSA” assumes no prepayments on the principal of the Certificates. “50% PSA” assumes the principal of the Certificates will prepay at a rate one-half as fast as the prepayment rates for 100% of the PSA Prepayment Model. “150% PSA” assumes the principal of the Certificates will prepay at a rate one and a half times as fast as the prepayment rates for 100% of the PSA Prepayment Model. “200% PSA” assumes the principal of the Certificates will prepay at a rate twice as fast as the prepayment rates for 100% of the PSA Prepayment Model. “300% PSA” assumes the principal of the Certificates will prepay at a rate 3 times as fast as the prepayment rates for 100% of the PSA Prepayment Model. “400% PSA” assumes the principal of the Certificates will prepay at a rate 4 times as fast as the prepayment rates for 100% of the PSA Prepayment Model. “500% PSA” assumes the

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principal of the Certificates will prepay at a rate 5 times as fast as the prepayment rates for 100% of the PSA Prepayment Model.

The figures in the table set forth below were computed using the assumptions previously listed and various additional assumptions, including the following: (i) 90% of the 2009A-1 Certificates will be purchased on the 2009A-1 Release Date and 10% of such Certificates will be purchased within one months thereafter, and (ii) the 2009A-1 Bonds will not be optionally redeemed. There can be no assurance that such assumptions will in fact prove accurate, particularly with respect to the assumption that the 2009A-1 Bonds will not be optionally redeemed.

Prepayment Assumption

Projected Weighted

Average Lives (in Years) for

2009A-1 Market Bonds

Due 6/1/20

Projected Weighted


2009A-1 Market Bonds

Due 6/1/28

Projected Weighted

Average Lives (in Years) for Premium PAC

Bonds (Due 12/1/28)

Projected Weighted


2009A-1 Program Bonds (Due 12/1/41)

0% PSA 6.6. 14.7. 11.5. 23.8. 25% PSA 6.6. 14.5. 8.3. 20.3. 50% PSA 6.6. 13.8. 6.3. 17.4. 75% PSA 6.6. 12.6. 5.1. 15.1.

100% PSA 6.2. 10.7. 5.1. 13.3. 150% PSA 5.5. 8.3. 5.1. 10.5. 200% PSA 5.0. 6.6. 5.1. 8.7. 300% PSA 4.0. 4.5. 5.1. 6.4. 400% PSA 3.2. 3.2. 5.1. 5.0. 500% PSA 3.1. 3.2. 3.8. 4.2. 600% PSA 3.0. 3.0. 3.0. 3.6.

There is no assurance that prepayment of the 2009A-1 Certificate principal will conform to any level of the PSA Prepayment Model. The rate of principal payments on pools of single family mortgage loans (such as the 2009A-1 Mortgage Loans backing the 2009A-1 Certificates) is influenced by a variety of economic, geographic, social and other factors, including the level of mortgage interest rates and the rate at which homeowners sell their homes or default on their mortgage loans. In general, if prevailing interest rates fall significantly, mortgage loans are likely to be subject to higher prepayment rates than if prevailing rates remain at or above the interest rates on such mortgage loans. Conversely, if interest rates rise, the rate of prepayment would be expected to decrease. Other factors affecting prepayment of mortgage loans include changes in mortgagors’ housing needs, job transfers, unemployment and mortgagors’ net equity in the mortgaged properties. In addition, as homeowners move or default on their mortgage loans, the houses are generally sold and the mortgage loans prepaid, although under certain circumstances the mortgage loans may be assumed by a new buyer. 2009A-1 Mortgage Loans may also be terminated prior to final maturity as a result of condemnation, casualty loss or noncompliance with the Issuer’s Program. There is no reliable statistical base with which to predict the level of prepayment in full or other early termination of the 2009A-1 Mortgage Loans and the resulting effect on the average life of the 2009A-1 Bonds. Because of the foregoing and since the rate of prepayment of principal of each 2009A-1 Bond will depend on the rate of repayment (including prepayments) of the 2009A-1 Certificates, the actual maturity of any 2009A-1 Bond cannot be predicted, but is likely to occur earlier than its stated maturity.

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THE ISSUER’S PROGRAM

General

The Issuer has established the Issuer’s Program for the purpose assisting persons of low and moderate income afford the costs of acquiring and owning decent, safe and sanitary housing as authorized pursuant to the Act.

Under the Agreement, the Lenders will originate 2009A-1 Mortgage Loans and sell them to the Servicer. Various Lenders are anticipated to participate in the Issuers’ Program, and additional Lenders may be added from time to time. However, there can be no assurance that any Lender will actually originate 2009A-1 Mortgage Loans or that any Lender will not resign. The Servicer will service all the 2009A-1 Mortgage Loans. The Servicer will pool the 2009A-1 Mortgage Loans into 2009A-1 Certificates and sell the Certificates to the Repurchaser (or the Trustee). On or after the 2009A-1 Release Date, the Trustee will purchase the Certificates from the Repurchaser (or the Trustee).

The 2009A-1 Mortgage Loans will be made to qualified borrowers with respect to single family residences in the Program Area. The Issuers have covenanted to comply with the targeted area requirements under the Code.

On or after the 2009A-1 Bond pricing date, a written notice (a “Lender Series Notice”) shall be prepared and delivered to the Lenders. At such time the Lenders shall be able to make 2009A-1 Mortgage Loan commitments and close 2009A-1 Mortgage Loans for the 2009A-1 Origination Period.

Description of 2009A-1 Mortgage Loans

For the 2009A-1 Bonds, the Issuer’s Program will offer (i) 2009A-1 Mortgage Loans with the initial interest rate of 4.75% per annum, subject to adjustment as set forth in the Agreement and a Homebuyer Assistance Amount equal to 4.00% of the original principal amount of such 2009A-1 Mortgage Loans funded by a second mortgage loan financed by the Issuers’ Taxable Single Family Residual Capital Appreciation Bonds, Series 2010A. Certain 2009A-1 Mortgage Loans may be offered without any Homebuyer Assistance Amount.

Homebuyer Assistance Amounts may be applied to the payment of the applicable origination fee and closing costs, with any balance to be applied to the Mortgagor’s down payment with respect to the Home’s purchase price. No portion of such amount is permitted to be paid directly to the Mortgagor.

All 2009A-1 Mortgage Loans will provide for monthly level payments of principal and interest, with payments due on the first day of each month. Payments of principal and interest will commence not later than the first day of the second calendar month following the closing of a 2009A-1 Mortgage Loan. Interest will be paid in arrears. All 2009A-1 Mortgage Loans are required to be (i) secured by a mortgage creating a first lien (subject only to certain permitted encumbrances) on a Home and (ii) (a) insured by the Federal Housing Administration (“FHA”), (b) guaranteed by the Department of Veterans Affairs (“VA”), (c) guaranteed by the Rural Housing Service of the Department of Agriculture (“USDA-RHS”), or (d) Conventional Mortgage Loans meeting the requirements of Fannie Mae or Freddie Mac, as applicable. The 2009A-1 Mortgage Loans are assumable, but only if certain conditions are met.

In order to be insured by FHA, a 2009A-1 Mortgage Loan must be in an amount not in excess of the applicable FHA loan limit. There is no limit on the size of a Mortgage Loan which may be the subject of a VA guaranty; however, the maximum amount of a VA-guaranteed 2009A-1 Mortgage Loan which may be included in a GNMA Pool is subject to a maximum limit. With respect to the 2009A-1 Bonds, all

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2009A-1 Mortgage Loans will be FHA-insured or VA-guaranteed Mortgage Loans and will not be Conventional Mortgage Loans, unless such loans are permitted by the Issuers.

Mortgage Loan Eligibility Requirements

2009A-1 Mortgage Loans must comply with the terms of the Act, Section 143 of the Code and the Agreement. Among other requirements, each 2009A-1 Mortgage Loan must be made to a Mortgagor (i) who intends to occupy the Home financed by such 2009A-1 Mortgage Loan as such Mortgagor’s principal place of residence within 60 days after the date of such 2009A-1 Mortgage Loan, (ii) who has not had a present ownership interest in a principal residence for the three years preceding the date of the 2009A-1 Mortgage Loan (provided that this requirement is not applicable to a Home located in certain designated areas, (iii) who has not had a prior mortgage loan (other than a construction period loan, bridge loan or similar temporary initial financing with a term of 24 months or less) on such Home at any time prior to the execution of the 2009A-1 Mortgage Loan, and (iv) whose Household Income is below the applicable limit set forth in the Agreement.

The Household Income limitations contained in the Agreement are as follows:

(1) With respect to Homes in the Program Area other than in a Targeted Area, each 2009A-1 Mortgage Loan will be made to a Mortgagor whose Household Income does not exceed 115% of the greater of (i) statewide median family income, or (ii) median family income for such area (“Federal Law Base Income”) in the case of a family of three or more individuals and 100% of Federal Law Base Income in the case of a family of fewer than three individuals.

(2) With respect to Homes located in Targeted Areas, each 2009A-1 Mortgage Loan shall be made to a Mortgagor whose Household Income does not exceed (a) 140% of Federal Law Base Income in the case of a family of three or more individuals or (b) 120% of Federal Law Base Income in the case of a family of fewer than three individuals; provided that one-third of the amount of financing provided for Homes located in Targeted Areas may be made without regard to the Mortgagor’s income.

In addition, as more fully set forth in the Agreement, the purchase price of a Home cannot exceed 90% of the Average Area Purchase Price of the area in which the Home is located (110% if the Home is located in a Targeted Area).

Purchase of Certificates

With respect to the 2009A-1 Release Date, the Trustee, on behalf of the Issuers, will purchase the related Certificates from the Repurchaser, and for non-warehoused Certificates, the Servicer, Servicer at the applicable purchase price.

