Homeownership: This is Possible® by Bell Bank Mortgage

Homeownership: This is Possible®! Speakers Mia Jones – Freddie Mac Toumie Parrot -- THDA Kasey Kier – Bell Bank Mortgage Steve Richman – Wine & Wisdom

Welcome!

Mia Jones Freddie Mac Affordable Lending Manager Single-Family, Mission and Community Engagement

Connecting the Dots Between Borrowers of the Future and Business Solutions

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Today’s Speakers

Mia Jones Affordable Lending Manger Mia facilitates and delivers sustainable lending opportunities and access to credit for low- to moderate-income buyers and families in underserved market areas.

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About Freddie Mac

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Making Home Possible for 53 Years •

Freddie Mac was chartered by Congress in 1970 and operates in the Secondary Mortgage Market

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Mission to promote liquidity, stability, affordability and equality in housing – nationwide, in all economic conditions

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Community mission

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Stabilize communities

Prevent foreclosures

Expand credit responsibly

Educate future homebuyers and counsel homeowners

Support affordable rental housing

Three main business lines o

Single-Family (1- to 4-unit for-sale properties)

Multifamily (5+-unit for-rent properties)

Capital Markets

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The Affordable Ecosystem

It takes many hands to make home possible. Partnership and collaboration across the affordable ecosystem are critical to drive both business opportunities and making the dream of home a reality for families.

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Local governments

Loan officers

Real estate professionals

Mortgage & banking executives

State governments

Builders & developers

Housing counselors

Non-profit organizations

Housing finance agencies

Appraisers

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State of Homeownership in Communities of Color Barriers and Needs

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Highlights of Changing Demographics

Black Homebuyers

Expected to account for 2M of the nation’s 13.6M new households between 2015 and 2025

Are more likely to be younger and more likely to be singles compared to Whites Are more likely to have lower income (both dollar amount and growth rate) and lower education level compared to Whites Are 50% more likely than Whites to obtain new mortgages post financial crisis, primarily due to lower credit profiles (lower credit scores, higher delinquencies) compared to Whites There is a lot of heterogeneity in the challenges and barriers faced by Black renters across the nation depending on where they reside. For example, for Black renters residing in the state of New York affordability and down payment needs are biggest barriers for homeownership. On the other hand, for Black renters residing in state of Texas, access to credit is the biggest barrier to homeownership. Hence White-Black homeownership gap is a national issue that requires both national and local policy considerations Sources: Freddie Mac calculations using anonymized credit bureau data for Sep 2018; U.S. Census Bureau, Current Population Survey/Housing Vacancy Survey, April 25, 2019; Freddie Mac calculations using anonymized credit bureau data; Freddie Mac calculations at the CBSA-level using anonymized credit bureau data and Freddie Mac Home Value Explorer data for Sep 2018. Note: According to NAR’s methodology, if a consumer’s quarterly household income is greater than or equal to the annual mortgage payment on a median priced house then that house is affordable for him. DATA SENSITIVITY CLASSIFICATION LABEL

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Racial Gaps in Homeownership Rates Introduction

Source: Homeownership rate calculated using American Community Survey of 2021 estimates www.ipums.org. Low-income levels refers to family income <= 80% AMI, middle-income refers to family income between 80% to 140% AMI and high-income refers to family income > 140% AMI. Homeownership rate calculated as number of homes that are owner-occupied divided by total number of occupied households. Non-Public

Single Family

Explaining theWhite-Black White-Black Explaining the homeownership gap homeownership gap Factors Explaining White-Black Gap In Transition Rate (Percent Contribution)

45%

11% 6%

Racial differences in credit attributes contribute the most in explaining the racial gap in transition rates.

11% 3%

-21% Individual Household demographics composition

Income growth

Education

Credit profiles

Severe derogatory credit

Mortgage Inquiry

Geography

https://sf.freddiemac.com/articles/insights/better-understanding-of-credit-can-help-close-racial-homeownership-gaps

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Better Understanding of Credit Can Help Close Racial Homeownership Gaps

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Highlights of Changing Demographics Hispanic Homebuyers

Expected to lead new household formations at 53.1% over the next 20 years.

In 2022, the Hispanic homeownership rate increased to 48.6 percent, up from 47.5 in 2019. Latinos added a total of 349,000 owner households in 2022.

