FIRST HORIZON ASSET SECURITIES INC. MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2007-AR2 TERMS AGREEMENT (to Underwriting Agreement, dated March 24, 2006 among the Company, First Horizon Home Loan Corporation and the Underwriter)

EXECUTION

FIRST HORIZON ASSET SECURITIES INC.

MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2007-AR2

TERMS AGREEMENT
(to Underwriting Agreement,
dated March 24, 2006
among the Company, First Horizon
Home Loan Corporation
and the Underwriter)

First Horizon Asset Securities Inc.		▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ Horizon Way		June 22, 2007
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

Banc of America Securities LLC (the “Underwriter”) agrees, subject to the terms and provisions herein and of the captioned Underwriting Agreement (the “Underwriting Agreement”), to purchase such Classes of Series 2007-AR2 Certificates specified in Section 2(a) hereof (the “Offered Certificates”). This letter supplements and modifies the Underwriting Agreement solely as it relates to the purchase and sale of the Offered Certificates described below. The Series 2007-AR2 Certificates are registered with the Securities and Exchange Commission by means of an effective Registration Statement (No. 333-143015). Capitalized terms used and not defined herein have the meanings given them in the Underwriting Agreement.

          Section 1.      The Mortgage Pools: The Series 2007-AR2 Certificates shall evidence the entire beneficial ownership interest in three mortgage pools (collectively, the “Mortgage Pools”) of primarily 30-year adjustable rate, first lien, fully amortizing one- to four-family residential mortgage loans (the “Mortgage Loans”) having the following characteristics as of June 1, 2007 (the “Cut-off Date”):

(a)       Aggregate Principal Amount of the Mortgage Pools: Approximately $424,306,758 aggregate principal balance as of the Cut-off Date, subject to an upward or downward variance of up to 5%, the precise aggregate principal balance to be determined by the Company.           (b)       Original Terms to Maturity: The original term to maturity of each Mortgage Loan included in Mortgage Pools shall be 360 months.

          Section 2.      The Certificates: The Offered Certificates shall be issued as follows:

(a)      Classes: The Offered Certificates shall be issued with the following Class designations, interest rates and principal balances, subject in the

 

 

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aggregate to the variance referred to in Section 1(a) and, as to any particular Class, to an upward or downward variance of up to 5%:

 

Class		Class Principal Balance			Interest Rate		Class Purchase Price Percentage		Required Ratings
									Fitch		S&P
Class B-1		$	5,728,000.00		Variable(1)		99.708400000%		AA		N/A
Class B-2		$	2,545,000.00		Variable(1)		98.551600000%		A		N/A
Class B-3		$	1,698,000.00		Variable(1)		95.608000000%		BBB		N/A

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(1)	The interest rates for these classes of Certificates are variable and will be calculated as described in the Prospectus.

	(b)      The Offered Certificates shall have such other characteristics as described in the related Prospectus.

The Underwriter agrees, subject to the terms and conditions contained herein and in the Underwriting Agreement, to purchase the principal balances of the Classes of Certificates specified opposite its name below:

Series 2007-AR2 Designation
	Banc of America Securities LLC ($)
Class B-1	$5,728,000.00
Class B-2	$2,545,000.00
Class B-3	$1,698,000.00

          Section 3.      Purchase Price: The Purchase Price for each Class of the Offered Certificates shall be the Class Purchase Price Percentage therefor (as set forth in Section 2(a) above) of the initial Class Principal Balance thereof plus accrued interest at the applicable per annum Pass-Through Rate set forth in 2(a) above from and including the Cut-off Date up to, but not including, June 29, 2007 (the “Closing Date”).

          Section 4.      Required Ratings: The Offered Certificates shall have received at least the Required Ratings from Fitch, Inc. (“Fitch”) and Standard & Poor’s, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. (“S&P”) set forth in the table in Section 2(a).

          Section 5.      Tax Treatment: One or more elections will be made to treat the assets of the Trust Fund as a REMIC.

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          Section 6.      Acknowledgment of Merger: The Underwriter hereby acknowledges that, effective May 31, 2007, First Horizon Home Loan Corporation merged with and into First Tennessee Bank National Association. All references in the Underwriting Agreement to First Horizon Home Loan Corporation shall be deemed to refer to First Horizon Home Loans, a division of First Tennessee Bank National Association, as successor by merger to First Horizon Home Loan Corporation.

 

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          If the foregoing is in accordance with your understanding of our agreement, please sign and return to the undersigned a counterpart hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Underwriter, First Horizon Home Loans, a division of First Tennessee Bank National Association, and the Company

				Very truly yours,
				BANC OF AMERICA SECURITIES LLC
				By:
					Name:
					Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
FIRST HORIZON ASSET SECURITIES INC.
By:
	Name:	▇▇▇▇▇▇ ▇▇▇▇▇
	Title:	Vice President
FIRST HORIZON HOME LOANS, a division of
First Tennessee Bank National Association
By:
	Name:	▇▇▇▇▇ ▇. ▇▇▇▇▇
	Title:	Executive Vice President

 

228014 FHASI 2007-AR2 BofA Underwriting Terms Agreement

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