The Servicer

THE FOLLOWING INFORMATION ABOUT THE SERVICER RELATES TO AND WAS SUPPLIED BY U.S. BANK NATIONAL ASSOCIATION. SUCH INFORMATION HAS NOT BEEN VERIFIED BY THE ISSUERS, THE UNDERWRITER OR ITS COUNSEL OR CO-BOND COUNSEL AND IS NOT GUARANTEED AS TO COMPLETENESS OR ACCURACY BY AND IS NOT TO BE CONSTRUED AS A REPRESENTATION OF, THE ISSUER, THE UNDERWRITER OR ITS COUNSEL OR CO-BOND COUNSEL.

The Servicer is U.S. Bank National Association, operating by and through its U.S. Bank Home Mortgage – MRBP Division. As of March 10, 2010, U.S. Bank National Association, operating by and

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through its U.S. Bank Home Mortgage–MRBP Division, serviced 147,503 single-family mortgage loans with an aggregate principal balance of approximately $12.0 billion. U.S. Bank National Association currently services single-family mortgage loans for mutual savings banks, life insurance companies, savings and loan associations and commercial banks, as well as Fannie Mae, GNMA and Freddie Mac.

As of March 10, 2010, according to its unaudited quarterly financial statements, U.S. Bancorp had total assets of approximately $284.1 billion and a net worth of $26.7 billion. For the three months ended March 10, 2010, the Servicer, through its MRBP Division, originated and purchased single-family mortgage loans in the total principal amount of approximately $406.6 million.

The Servicer is (i) an FHA- and VA-approved lender in good standing, (ii) a GNMA-approved seller and servicer of mortgage loans and an issuer of mortgage-backed securities guaranteed by GNMA, (iii) a Fannie Mae approved seller and servicer of Fannie Mae Securities, and (iv) a Freddie Mac-approved seller and servicer of Freddie Mac mortgage-backed securities.

The holding company for U.S. Bank National Association is U.S. Bancorp, the 6th largest financial services holding company in the United States.

The Servicer is not liable for the payment of the principal of the 2009A-1 Bonds or the interest or redemption premium, if any thereon.

THE INDENTURE

Investment of Funds

All amounts held under the Indenture are required to be continuously invested in permitted Investment Securities, and such Investment Securities shall pay interest and mature not later than the dates on which such moneys will be required by the Trustee. For the purpose of determining the amount in any such Fund, all Investment Securities credited to such Fund are required to be valued in the manner described in the Indenture.

Certain Tax Covenants

The Issuer covenants in the Indenture that it will not use or permit the use of any proceeds of the 2009A-1 Bonds to be tax-exempt or any other funds of the Issuer, directly or indirectly, to acquire any securities or obligations, and will not use or permit the use of any amounts received by the Issuer or the Trustee with respect to the 2009A-1 Certificates and underlying 2009A-1 Mortgage Loans in any manner, and will not take or permit to be taken, to the best of the Issuer’s knowledge, any other action or actions, which would cause 2009A-1 Bond to be an “arbitrage bond” under Section 148 of the Code or violate the requirements of Section 143(g) of the Code. The Issuer further covenants under the Indenture that it will not use or permit the use of any proceeds of the Bonds purporting to be tax-exempt or any other funds of the Issuer, directly or indirectly, or in any manner, and will not take or permit to be taken any other action or actions, which would result in any of such Bonds being treated as an obligation not described in Section 103(a) of the Code. See “Tax Matters.”

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Defaults and Remedies; Rights of Bondholders

Each of the following events is an “event of default” under the Indenture:

(A) default in the due and punctual payment of the principal amount or redemption price of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed or by proceedings for redemption or purchase or by declaration of acceleration or otherwise;

(B) default in the due and punctual payment of any installment of interest on any Bond when and as such interest installment shall become due and payable;

(C) default by the Issuer in the observance of any of the covenants, agreements or conditions on its part contained in the Indenture or in the Bonds (other than in clauses (A) or (B) above), if such default has continued for a period of 60 days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the Issuer by the Trustee, or to the Issuer and the Trustee by the Owners of not less than a majority in aggregate principal amount of the Bonds at the time outstanding; or

(D) certain acts of bankruptcy or insolvency on the part of the Issuer as described in the Indenture.

If an event of default under clause (A) or (B) above occurs and is continuing, the Trustee may, and upon written direction of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time outstanding will, upon notice in writing to the Issuer, declare the principal of and interest on all the Bonds then outstanding due and payable immediately. If an Event of Default under clause (C) or (D) occurs, the Trustee, upon written direction of the Owners of 100% in aggregate principal amount of the Bonds then outstanding will, upon notice in writing to the Issuer, declare the principal of and interest on all the Bonds then outstanding due and payable immediately.

Any such declaration, however, is subject to the condition that if, at any time after such declaration and before any judgment or decree for the payment of the moneys due has been obtained or entered, the Issuer deposits, or causes to be deposited, with the Trustee a sum sufficient to pay the principal amount, redemption price or purchase price of and installments of interest on the Bonds the payment of which is overdue, with interest on such overdue principal at the rate borne by the respective Bonds, and the reasonable charges and expenses of the Trustee, and the other conditions of the Indenture are met, then the Owners of not less than a majority in aggregate principal amount of the Bonds then outstanding, by written notice to the Issuer and to the Trustee, may, on behalf of the Owners of all the Bonds, rescind and annul such declaration and its consequences and waive such default, but no such rescission and annulment will extend to or affect any subsequent default, or impair or exhaust any right or power consequent thereon.

If an event of default under the Indenture occurs and is continuing, all Revenues and any other amounts then held or thereafter received by the Trustee under any of the provisions of the Indenture (excluding the Rebate Amounts and the amounts held in the Cost of Issuance Fund) are required to be applied by the Trustee in order of priority set forth in the Indenture (and particularly Appendix A thereto).

If an event of default under the Indenture shall occur and be continuing, then the Trustee may, and upon the written request of the Owners of not less than 25% in aggregate principal amount of the Bonds then outstanding, and upon being indemnified to its satisfaction, is required to, proceed by suit or suits, at law or in equity, or by any other appropriate legal or equitable remedy, to enforce the payment of principal of and interest on the Bonds under a judgment or decree of a court or courts of competent

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jurisdiction or by the enforcement of any other appropriate legal or equitable remedy, as the Trustee determines to be most effective to protect and enforce any of its rights or the rights of the Owners under the Indenture.

Anything in the Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the Bonds then outstanding have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method of conducting all remedial proceedings taken by the Trustee under the Indenture, provided that the Trustee has been indemnified to its satisfaction and such direction will not be otherwise than in accordance with the law and the provisions of the Indenture, and that the Trustee will have the right to decline to follow any such direction which in the opinion of counsel rendered to the Trustee would be unjustly prejudicial to Owners not parties to such direction.

No Owner of any Bond has the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under the Indenture, the Act or any other applicable law with respect to such Bond, unless (A) such Owner has given to the Trustee written notice of the occurrence of an event of default under the Indenture; (B) the Owners of not less than 25% in aggregate principal amount of the Bonds then outstanding have made written request upon the Trustee to exercise the powers granted under the Indenture or to institute such suit, action or proceeding in its own name; (C) such Owner or said Owners have tendered to the Trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request; and (D) the Trustee has refused or omitted to comply with such request for a period of 60 days after such written request has been received by, and said tender of indemnity has been made to, the Trustee. No one or more Owners of Bonds has any right to affect, disturb or prejudice the security of the Indenture or the rights of any other Owners of Bonds, or to enforce any right under the Indenture, the Act, or other applicable law with respect to the Bonds, except in the manner therein provided and all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner therein provided and for the benefit and protection of all Owners of the outstanding Bonds, subject to the provisions of the Indenture.

Supplemental Indentures

Subject to the restriction set forth in Appendix A of the Indenture, the Indenture and the rights and obligations of the Issuer and of the Owners of the Bonds may be modified or amended at any time by a supplemental indenture which will become effective when the written consent of the Owners of a majority in aggregate principal amount of the Bonds then outstanding has been filed with the Trustee. No such modification or amendment will (1) extend the stated maturity of any Bond, or reduce the amount or principal thereof, or reduce the rate of interest thereon, or extend the time of payment of interest thereof without the consent of the Owner of each Bond so affected, or (2) reduce the aforesaid percentage of Bonds the consent of which the Owners of which is required to effect any such modification or amendment, or (3) permit the creation of any lien on the Revenues or any other assets pledged under the Indenture that is on a parity with or superior to the lien created by the Indenture, or deprive the Owners of the lien created by the Indenture upon the Revenues and other assets, or (4) authorize the sale or other disposition of the Certificates after their acquisition, except otherwise permitted under the Indenture, without the consent of the Owners of all of the Bonds then outstanding.

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Subject to the restriction set forth in Appendix A of the Indenture, the Indenture and the rights and obligations of the Issuer and of the Owners of the Bonds may also be modified or amended at any time by a supplemental indenture, which will become effective upon execution by the Issuer and the Trustee (or such later date as may be specified in such supplemental indenture), without the consent of any Owners, but only to the extent permitted by law and only for any one or more of the following purposes:

(1) to add to the covenants and agreements of the Issuer in the Indenture other covenants and agreements to be observed, to pledge or assign additional security for the Bonds, or to surrender any right or power reserved to or conferred upon the Issuer under the Indenture;

(2) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision contained in the Indenture, or in regard to any matter or question arising under the Indenture, as the Issuer may deem necessary or desirable, which, in any such case in the opinion of the Trustee, will not materially adversely affect the interests of the Owners of the Bonds;

(3) to modify, amend or supplement the Indenture in such manner as to permit the qualification thereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and which will not materially adversely affect the interests of the Owners of the Bonds;

(4) to modify, amend or supplement the Indenture in such manner as in the opinion of Bond Counsel is necessary to preserve the excludability of interest on any Bond from federal gross income and which will not materially adversely affect the interests of the Owner of any Bonds; or

(5) to obtain or maintain a rating from a Rating Agency;

In connection with the execution and delivery of a supplemental indenture, the Trustee is required to receive an opinion of Bond Counsel to the effect that the supplemental indenture is authorized under the Act and by proper action of the Issuer, that the supplemental indenture is authorized or permitted by the Indenture and by proper action of the Issuer and that execution and delivery of the supplemental indenture will not adversely affect the exclusion of interest on any Bonds (which purport to be tax-exempt) from gross income for federal income tax purposes.