While Latinos accounted for most of the homeownership growth between 2011 and 2017, the share of new homeowners attributed to Latinos decreased from its peak of 68% in 2015 to just 24.4% in 2022. Latinos were responsible for more than half (51%) of the nation's population growth over the past 10 years. Latinos are concentrated in areas experiencing the most severe housing inventory and affordability challenges in the country. Florida (22.7%) and South Carolina (18.4%) experienced the highest home appreciation in 2022, pricing out many would-be first-time homebuyers. In 2022, 33% of Latino adults aged 45 and under were mortgage ready. DATA SENSITIVITY CLASSIFICATION LABEL

Source: NAHREP 2022 State of Hispanic Homeownership Report

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Down Payment is the Top Homeownership Barrier for Renters Ages 25-45, and Few are Aware of Assistance Options 2020 FTHB Millennial Down payment % Distribution

67% of renters (ages 25-45) perceive down payment as the biggest barrier to homeownership

15%

Familiarity with •

Down payment assistance programs

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Different type of mortgage products

30%

15%

33% 0-5%

Believe that they are required to put a 20% 42% down payment on a home… or … they were unsure DATA SENSITIVITY CLASSIFICATION LABEL

47%

22%

6-10%

11-20%

20+%

2020 Median Down Payment 12% for all homebuyers 6% for first-time home buyers

American Housing Survey (AHS) 2019, Freddie Mac, NAR

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Identifying the Future Borrower

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First-Time Homebuyers July 2021 - June 2022 First-Time Homebuyer Demographics FTHB • FTHB made up 26 percent of all home buyers, down from last year’s 34 percent. • The typical first-time buyer was 36 years old, while the typical repeat buyer age continued to climb to an all-time high of 59 years old.

Unmarried Couple

10% 9%

• At 62%, the primary reason for purchasing a home was the desire to own a home of their own. • The median age of FTHB was 36 years old, vs. 33 years old in 1981.

Single Male Single Female

61%

17%

Married Couple

• Twelve percent of buyers purchased a new home, and 88 percent of buyers purchased a previously owned home. • Down payment sources – 47% savings; 22% gifts from friends or relatives.

• 80% of recent sellers contacted only one agent before finding the right agent they worked with to sell their home. • Sellers typically lived in their home for 10 years before selling.

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Source: National Association of Realtors 2023 Home Buyers and Sellers Generational Trends Report

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Millennials Purchased More than Half of All Mortgage Loans in the Past Two Years Percent of Purchase Mortgages Issued to Millennial Buyers, Acquired by Freddie Mac

42% 35%

45%

47%

2018

2019

52%

2020

2021

38%

30% 23%

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14%

13%

15%

2009

2010

2011

2012

2013

2014

2015

2016

2017

Single Family

Millennials are the Most Diverse Adult Generation Ethnicity Not Hispanic

24%

21%

Race Hispanic

19%

76%

79%

81%

Gen Z

Millennial

Gen X

White Only

11%

89%

Baby Boomer

Black Only 2%

Asian / Pacific Islander Only

15%

13%

74%

75%

Gen Z

Millennial

11%

Two+ Races 1% 5% 9%

78%

82%

85%

Gen X

Baby Boomer

Silent

1% 5%

91%

Silent

Source: CPS Annual Social and Economic (March) Supplement 202203

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Single Family

Millennials are the Most Educated Adult Generation • •

40% of millennials have a bachelor’s degree or higher, compared with just 29% of Gen Xers and 28% of baby boomers when they were the same age. Higher share of educated Millennials resides in the Northeast or Mid-Atlantic regions. Educational Attainment When Aged 23-38

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Source: U.S. Census-Current Population Survey (CPS) 2019, FAFSA

Educational Attainment by State

Single Family

Millennials are Less Financially Literate than Older Generations Share of survey participants who are considered to be Financially literate 34%

Even though millennials are more educated, only 16% of them could be considered financially literate in 2018, compared to 34% of adults assessed at the same age range in 2009.

16%

Millennials in 2018

Adults in 2009

Studies find that fintech tool usage is often tied to poor money management. The increased tool usage, in part, explains the lower levels of millennial financial literacy as millennials leverage fintech tools more than older adults.