The Trustee

The Issuer may remove the Trustee at any time with or without cause unless an event of default under the Indenture has occurred and is continuing. The Issuer is required to remove the Trustee if at any time requested to do so in writing by the registered owners of not less than a majority in aggregate principal amount of all the bonds then outstanding under the Indenture or if at any time the Trustee ceases to be eligible in accordance with the Indenture, or if the Trustee becomes incapable of acting, or commits certain acts of bankruptcy or insolvency, in each case by giving written notice of such removal to the Trustee and the Issuer is required to appoint a successor Trustee, provided that any such successor trustee must be acceptable to the Rating Agency.

The Trustee may at any time resign by giving written notice of such resignation to the Issuer and by giving the Owners written notice of such resignation sent by first-class mail, but such resignation will not be effective until the successor Trustee has been appointed and has accepted such appointment as provided in the Indenture and has been approved. Upon receiving such notice of resignation, the Issuer is

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required to promptly appoint a successor Trustee, provided that any such successor Trustee must be acceptable to the Rating Agency.

Any removal or resignation of the Trustee and appointment of a successor Trustee will become effective upon acceptance of appointment by the successor Trustee (subject to approval of the GSEs as described in the Indenture). Promptly upon such acceptance, the Issuer will give written notice thereof to the Owners in writing. If no successor Trustee has been appointed and has accepted appointment within 45 days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any bond owner (on behalf of himself and all other bond owners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee.

Defeasance

If the Issuer pays and discharges the entire indebtedness on all Bonds outstanding in any one or more of the following ways by:

(i) paying or causing to be paid the principal amount or redemption price of and interest on Bonds outstanding, as and when the same become due and payable;

(ii) depositing, in trust, at or before maturity, money or securities in the necessary amount (as provided in the Indenture) to pay or redeem all Bonds outstanding; or

(iii) delivering to the Trustee, for cancellation by it, all of the Bonds outstanding;

and if the Issuer also pays or causes to be paid all other sums payable under the Indenture by the Issuer (including Trustee’s fees and expenses and other Program Expenses), then and in that case, at the election of the Issuer, and notwithstanding that any Bonds have not been surrendered for payment, the Indenture and the pledge of Revenues and other assets made under the Indenture and all covenants, agreements and other obligations of the Issuer under the Indenture will cease, terminate, become void and be completely discharged and satisfied.

Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in the Indenture) to pay or redeem any outstanding Bond (whether upon or prior to its maturity or the redemption date of such Bond), provided that, if such Bond is to be redeemed prior to maturity, notice of such redemption has been given as provided in the Indenture or provision satisfactory to the Trustee has been made for the giving of such notice, then all liability of the Issuer in respect of such Bond will cease, terminate and be completely discharged, and the Owner thereof will thereafter be entitled only to payment from such money or securities deposited with the Trustee for their payment, subject, however, to the provisions of the Indenture.

conformity with the requirements of the Agreement. Any Mortgage Loan with respect to which such documents are deemed to be defective may be returned by the Compliance Agent to be cured if possible. Upon approval by the Compliance Agent of the documents submitted, the Lenders may fund the 2009A-1 Mortgage Loan.

The Lenders may charge an applicant for a Mortgage Loan certain nonrefundable fees. On the Closing Date, the Lenders may collect the following fees from the Mortgagor in connection with 2009A-1 Mortgage Loans, but only to the extent permitted by FHA, VA, USDA-RHS, GNMA, Fannie Mae or Freddie Mac, as applicable: (i) an origination fee not to exceed the amount set forth in the related Release Date Annex, and (ii) any of the following closing costs paid or incurred by the Lender, but only to the

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extent that amounts do not exceed amounts customarily charged in the area in cases where owner-financing is not provided through the use of obligations the interest on which is excluded from gross income for federal income tax purposes and are approved by FHA, VA, USDA-RHS, GNMA, Fannie Mae or Freddie Mac, as applicable: hazard insurance premiums, premiums for a policy of title insurance, premiums for the FHA mortgage insurance or the VA mortgage guaranty or the private mortgage guaranty insurance (to the extent not paid from proceeds of the 2009A-1 Mortgage Loan), appraisal fees, abstract and attorneys’ fees, recording or registration charges, escrow fees, credit report fees, termite report fees, lender processing fees, document preparation fees, inspection fees and similar settlement or financing costs. No other charges or remuneration may be received by the Lender in connection with the origination or closing of a Mortgage Loan for the Program.

The Lender shall maintain current records with respect to the principal amount of 2009A-1 Mortgage Loans for which the Lender has accepted applications, the 2009A-1 Mortgage Loans the Lender anticipates to be funded within the next succeeding 30 days and the principal amount of 2009A-1 Mortgage Loans that have been previously funded. The Master Servicer shall exercise its best judgment to cause the aggregation of 2009A-1 Mortgage Loans to occur to enable the formation of a Mortgage Pool in as expeditious a manner as possible. The Master Servicer may, in its discretion, make the determination to provide for the issuance of Securities at such time, in the judgment of the Master Servicer, as the amount of 2009A-1 Mortgage Loans originated and/or purchased by the Master Servicer is sufficient for the issuance of Securities.

Assumptions of 2009A-1 Mortgage Loans

In any case in which property subject to a Mortgage Loan has been or is about to be conveyed by the Mortgagor, the Master Servicer is authorized, but not required, to release the original Mortgagor and to take or enter into an assumption agreement from or with the person to whom such property has been or is about to be conveyed, but only if the following conditions, among others, are met:

(1) if such approval is required, FHA, USDA-RHS or VA, as applicable, and GNMA, Fannie Mae or Freddie Mac, as applicable, shall have approved such conveyance and the Mortgage shall continue to be insured by FHA, guaranteed by VA or insured by a private mortgage insurer, as applicable;

(2) the requirements of the Agreement pertaining to owner-occupancy, prior ownership, income and acquisition cost which relate to compliance with the Code are met with respect to such assumption, based upon the facts as they exist at the time of the assumption as if the Mortgage were being made for the first time, as such facts are determined in accordance with the Agreement; and

(3) the Compliance Agent has determined that all applicable conditions have been satisfied.

If the Master Servicer determines that property subject to a Mortgage has been conveyed by a Mortgagor and that the above conditions were not satisfied, the Master Servicer shall give notice thereof to the Trustee and the Compliance Agent. If the Master Servicer believes that some action other than foreclosure can be taken so as to enable it to consent to the transfer of the Home and such action is acceptable to GNMA, Fannie Mae or Freddie Mac, as applicable, it shall so advise the Trustee and the Compliance Agent and cause such action to be taken or not, as the case may be, at the direction of the Issuers. If no such action can be taken or if the Master Servicer fails to cause such action to be taken, the Master Servicer shall so advise the Trustee and the Issuers, shall take any and all steps necessary to secure all benefits payable under the FHA Insurance, VA or USDA-RHS, or private mortgage insurance policy guaranty, as applicable, and shall commence foreclosure proceedings in accordance with FHA, VA, USDA-RHS, Fannie Mae or Freddie Mac, as applicable.

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TAX MATTERS

General

In the opinions of Co-Bond Counsel, under existing law, interest on the 2009A-1 Bonds is not includable in gross income of the owners thereof for federal income tax purpose, is not a specific preference item for purposes of the federal alternative minimum tax, is not included in the computation of “adjusted current earnings” for purposes of the federal alternative minimum tax applicable to corporations, and is exempt from Kansas income taxation.

Sections 143 and 146 through 150 of the Code and applicable regulations provide that the interest

an issue of bonds (such as the 2009A-1 Bonds) the proceeds of which are used to provide mortgages on owner-occupied residences, is not includable in gross income of the owners thereof for federal income tax purposes pursuant to section 103(a) of the Code if such bonds are “qualified mortgage bonds”, and, among other requirements, are issued in fully registered form. The term “qualified mortgage bonds” means bonds that are part of an issue that meet the requirements summarized below. Mortgage Eligibility Requirements

Residence Requirements. All the residences for which financing is provided with the proceeds of an issue of qualified mortgage bonds must be located within the jurisdiction of the Issuer and must be single family residences which, at the time of execution or assumption of the respective mortgages, can reasonably be expected to become the principal residences of the respective mortgagors within a reasonable time after the financing is provided.

Prior Homeownership Limitations. At least 95% of the net proceeds of an issue of qualified mortgage bonds must be for mortgagors who did not have a present ownership interest in a principal residence at any time during the three-year period ending on the date of execution of the mortgage. However, this limitation does not apply to loans for “targeted area” residences and loans to Qualified Veterans.

Purchase Price Requirements. Each residence for which financing is provided with the proceeds of an issue of qualified mortgage bonds must have an acquisition cost not exceeding 90% of the average area purchase price. However, in the case of a targeted area residence, the acquisition cannot exceed 110% of the average area purchase price. The applicable regulations permit an issuer to rely upon average area purchase price limitations published by the Internal Revenue Service as safe harbor limitations or to utilize other limitations if the issuer has more accurate and comprehensive data than the safe harbor limitations.

The Maximum Acquisition Cost limits are set forth in the Agreement and are based on limits set forth in revenue procedures published from time to time by the Internal Revenue Service, and other sources.

Income Limitations. Under applicable federal tax law, the maximum family income of the persons who are provided financing under an issuance of qualified mortgage bonds cannot exceed 100% (for families of 2 or less) or 115% (for families of 3 or more) of the greater of the state or local median family income. In the case of any financing provided for targeted area residences in qualified census tracts or areas of chronic economic distress, the maximum family income is unlimited for one-third of the mortgage loans, and the limit for the remaining two-thirds is 120% (for families of 2 or less) or 140% (for families of 3 or more) of the applicable median family income. The maximum family income limits are set forth in the Agreement.

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New Mortgage Requirement. No part of the proceeds of an issue of qualified mortgage bonds may be used to acquire or replace an existing mortgage. All the lendable proceeds of an issue must be used to provide new mortgages to persons who did not have an existing mortgage (whether or not paid off) on the residence at any time prior to the execution of the new mortgage. An exception from the new mortgage requirement is provided for the replacement of construction period loans, bridge loans and other similar temporary initial financing having a term not exceeding 24 months or for qualified subprime loans.

Assumption Requirements. In the event of the assumption of a mortgage financed with the proceeds of a qualified mortgage bond issue, the residence requirements, prior homeownership limitation, purchase price requirements, and income limitations must be satisfied at the time of the assumption as if the loan were being made for the first time.

Volume Cap Limitations. Section 146 of the Code provides that the aggregate amount of “private activity bonds,” including qualified mortgage bonds, issued by an issuer during the calendar year may not exceed the allocated portion of the State’s volume cap. The Issuer has obtained allocation of volume cap in an amount sufficient to permit the issuance of the 2009A-1 Bonds as tax-exempt Bonds.

Arbitrage Requirements

An issue of qualified mortgage bond (such as 2009A-1 Bonds) must satisfy the arbitrage requirements of sections 143 and 148 of the Code. In part, such requirements are as follows: (i) the effective rate of interest on mortgages provided with proceeds of qualified mortgage bonds may not exceed the yield on such bonds by more than 1.125% and, in calculating the effective interest rate on the mortgages, there must be taken into account all amounts borne by the mortgagor either directly or indirectly and (ii) arbitrage earned on nonmortgage investments must be paid to the United States. Compliance with Tax Requirements

Section 143 of the Code and the applicable regulations provide that, with respect to each issue of qualified mortgage bonds, the targeted area requirements and clause (i) of the arbitrage requirements discussed above are met if the issuer attempts in good faith to meet such requirements by taking all reasonable steps to assure compliance and if any failure to meet such requirements is due to inadvertent error. With respect to the mortgage eligibility requirements, section 143 of the Code and the applicable regulations provide that such requirements are met, with respect to each issue of qualified mortgage bonds, if (i) the issuer attempts in good faith to meet such requirements before the mortgages are originated including establishing reasonable procedures and conducting reasonable investigations, (ii) at least 95% of the proceeds of the issue used for mortgages are used for mortgages which meet all of the mortgage eligibility requirements at the time of execution or assumption, and (iii) any failure to meet such requirements is corrected within a reasonable period of time after such failure is discovered or should have been discovered through the exercise of reasonable diligence. Consequently, a failure to satisfy the mortgage eligibility requirements at any time during the term of the 2009A-1 Bonds could result in the interest on such Bonds being includable in gross income for federal tax purposes retroactively to the date of issuance (as determined for federal tax purposes).

Certain procedures and safeguards have been incorporated into the Agreement and the Indenture to ensure compliance with the requirements of section 143 of the Code with respect to the 2009A-1 Bonds. Furthermore, the Issuer, the Servicer, each Participant and the Trustee have each covenanted in the Agreement to follow such procedures toward compliance with such requirements. The Issuer and the Trustee have also made certain representations and covenants relevant to the tax status of interest on the 2009A-1 Bonds in the Indenture and the Agreement.

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Subject to the condition that the parties continuously comply with the above-referenced covenants and in reliance upon certain representations of the Issuer and others in certain certificates and any required verification report, Co-Bond Counsel is of the opinion that, under applicable law, interest on the 2009A-1 Bonds on and after the Release Date will not be includable in gross income of the owners thereof for purposes of federal income taxation, and that interest on the 2009A-1 Bonds will not be a specific preference item for purposes of the federal alternative minimum tax and will not be included in the computation of “adjusted current earnings” for purposes of the federal alternative minimum tax applicable to corporations. Failure to comply with certain of such covenants and representations could cause interest on the 2009A-1 Bonds to become includable in gross income for federal income tax purposes retroactively to the 2009A-1 Release Date (the date of issuance of the 2009A-1 Bonds for federal tax purposes).

In expressing its opinion with respect to the 2009A-1 Bonds, Co-Bond Counsel will rely on certain representations of the Issuer and others as to matters solely within the knowledge of such persons. No independent investigation will be made by Co-Bond Counsel with respect to certain of those matters.

Co-Bond Counsel’s opinions with respect to any issue of Tax-Exempt Bonds is not a guarantee of a result, but represents their legal judgment based upon their review of existing statutes, regulations, published rulings and court decisions and representations and covenants of the Issuer described above. No ruling has been sought from the Internal Revenue Service (the “Service”) with respect to the matters addressed in the opinion of Co-Bond Counsel and such opinion is not binding on the Service. The Service has an ongoing program of auditing the tax-exempt status of the interest on tax-exempt obligations, which may include bonds such as the 2009A-1 Bonds. If an audit of such Bonds is commenced, under current procedures the Service is likely to treat the Issuer as the “taxpayer,” and the owners of the 2009A-1 Bonds would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the interest on the 2009A-1 Bonds, the Issuer may have different or conflicting interests from the owners of such Bonds. Public awareness of any future audit of the 2009A-1 Bonds could adversely affect the value and liquidity of the 2009A-1 Bonds during the pendency of the audit, regardless if its ultimate outcome.

Other Tax Consequences for 2009A-1 Bonds

Prospective purchasers of 2009A-1 Bonds should be aware that: (i) Section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry tax-exempt bonds, in the case of a financial institution (within the meaning of Section 265(b)(5) of the Code), that portion of a holder’s interest expense allocable to interest on the tax-exempt bonds; (ii) with respect to insurance companies subject to the tax imposed by Section 831 of the Code, Section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15% of the sum of certain items, including interest on the tax-exempt bonds; (iii) interest on the tax-exempt bonds earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by Section 884 of the Code; (iv) passive investment income including interest on tax-exempt bonds may be subject to federal income taxation under Section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year if greater than 25% of the gross receipts of such Subchapter S corporation is passive investment income; and (v) Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in determining gross income, receipts or accruals of interest on tax-exempt bonds.

Other Considerations for 2009A-1 Bonds

Future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the 2009A-1 Bonds to be subject, directly or indirectly, to federal income taxation or

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state income taxation, or otherwise prevent 2009A-1 Bondholders from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such future legislative proposals, clarification of the Code or court decisions may also affect the market price for, or marketability of, the affected Bonds. Prospective purchasers of 2009A-1 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Co-Bond Counsel express no opinion.

Sale, Exchange or Retirement of 2009A-1 Bonds

Upon the sale, exchange or retirement (including redemption) of a 2009A-1 Bond, an owner of the 2009A-1 Bond generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the 2009A-1 Bond (other than in respect of accrued and unpaid interest) and such owner’s adjusted tax basis in the 2009A-1 Bond. To the extent the 2009A-1 Bonds are held as a capital asset, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the 2009A-1 Bond has been held for more than 12 months at the time of sale, exchange or retirement.

THE CONTINUING DISCLOSURE AGREEMENT

Definitions

“Annual Bond Disclosure Report” shall mean any Annual Bond Disclosure Report provided by the Issuer pursuant to, and as described in, the Continuing Disclosure Agreement.

“Dissemination Agent” shall mean the Trustee, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Trustee a written acceptance of such designation.

“Listed Events” shall mean any of the events listed below under “Reporting of Significant Events.”

“MSRB” means Municipal Securities Rulemaking Board.

“Participating Underwriter” shall mean any “participating underwriter” within the meaning of the Rule) required to comply with the Rule in connection with offering of the 2009A-1 Bonds.

“Repository” shall mean the MSRB and any other repository as required under the Rule.

“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

Provision of Annual Bond Disclosure

The Issuer shall cause the Dissemination Agent to provide, not later than six months after the end of the Issuer’s fiscal year (which currently ends December 1), commencing with the report for the fiscal year ending December 1, 2010, to each Repository an Annual Bond Disclosure Report with respect to the 2009A-1 Bonds which is consistent with the requirements of the Continuing Disclosure Agreement.

If the Trustee is able to verify that an Annual Bond Disclosure Report with respect to the 2009A-1 Bonds has not been provided to Repositories by the date specified in the preceding paragraph, the Trustee shall promptly send a notice to the MSRB stating that such Annual Bond Disclosure Report

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has not been timely completed and, if known, stating the date by which the Trustee anticipates such Annual Report will be filed.

Content of Annual Bond Disclosure Reports

Each Annual Bond Disclosure Report of the Issuer with respect to the 2009A-1 Bonds shall contain or incorporate by reference the following:

1. If prepared, the audited financial statements for the Issuer for the most recently ended fiscal year, prepared in accordance with generally accepted accounting principles applicable from time to time to the Issuer.

2. Tables setting forth the following information, as of the end of such fiscal year:

a. For each maturity of the 2009A-1 Bonds, the maturity date, the interest rate, the original aggregate principal amount and principal amount remaining Outstanding.

b. During the 2009A-1 Certificate Purchase Period, the total principal amount of 2009A-1 Mortgage Loans to be financed and the total principal amount of 2009A-1 Certificates purchased. This information will not be provided after the 2009A-1 Certificate Purchase Period is completed.

c. The amounts in the funds and accounts securing the 2009A-1 Bonds and a description of the related investments.

d. The aggregate principal amount of each type of 2009A-1 Certificate (i.e., GNMA, Fannie Mae or Freddie Mac) purchased, the aggregate principal balance of each type of 2009A-1 Certificate remaining outstanding, and the aggregate principal balance of 2009A-1 Certificates at each pass-through rate remaining outstanding.

Any or all of the items listed above may be included by specific reference to other documents, including disclosure documents of debt issues of the Issuer or related public entities, which have been submitted to each Repository or the Securities and Exchange Commission. If the document included by reference is a final offering document, it must be available from the MSRB. The Issuer shall clearly identify each such other document so included by reference.

Reporting of Significant Events

Any of the following events with respect to the Bonds shall be considered a Listed Event:

1. Principal and interest payment delinquencies.

2. Non-payment related defaults.

3. Modifications to rights of Bondholders.

4. Optional, contingent or unscheduled Bond calls.

5. Defeasances.

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6. Rating changes.

7. Adverse tax opinions or events adversely affecting the tax exempt status of any Bond (which purports to be tax-exempt).

8. Unscheduled draws on debt service reserves reflecting financial difficulties.

9. Unscheduled draws on credit enhancements reflecting financial difficulties.

10. Substitution of credit or liquidity providers, or their failure to perform.

11. Release, substitution, or sale of property securing repayment of the Bonds.

Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, it shall determine if such event would constitute material information to the Owners of the 2009A-1 Bonds. If the Issuer determines that knowledge of the event would be material, it shall promptly notify the Trustee in writing and shall direct the Dissemination Agent to immediately file a notice of such occurrence with the MSRB.

Termination of Reporting Obligation

The Issuer’s obligations under the Continuing Disclosure Agreement shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds.

Dissemination Agent

The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under the Continuing Disclosure Agreement, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be the Trustee.

Amendment; Waiver

The Issuer and the Trustee may amend the Continuing Disclosure Agreement (and the Trustee shall not unreasonably withhold its consent to any amendment so requested by the Issuer), and any provision of the Continuing Disclosure Agreement may be waived, only upon satisfaction of the applicable provisions of the Continuing Disclosure Agreement.

Additional Information

Nothing in the Continuing Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in the Continuing Disclosure Agreement or any other means of communication, or including any other information in any Annual Bond Disclosure Report or notice of occurrence of a Listed Event, in addition to that which is required by the Continuing Disclosure Agreement. If the Issuer chooses to include any information in any Annual Bond Disclosure Report or notice of occurrence of a Listed Event in addition to that which is specifically required by the Continuing Disclosure Agreement, the Issuer shall have no obligation under the Continuing Disclosure Agreement to update such information or include it in any future Annual Bond Disclosure Report or notice of occurrence of a Listed Event.

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Default

In the event of a failure of the Issuer or the Trustee to comply with any provision of the Continuing Disclosure Agreement, the Trustee may (and, at the request of any Participating Underwriter or the Holders of at least 25% aggregate principal amount of Outstanding Bonds, shall, upon being indemnified or provided in the Continuing Disclosure Agreement), or any Owner or beneficial owner may, take such actions as may be necessary and appropriate to cause the Issuer or Trustee, as the case may be, to comply with its obligations under the Continuing Disclosure Agreement. A default under the Continuing Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under the Continuing Disclosure Agreement in the event of any failure of the Issuer or the Trustee to comply with the Continuing Disclosure Agreement shall be an action to compel performance.

Beneficiaries

The Continuing Disclosure Agreement shall inure solely to the benefit of the Issuer, the Trustee, the Dissemination Agent, the Participating Underwriter and Owners or beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity. UNDER NO CIRCUMSTANCES SHALL THE ISSUER, THE TRUSTEE, OR THE DISSEMINATION AGENT BE LIABLE TO A BONDHOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR IN TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER, THE TRUSTEE, OR THE DISSEMINATION AGENT, RESPECTIVELY UNDER THE CONTINUING DISCLOSURE AGREEMENT, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS AGREEMENT. EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR “MANDAMUS” OR SPECIFIC PERFORMANCE. THE TRUSTEE IS UNDER NO OBLIGATION NOR IS IT REQUIRED TO BRING SUCH AN ACTION.

NO LITIGATION

There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending or, to the knowledge of the Issuer, threatened against the Issuer, which affects the existence of the Issuer or its governing body or the titles of its officers to their respective offices or seeks to prohibit, restrain or enjoin the sale of the 2009A-1 Market Bonds, or the revenues or assets pledged to the payment of the principal of, redemption premium, if any, and interest on the 2009A-1 Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the 2009A-1 Bonds, the Indenture, the Agreement or the Continuing Disclosure Agreement.

LEGAL MATTERS

Certain legal matters relating to the authorization, issuance, sale and delivery of each Series of Bonds will be passed upon by Gilmore & Bell, P.C., Kansas City, Missouri, and Robert J. Perry, Esq., Auburn, Kansas, Co-Bond Counsel. Certain legal matters will be passed upon for the Underwriter by Greenberg Traurig, LLP.

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RATING

It is a condition to the delivery of the 2009A-1 Market Bonds and the release of proceeds of the 2009A-1 Program Bonds that the 2009A-1 Bonds be assigned a rating of “Aaa” by Moody’s Investors Service, Inc. (the “Rating Agency”). No application has or will be made to any other rating agency for a rating on the 2009A-1 Bonds. Such rating reflects only the view of the Rating Agency at the time such rating is given, and the Issuer makes no representation as to the appropriateness of any such rating. An explanation of the significance of a rating may be obtained from the Rating Agency. The Rating Agency has been provided information and materials relating to the 2009A-1 Bonds, including information and materials have not been included in this Official Statement. Generally, rating agencies base their ratings on such information and materials and on investigations, studies and assumptions by the rating agencies. There is no assurance that a rating related to the 2009A-1 Bonds will continue for any given period of time or that such rating will not be revised downward or withdrawn entirely by the Rating Agency, if in the sole judgment of the Rating Agency, circumstances so warrant. Any such downward revision or withdrawal of a rating can be expected to have an adverse effect on the market price of the 2009A-1 Bonds.

UNDERWRITING

The Underwriter will agree to purchase from the Issuers all the 2009A-1 Market Bonds that are issued at the purchase prices shown on the cover page of this Official Statement. The Underwriter will be paid an underwriting fee of $183,000 (excluding the fees and expenses of its counsel of $40,000). A portion of such underwriting fee may be contingent upon delivery of all the 2009A-1 Market Bonds. The 2009A-1 Bonds may be offered and sold to certain dealers, banks and its fees and expenses at prices lower than the initial offering prices stated on the cover page hereof and such initial public offering prices may be changed from time to time by the Underwriter.

[Remainder of Page Intentionally Left Blank]

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MISCELLANEOUS

This Official Statement is submitted in connection with the issuance and delivery of the 2009A-1 Market Bonds and the release of proceeds of the 2009A-1 Program Bonds and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not to be construed as a contract with the purchaser or the Owner of any 2009A-1 Bonds. Any statements herein involving matters of opinion or estimates, whether or not expressly so stated, are intended merely as such and not as representations of fact.

SEDGWICK COUNTY, KANSAS By: /s/ Karl Peterjohn Chairman, Board of County Commissioners SHAWNEE COUNTY, KANSAS By: /s/ Michele A. Buhler

Chairman, Board of County Commissioners

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APPENDIX A

DEFINITIONS

Certain capitalized terms used in this Official Statement and not otherwise defined under “Introduction” or elsewhere herein are set forth below. In some cases such definitions represent a condensed or otherwise modified form of the definition set forth in the Indenture or the Agreement. Reference is made to the Indenture and the Agreement for the complete definitions of such terms.

“Authorized Denominations” means $5,000 and integral multiples thereof and, for purposes of initial issuance and redemption of Program Bonds, $10,000 or any integral multiple of $10,000 in excess thereof.

“Bond” means a Program Bond or a Market Bond.

“Bond Counsel” means nationally recognized bond counsel selected by the Issuer.

“Bond Rating” means the long-term credit rating (without regard to any bond insurance or any other form of credit enhancement on the Bonds) assigned to the Bonds (and any permitted parity debt) by the Rating Agency. If more than one rating agency provides a rating, the “Bond Rating” is the lowest such rating.

“Business Day” means any day other than (a) a Saturday or Sunday, (b) a day on which banking institutions are closed in New York, New York, or in the state in which the principal office or the operations office of the Trustee is located, or (c) a day on which the New York Stock Exchange is closed.

“Certificate” or “MBS” means a GNMA Certificate, a Fannie Mae Certificate or a Freddie Mac Certificate, as applicable.

“Certificate Purchase Period” means, with respect to each Release Date, the period specified in the related Release Date Annex, during which the Servicer can sell Certificates to the Trustee at the Certificate Purchase Price; provided that the last date of each such period may be extended in connection with an extension of the related Nonorigination Redemption Date.

“Certificate Purchase Price” means, with respect to each Release Date, (i) in the case of GNMA Certificates, the percentage of the outstanding principal balance of the Mortgage Loans in the pool backing the applicable Certificate as set forth in the related Release Date Annex, (ii) in the case of Freddie Mac Certificates, the percentage of the outstanding principal balance of the Mortgage Loans in the pool backing the applicable Certificate as set forth in the related Release Date Annex, and (iii) in the case of Fannie Mae Certificates, the percentage of the outstanding principal balance of the Mortgage Loans in the pool backing the applicable Certificate as set forth in the related Release Date Annex. No accrued interest shall be paid at the time of the purchase of a Certificate but shall be paid by the Trustee to the Servicer upon receipt of the first Certificate interest payment by the Trustee.

“Code” means the Internal Revenue Code of 1986, as amended.

“Conventional Mortgage Loan” means a Mortgage Loan other than an FHA Insured Mortgage Loan or a VA Guaranteed Mortgage Loan, in each case which meets the requirements of the Agreement and Fannie Mae.

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“Conversion” or “Converting” or “Converted” means the conversion or the converting of the interest rate on all or a portion of the Pre-Conversion Bonds from a Short-Term Rate to a Permanent Rate as provided herein.

“Conversion Date” means, with respect to all or a portion of Pre Conversion Bonds that are converting to a Permanent Rate, the date two (2) months after the related Release Date; provided that there shall be no more than three (3) Conversion Dates. The Conversion Date for the 2009A-1 Program Bonds is January 18, 2011.

“Converted Bonds” means Program Bonds that have been through the process of Conversion.

“Escrow Fund” means the Escrow Fund which is created under the Indenture as a separate, noncommingled fund in which the Trustee will hold the Pre-Conversion Bond proceeds until the applicable Release Date or until such Pre-Conversion Bonds are redeemed.

“Escrowed Proceeds” means the portion of the proceeds of the Pre-Conversion Bonds that, together with the Shortfall Amount, must be set aside in the Escrow Fund pending the related Release Date.

“Family Income” means, with respect to a person, the “gross monthly income,” multiplied by twelve, of such person and of any other person who is expected to live in the Residence being financed and is liable on the Mortgage, all as determined in accordance with such person’s Program affidavit. For purposes of this definition, “gross monthly income” includes the sum of monthly gross pay, any additional income from overtime, part-time employment, bonuses, dividends, interest, royalties, pensions, VA compensation, and net rental income, etc. and other income (such as alimony, child support, public assistance, sick pay, social security benefits, unemployment compensation, income received from trusts, and income received from business activities or investments).

“Fannie Mae” means the Federal National Mortgage Association, a federally-chartered and stockholder-owned corporation organized and existing under the Federal National Mortgage Association Charter Act, 12 U.S.C. §1716 et seq.

“Fannie Mae Certificate” means a single pool, guaranteed mortgage pass-through mortgage-backed security, bearing interest at the Pass-Through Rate, issued by Fannie Mae in book-entry form, recorded in the name of the Trustee or its nominee, guaranteed as to timely payment of principal and interest by Fannie Mae, maturing no later than December 1, 2041, and backed by qualifying Mortgage Loans in the related pool.

“Financial Advisor” means George K. Baum & Company.

“First Time Homebuyer” means a Mortgagor who has not had an ownership interest in a principal residence at any time during the three-year period prior to the closing of the related Mortgage Loan.

“Four-Week T Bill Rate” means the interest rate for Four-Week Treasury Bills (secondary market) as reported by the Federal Reserve on its website at the following internet address http://www.federalreserve.gov/releases/h15/update/h15upd.htm.

“Freddie Mac” means the Federal Home Loan Mortgage Corporation, a shareholder-owned government-sponsored enterprise organized and existing under the laws of the United States.

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“Freddie Mac Certificate” means a single pool, guaranteed mortgage pass-through Freddie Mac Mortgage-Backed Security, bearing interest at the applicable Pass-Through Rate and having a final payment date not later than December 1, 2041, issued by Freddie Mac in book-entry form, recorded in the name of the Trustee or its nominee, guaranteed as to timely payment of principal and interest by Freddie Mac and backed by qualifying Mortgage Loans in the related pool.

“GNMA” means the Government National Mortgage Association, a government sponsored enterprise organized and existing under the laws of the United States.

“GNMA Certificate” means a fully-modified, mortgage-backed certificate (whether issued as a “GNMA I” or a “GNMA II” Certificate) bearing interest at the applicable Pass-Through Rate, issued by the Servicer, registered in the name of the Trustee, guaranteed as to timely payment of principal and interest by GNMA pursuant to Section 306(g) of Title III of the National Housing Act of 1934, as amended, and the regulations promulgated thereunder, maturing no later than December 1, 2041, and backed by FHA Insured Mortgage Loans or VA Guaranteed Mortgage Loans made by the Lenders.

“Governmental Obligations” means obligations of, or obligations guaranteed as to the full and timely payment of principal and interest by, the United States of America or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States of America.

“GSE” means either Fannie Mae or Freddie Mac or both, collectively, as the context may require.

“Home” means the property being acquired through the borrowing of money pursuant to a Mortgage Loan, consisting of real property and improvements thereon consisting of a single dwelling unit which is owned by a Mortgagor who occupies or indicated that he intends to occupy such unit, including a condominium unit. With the written consent of the Issuers, “Home” may also include a dwelling structure consisting of two-, three-, or four-family dwelling units, one unit of which is to be occupied by the Mortgagor of the units and all of which were first occupied at least five years before the Mortgage with respect to such Home is executed.

“Household Income” means, with respect to a Mortgagor, the Mortgagor’s family’s annualized gross income, which is the Mortgagor’s family’s gross monthly income multiplied by 12. Gross monthly income is the sum of monthly gross pay; any additional income from sources including but not limited to overtime, part-time employment, bonuses, dividends, interest, royalties, pensions, Veterans Administration (VA) compensation and net rental income; and other income (such as alimony, child support, public assistance, sick pay, social security benefits, unemployment compensation, income received from trusts, and income received from business activities or investments).

“Interest Payment Date” means, with respect to Pre-Conversion Bonds, each Release Date (but such Release Date shall be an Interest Payment Date only for that portion of Pre-Conversion Bonds with respect to which Escrowed Proceeds are subject to release on such date), each Conversion Date (but such Conversion Date shall be an Interest Payment Date only with respect to those Pre-Conversion Bonds which are to become, as of such date, Converted Bonds), and each redemption date. Interest Payment Dates for each Converted Bond and each Market Bond shall be the dates set forth in the related Release Date Annex. For the 2009A-1 Market Bonds, Interest Payment Date means each June 1 and December 1, commencing June 1, 2011. For the 2009A-1 Program Bonds, Interest Payment Date means (i) the related Conversion Date, and (ii) each June 1 and December 1 thereafter, commencing June 1, 2011.

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“Investment Securities” means any of the following which at the time of investment are legal investments under the laws of the State for moneys held under the Indenture and then proposed to be invested:

(i) prior to a Release Date, with respect to the related Escrowed Proceeds, Permitted Escrow Investments, and

(ii) on and after a Release Date, with respect to the moneys in the related Accounts of the applicable Funds;

(a) Governmental Obligations;

(b) Federal Housing Administration debentures which must not be redeemable prior to their stated maturity;

(c) obligations of the Farm Credit System;

(d) obligations of Federal Home Loan Banks;

(e) certificates of deposit having a stated maturity of 90 days or fewer from the date of its issuance, that are issued by a state or national bank domiciled in the State (including those of the Trustee) or a savings and loan association domiciled in the State, provided that such certificate of deposit is fully insured by the Federal Deposit Insurance Corporation or its successor and that such banking institution is rated not less than P-1 by the Rating Agency;

(f) bankers’ acceptance which (i) have a stated maturity of 90 days or fewer from the date of its issuance, (ii) will be, in accordance with their terms, liquidated in full at maturity, (iii) are eligible collateral for borrowing from a Federal Reserve Bank, and (iv) are issued by a bank organized and existing under the laws of the United States or of any state, if the short-term obligations of the bank, or of a bank holding company of which the bank is the largest subsidiary, are rated not less than P-1 by the Rating Agency;

(g) deposits which are fully insured by the Federal Deposit Insurance Corporation (“FDIC”); provided that such deposits are with a banking institution rated not less than P-1 by the Rating Agency;

(h) commercial paper which (i) has a stated maturity of 90 days or fewer from the date of its issuance and (ii) is rated not less than P-1 by the Rating Agency;

(i) U.S. Treasury STRIPS, REFCORP STRIPS (stripped by the Federal Reserve Bank of New York), and any stripped securities assessed or rated in the highest applicable rating category by the Rating Agency at the time of such purchase;

(j) a money market fund of the Trustee or its affiliates that is rated by the Rating Agency in its highest rating category; and

(k) any other investment which in Counsel’s Opinion is at the time permitted by then applicable law for the investment of the Issuer’s funds and to the extent such investments are rated by a Rating Agency in its highest rating category.

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“Issuer” means, jointly, Sedgwick County, Kansas, and Shawnee County, Kansas, political subdivisions of the State, and their respective successor and assigns.

“Issuer’s Program Area” means the unincorporated areas of Sedgwick and Shawnee Counties, Kansas, and any unincorporated areas of any county in Kansas and incorporated areas of any city in Kansas which enter into a cooperation agreement with one or both of the Issuers.

“Market Bond Ratio Requirement” means the requirement that the Issuer issue and deliver Market Bonds in conjunction with and as a condition to each Release Date, the principal amount of such Market Bonds being not less than 2/3rds of the principal amount of Pre-Conversion Bonds the proceeds of which are proposed to be released on such Release Date.

“Market Bonds” means serial bonds and/or term bonds sold by the Issuer to public or private investors in accordance with standard bond underwriting practices and that are issued under the Indenture in order to satisfy the conditions to the release of proceeds of some or all of the Program Bonds

“Maximum Family Income” means the applicable amount set forth in the Agreement, which shall be effective until the Lenders receive an announcement from the Servicer of revised Maximum Family Income limits (such announcement to be given promptly following the Servicer’s receipt of such information from the Issuer or Bond Counsel).

“Mortgage” means the instrument, including the Mortgage Rider and deed of trust, securing a Mortgage Loan that creates a first lien on a Residence subject to Permitted Encumbrances, and that shall be in form acceptable to FHA, VA, USDA-RHS, Fannie Mae or Freddie Mac, as applicable.

“Mortgage Loan” means a mortgage loan to an Eligible Borrower evidenced by a Mortgage Note secured by a related Mortgage on a Residence located in the Issuer’s Program Area, satisfying the terms of the Agreement.

“Mortgage Loan Rate” means, with respect to each Release Date, the applicable interest rate or rates on the related Mortgage Loans, including any permitted increases or decreases to such rate or rates, as set forth in the related Release Date Annex.

“Mortgagor” means any person who has a present ownership interest in the Residence and is the obligor on a Mortgage Note, or a subsequent owner of a Residence who has assumed the Mortgage in accordance with the Agreement (but does not include a person who is liable on the Mortgage Note solely as a guarantor or cosignor, who does not have a present ownership interest in the Residence).

“Nonorigination Redemption Date” means, with respect to each Release Date, the date specified in the related Release Date Annex on which Bonds are redeemed from unspent moneys in the related Account of the Program Fund.

“Non-Targeted Area Mortgage Loan” means a Mortgage Loan that provides financing for the acquisition of a Residence that is in a Non-Targeted Area.

“Notice Parties” means the Administrator, Fannie Mae, Freddie Mac and Treasury’s Financial Agent.

“Origination Period” means, with respect to each Release Date, the period during which related Mortgage Loans may be purchased by the Servicer from the Lenders as set forth in the related Release

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Date Annex; provided that the last date of such period may be extended in connection with an extension of the related Nonorigination Redemption Date.

“Owner” means the person in whose name a Bond is registered on the registration books maintained by the Trustee.

“Participant” means a mortgage lending institution executing the Agreement.

“Pass-Through Rate” means the interest rate accruing each month on a Certificate specified with respect to each Release Date in the related Release Date Annex, which will equal the Mortgage Loan Rate of the Mortgage Loans backing the Certificate less the Servicing Fee.

“Permanent Rate” means an interest rate per annum certified to the Trustee by the Special Permanent Rate Advisor on or prior to the Release Date, which shall be equal to the sum of (i) 3.32% plus (ii) the Spread.

“Permanent Rate Calculation Date” means the date on which the Permanent Rate is calculated with respect to all or a portion of the Program Bonds, which shall be, with respect to each applicable portion of the Pre-Conversion Bonds, a date acceptable to the GSEs selected by the Issuer on or prior to December 31, 2010 by delivery of a Market Bond Ratio Compliance Certificate as provided in the Indenture.

“Permitted Escrow Investments” means the investments represented by and provided pursuant to that certain Global Escrow Agreement by and among the GSEs, the Trustee and U.S. Bank National Association, as escrow agent, or such other investments as shall be permitted under the Indenture.

“Pre-Conversion Bonds” means Program Bonds for which the interest rate has not been the subject of a Conversion.

“Prepayments” means principal payments in addition to regularly scheduled principal payments on the Certificates.

“Program” means the Housing Finance Agency Initiative announced by the United States Treasury Department on October 19, 2009.

“Program Bonds” means the Bonds authorized to be issued pursuant to Indenture as “Program Bonds” and includes Pre-Conversion Bonds and Converted Bonds.

“Program Expenses” means the fees and expenses payable to the Trustee, the Rebate Analyst and the Issuer, and any other person, as set forth in the Indenture.

“Qualified Veteran” means a person who is a “veteran” (as defined in 38 U.S.C. Section 101) who has not previously obtained a loan financed by single family mortgage revenue bonds utilizing the veteran’s exception to the 3-year requirement set forth in Section 143(d)(2)(D) of the Code.

“Rating Agency” means Moody’s Investors Service, Inc., its successors and assigns, or any other national rating agency which has assigned and is maintaining a credit rating on the Bonds.

“Rebate Amount” means an amount required to be rebated to the United States Government, as determined under Code Section 148 and Treasury Regulation Section 1.148-3.

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“Rebate Analyst” means initially Gilmore & Bell, P.C., or its successors or assigns.

“Record Date” means the close of business on the 25th day of the month preceding each Interest Payment Date, whether or not such 25th day is a Business Day.

“Release Date” means such date or dates (not to exceed three dates) on or prior to December 31, 2010 and which dates are acceptable to the GSEs, on which dates the requirements of the Indenture are satisfied, including, without limitation, delivery of a Market Bond Ratio Compliance Certificate (as set forth in the Indenture).

“Release Date Annex” means the written document provided by the Issuer to the Trustee setting forth various terms relating to each Release Date, including, but not limited to, the related Release Date, Conversion Date, Permanent Date, Interest Payment Dates, sinking fund amounts and dates (if applicable), Origination Period, Certificate Purchase Period and Nonorigination Redemption Date.

“Revenues” means all income, revenues, proceeds and other amounts received by the Trustee from or on behalf of the Issuer, including all amounts received in connection with the Certificates, and any and all interest, profits or other income derived from the investment of amounts in any Fund (except the Rebate Amounts and amounts in the Cost of Issuance Fund) established pursuant to the Indenture.

“Servicer” means U.S. Bank National Association.

“Settlement Date” means December 23, 2009, the date of issuance of the 2009A Program Bonds.

“Shortfall Amount” means the difference, as of the Settlement Date, between the proceeds of the Program Bonds to be received on such Settlement Date and the initial principal amount of such Program Bonds.

“Short-Term Rate” means, (i) for the period from the Settlement Date to the applicable Release Date, the interest rate which produces an interest payment on such Release Date relative to the Program Bonds with respect to which Escrowed Proceeds are subject to release on such Release Date equal to Investment Earnings and (ii) from the Release Date to the Conversion Date, an interest rate equal to the sum of the Spread plus the lesser of (A) the Four Week T-Bill Rate as of the Business Day prior to the Release Date or (B) the Permanent Rate less the Spread. For purposes of this provision, “Investment Earnings” means total investment earnings on the portion of the Escrow Fund related to Program Bonds with respect to which a Release Date is occurring.

“Special Permanent Rate Advisor” means State Street Bank and Trust Company, and any successor or assign designated by Treasury.

“Spread” means additional per annum interest on the Program Bonds based upon the lowest Bond Rating effective as of the Permanent Rate Calculation Date to the Program Bonds under the Complete Indenture by the rating agencies rating the Program Bonds, as follows:

Rating Additional Spread

‘Aaa’/‘AAA’ 60 bps ‘Aa’/‘AA’ 75 bps

‘A’ 110 bps ‘Baa’/‘BBB’ 225 bps

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“Targeted Area” means the census tracts in the State of Kansas, identified in the Agreement.

“Targeted Area Mortgage Loan” means a Mortgage Loan originated in a Targeted Area.

“Treasury’s Financial Agent” means JPMorgan Chase Bank, N.A., as Treasury’s financial agent, or such other party as Treasury may appoint for such purpose from time to time.

“Underwriter” means George K. Baum & Company.

“2009A-1 Bond” mean a 2009A-1 Market Bond or a 2009A-1 Program Bond.

“2009A-1 Certificate” means a Certificate backed by 2009A-1 Mortgage Loans.

“2009A-1 Certificate Purchase Period” means the period from the 2009A-1 Release Date to December 15, 2010, subject to extension upon satisfaction of the conditions of the Indenture and the Agreement.

“2009A-1 Final Bond Amount Determination Date” means the date on which the final principal amounts of the 2009A-1 Market Bonds and the 2009A-1 Program Bonds is determined.

“2009A-1 Market Bond” means a Market Bond issued under the Indenture on the 2009A-1 Release Date.

“2009A-1 Mortgage Loan” means a Mortgage Loan originated in accordance with the Agreement under the Issuer’s Program and financed by the 2009A-1 Bonds.

“2009A-1 Nonorigination Redemption Date” means January 1, 2011, subject to extension upon satisfaction of the conditions of the Indenture.

“2009A-1 Origination Period” means the period from July 23, 2010 to October 15, 2010, subject to extension upon satisfaction of the conditions of the Indenture.

“2009A-1 Permanent Rate Calculation Date” means the date on which the Permanent Rate for the 2009A-1 Program Bonds is established.

“2009A-1 Program Bond” means a Program Bond the proceeds of which are released on the 2009A-1 Release Date.

“2009A-1 Release Date” means November 18, 2010, the Release Date relating to the 2009A-1 Bonds.

“2009A-1 Release Date Annex” means the Release Date Annex delivered with respect to the 2009A-1 Bonds.

“2009A-1 Surplus Revenues” means the surplus revenues relating to the 2009A-1 Bonds.

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APPENDIX B

BOOK-ENTRY ONLY SYSTEM

The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the 2009A-1 Bonds (for purposes of this Appendix B, the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for the Bonds, in the aggregate principal amount of the Bond maturity amount, and will be deposited with DTC.

DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org

Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.

To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial

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ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds and distributions on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detailed information from the Issuer or Trustee, on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, nor its nominee, Trustee, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds and distributions to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as securities depository with respect to the Securities at any time by giving reasonable notice to the Issuer or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, Security certificates are required to be printed and delivered.

The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered.

The foregoing information regarding the book-entry only system has been provided by DTC. Accordingly, the Issuer and the Financial Advisor are making not any representation concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be. There can be no assurance that DTC or the DTC Participants will abide by the procedures described herein or that such procedures will not be changed from time to time. In the event a successor securities depository is designated, it may establish different procedures.

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APPENDIX C

FORM OF CO-BOND COUNSEL OPINION

November __, 2010

Sedgwick County, Kansas County Courthouse Wichita, Kansas

Fannie Mae 3900 Wisconsin Avenue, N.W. Washington, D.C.

Shawnee County, Kansas County Courthouse Topeka, Kansas

Freddie Mac 1551 Park Run Drive McLean, Virginia

UMB Bank, N.A., as Trustee Kansas City, Missouri

Re: $_________ Sedgwick County, Kansas and Shawnee County, Kansas Single Family Mortgage Revenue Bonds, Series 2009A-1 (Non-AMT) (Market Bonds)

$__________Sedgwick County, Kansas and Shawnee County, Kansas Single Family Mortgage Revenue Bonds, Series 2009A-1 (Non-AMT) (Program Bonds)

Ladies and Gentlemen:

WE HEREBY CERTIFY that we have acted as Co-Bond Counsel in connection with the authorization and issuance by Sedgwick County, Kansas, and Shawnee County, Kansas (each an “Issuer,” and collectively, the “Issuers”) of the Issuer’s Single Family Mortgage Revenue Bonds, Series 2009A-1 (Non-AMT) (Market Bonds) (the “2009A-1 Market Bonds”) and the release from escrow of bond proceeds relating to a portion of the Issuers’ Single Family Mortgage Revenue Bonds, Series 2009A (Non-AMT) (Program Bonds) (the “2009A Program Bonds”) on the date hereof (the 2009A-1 Release Date”) (the released portion of the 2009A Program Bonds being designated herein as the “2009A-1 Program Bonds,” and, collectively with the 2009A-1 Market Bonds, the “2009A-1 Bonds”).

On December 23, 2009, the Issuers issued $120,000,000 principal amount of the 2009A Program Bonds pursuant to the Constitution and statutes of the State of Kansas, particularly K.S.A. 12-5219 et seq., as amended (the “Act”), a Resolution duly adopted by the governing body of each Issuer and the Trust Indenture dated as of December 1, 2009 (the “Trust Indenture”), between the Issuers and UMB Bank, N.A., Kansas City, Missouri (the “Trustee”). Proceeds of the 2009A Program Bonds were deposited in the Escrow Fund, subject to release upon satisfaction of the conditions for release set forth in the Trust Indenture. Pursuant to the Trust Indenture, the Issuers have elected to release $________ principal amount of proceeds of the 2009A Program Bonds from the Escrow Fund. Upon such release and in accordance with the Trust Indenture and the 2009A-1 Release Date Annex (the “2009A-1 Release Date Annex,” together with the Trust Indenture, the “Indenture”), $_________ principal amount of the 2009A Program Bonds will be re-designated as the 2009A-1 Program Bonds.

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In the capacity of Co-Bond Counsel, we have participated in the preparation of, and have examined a certified transcript of, proceedings relating to the authorization and issuance of the 2009A-1 Bonds.

Based upon such examination, we are of the opinion, as of the date hereof, that:

1. The Issuers, pursuant to the Act, have the power and authority to adopt the Resolutions and to perform their respective obligations thereunder; to execute and deliver the Indenture, the Origination and Servicing Agreement and the Compliance Agreement, and to perform their obligations thereunder; to issue and deliver the 2009A-1 Market Bonds, release from the Escrow Fund the 2009A-1 Program Bonds and apply the proceeds thereof in the manner and for the purposes set forth in the Indenture, and the Origination and Servicing Agreement.

2. The Resolutions have been duly adopted by the Issuers and the Indenture has been duly entered into by the Issuers and constitute valid and binding obligations of the Issuers enforceable upon the Issuers in accordance with its terms.

3. The Issuers have duly authorized the issuance, execution and delivery of the 2009A-1 Market Bonds and the release of proceeds relating to the 2009A-1 Program Bonds, and the 2009A-1 Bonds have been duly issued, executed and delivered. The 2009A-1 Bonds constitute legal, valid and binding obligations of the Issuers as provided in the Resolutions and the Indenture, payable in accordance with their terms, and the owners thereof are entitled to the benefit and security of the Indenture.

4. The 2009A-1 Bonds, together with the interest thereon, are limited obligations of the Issuers payable solely from, and are entitled to the benefit of a valid lien against, the revenues and funds pledged under the Indenture. Neither the 2009A-1 Bonds nor any of the Issuers’ agreements or obligations under the Indenture or the Origination and Servicing Agreement shall be a debt of the State of Kansas or any political subdivision thereof. The 2009A-1 Bonds are not payable in any manner by taxation.

5. Under existing law, the interest on the 2009A-1 Bonds is excludable from gross income for federal income tax purposes. Interest on the 2009A-1 Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, and is not includable in the computation of “adjusted current earnings” for corporations in computing their alternative minimum taxable income. In addition to the foregoing exceptions, the opinion set forth in the first sentence of this paragraph is subject to the condition that the Issuers and the Trustee comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the issuance of the 2009A-1 Bonds in order that interest thereon be (or continue to be) excludable from gross income for federal income tax purposes. The Issuers and, in certain cases, the Trustee have covenanted to comply with such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the 2009A-1 Bonds in federal gross income retroactive to the date hereof. We express no opinion regarding other federal tax consequences arising with respect to the 2009A-1 Bonds.

6. Interest on the 2009A-1 is exempt from Kansas income taxation.

Owners of the 2009A-1 Bonds should consult their own tax advisors with respect to other federal, state and local tax consequences of owning the 2009A-1 Bonds.

It is to be understood that the rights of the holders of the 2009A-1 Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws

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affecting creditors’ rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases.

Very truly yours,

D-1

APPENDIX D

TABLE OF OUTSTANDING BOND AMOUNTS

Date Outstanding Bond Amount for Premium PAC Bonds

Outstanding Bond Amount for Non-Premium PAC 2009A-1 Market Bonds

11/18/2010 $4,000,000 $8,000,000 12/1/2010 4,000,000 8,000,000

1/1/2011 4,000,000 7,995,000 2/1/2011 4,000,000 7,975,000 3/1/2011 3,990,000 7,965,000 4/1/2011 3,985,000 7,935,000 5/1/2011 3,980,000 7,900,000 6/1/2011 3,970,000 7,670,000 7/1/2011 3,950,000 7,635,000 8/1/2011 3,940,000 7,575,000 9/1/2011 3,930,000 7,515,000

10/1/2011 3,915,000 7,445,000 11/1/2011 3,890,000 7,385,000 12/1/2011 3,875,000 7,060,000

1/1/2012 3,845,000 6,985,000 2/1/2012 3,825,000 6,890,000 3/1/2012 3,800,000 6,800,000 4/1/2012 3,780,000 6,695,000 5/1/2012 3,750,000 6,600,000 6/1/2012 3,725,000 6,245,000 7/1/2012 3,695,000 6,135,000 8/1/2012 3,670,000 6,010,000 9/1/2012 3,640,000 5,890,000

10/1/2012 3,610,000 5,755,000 11/1/2012 3,575,000 5,630,000 12/1/2012 3,545,000 5,270,000

1/1/2013 3,505,000 5,135,000 2/1/2013 3,470,000 4,990,000 3/1/2013 3,425,000 4,855,000 4/1/2013 3,390,000 4,700,000 5/1/2013 3,350,000 4,555,000 6/1/2013 3,310,000 4,210,000 7/1/2013 3,255,000 4,080,000 8/1/2013 3,215,000 3,935,000 9/1/2013 3,170,000 3,805,000

10/1/2013 3,130,000 3,665,000 11/1/2013 3,085,000 3,545,000 12/1/2013 3,045,000 3,260,000

1/1/2014 3,005,000 3,140,000 2/1/2014 2,965,000 3,015,000 3/1/2014 2,925,000 2,905,000 4/1/2014 2,885,000 2,790,000 5/1/2014 2,845,000 2,685,000 6/1/2014 2,810,000 2,440,000 7/1/2014 2,770,000 2,340,000

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APPENDIX D

TABLE OF OUTSTANDING BOND AMOUNTS (continued)



8/1/2014 $2,735,000 $2,235,000 9/1/2014 2,690,000 2,150,000

10/1/2014 2,650,000 2,060,000 11/1/2014 2,605,000 1,980,000 12/1/2014 2,570,000 1,775,000

1/1/2015 2,530,000 1,695,000 2/1/2015 2,495,000 1,605,000 3/1/2015 2,450,000 1,540,000 4/1/2015 2,415,000 1,455,000 5/1/2015 2,375,000 1,390,000 6/1/2015 2,340,000 1,225,000

7/01/15 2,295,000 1,165,000 8/01/15 2,260,000 1,100,000 9/01/15 2,220,000 1,040,000

10/01/15 2,185,000 975,000 11/01/15 2,145,000 925,000 12/01/15 2,040,000 825,000

1/01/16 1,995,000 780,000 2/01/16 1,960,000 725,000 3/01/16 1,920,000 680,000 4/01/16 1,885,000 630,000 5/01/16 1,850,000 585,000 6/01/16 1,740,000 525,000 7/01/16 1,695,000 490,000 8/01/16 1,665,000 435,000 9/01/16 1,630,000 400,000

10/01/16 1,595,000 355,000 11/01/16 1,560,000 320,000 12/01/16 1,465,000 265,000

1/01/17 1,425,000 235,000 2/01/17 1,395,000 195,000 3/01/17 1,360,000 170,000 4/01/17 1,330,000 135,000 5/01/17 1,290,000 115,000 6/01/17 1,200,000 75,000 7/01/17 1,155,000 60,000 8/01/17 1,125,000 25,000 9/01/17 1,090,000 5,000

10/01/17 1,060,000 0 11/01/17 1,020,000 0 12/01/17 940,000 0

1/01/18 900,000 0 2/01/18 870,000 0

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APPENDIX D

TABLE OF OUTSTANDING BOND AMOUNTS (continued)



3/01/18 $830,000 $0 4/01/18 800,000 0 5/01/18 770,000 0 6/01/18 690,000 0 7/01/18 650,000 0 8/01/18 620,000 0 9/01/18 585,000 0

10/01/18 555,000 0 11/01/18 515,000 0 12/01/18 445,000 0

1/01/19 405,000 0 2/01/19 380,000 0 3/01/19 340,000 0 4/01/19 315,000 0 5/01/19 280,000 0 6/01/19 220,000 0 7/01/19 190,000 0 8/01/19 165,000 0 9/01/19 135,000 0

10/01/19 105,000 0 11/01/19 75,000 0 12/01/19 20,000 0

1/01/20 and thereafter 0

0