20 Non-Public

Source: TIAA Institute

Single Family

Understand Diverse Segments Challenges and Opportunities

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Single Family

Affordable Products Solutions

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Offering Low Down Payment Options • Home Possible®

• HFA Advantage®

First-time buyers and other buyers who qualify based on area median income in the home’s location

Based on Home Possible underwriting requirements

Down payment as low as 3%

Flexible down payment and closing cost funding options

1-unit primary residence; all borrowers must occupy

State/Local HFA’s down payment assistance and guidelines

Minimum MI coverage required

Co-borrower who is not part of the household allowed

Private mortgage insurance stops at 80% LTV

• HomeOneSM o

First-time buyers – no income restriction

All borrowers must occupy

Fixed-rate terms only

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Single Family

Home Possible Income & Property Eligibility Tool SF.FreddieMac.com/working-with-us/ affordable-lending/home-possible-eligibility-map Use this tool to verify if a borrower can qualify for a Freddie Mac Home Possible® mortgage based on the property location and the borrowers' qualifying income.

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Single Family

Down Payment Assistance

Down Payment Resource Website* Helps lenders connect their borrowers with homeownership programs that can help with down payment VISIT: DownPaymentResource.com/are-you-eligible/

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* Available on FreddieMac.com

Single Family

Supporting Your Business with Freddie Mac Resources

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Receive the Latest News and Updates

Updates and Alerts For: • • • • • •

Single-Family News Training Mortgage Solution Financial Literacy Data and Insights Homeownership Education Opportunities

Subscribe today: https://sf.freddiemac.com/about/single-family/subscription-center

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Single Family

Real Estate Professional Resource Center: New and Expanded

Strengthen Your Role as a Trusted Advisor With Your One-Stop Access to: • Industry Insights • Enhanced Business Growth Strategies and Tools • Resources to Share with Clients • Connections to Expand Professional Networks

• Latest News, Market Insights and Updates Take a tour: sf.freddiemac.com/realestatepros

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Single Family

My Home by Freddie Mac ®

Multi-Lingual Resources for Homeowners and Renters on: • Renting • The Homebuying and Mortgage Process • Sustaining Homeownership

Explore the resources: myhome.freddiemac.com

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Single Family

CreditSmart ® Homebuyer U Learning Path ) CreditSmart® Homebuyer U is a free education course developed for first-time homebuyers that focuses on key learning principles related to money management, credit, getting a mortgage, the homebuying process and preserving homeownership. Available in English and Spanish. Homebuyer U offers: •

Content in English and Spanish with ability to toggle between languages throughout the course

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Pause/ resume functionality Audio function and ability to follow along Interactive and multimedia features including videos, infographics, worksheets, and calculators

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Availability through multiple devices including mobile phone, tablet and desktop

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Knowledge checks and a final quiz

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Single Family

Freddie Mac CreditSmart® Empower your clients through education CreditSmart is a suite of free financial capability and homeownership education resources designed to empower consumers with the skills and knowledge to support them through every stage of their homeownership journey. Every person has a unique homeownership journey which is why CreditSmart offers different paths to education and financial wellness.

CreditSmart® Essentials*

CreditSmart® Multilingual

CreditSmart® Homebuyer U*

Now available in Spanish!

CreditSmart® Coach

CreditSmart® Military

*Available in English and Spanish Non-Public

Single Family

Credit Fee Caps: Affordable Lending Opportunity

Eliminates most upfront fees for certain first-time homebuyers, low-income borrowers and underserved communities to promote sustainable and equitable access to affordable housing. Freddie Mac offers three Credit Fee Caps: • First-time homebuyers – AMI% ≤ 100; AMI% ≤ 120 in designated high-cost areas.

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Home Possible® mortgages – AMI% ≤ 80.

• Certain Duty to Serve mortgages – AMI% ≤ 100.

Resources •

Guide Bulletin 2022-22

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AMI Income & Property Eligibility Tool

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Job Aid - How to Identify AMI% Using Freddie Mac Tools

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Exhibit 19, Credit Fees

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Exhibit 19A, Credit Fee Cap Eligibility Criteria

Area median income (AMI) percent is calculated using the borrower(s) qualifying income.

Credit Fee Caps may apply when the borrower(s) intend to occupy the property as their primary residence and for certain loan purpose types only. Refer to Exhibit 19A, Credit Fee Cap Eligibility Criteria for more details.

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Single Family

YOU Are the Critical Link • YOU are the critical link to helping well qualified homebuyers achieve their homeownership objectives: o

Provide access to credit; originate loans to the full extent of Freddie Mac’s credit box

Utilize your mortgage finance expertise

Explain the process and dispel the 20% down payment myth

Identify and match available financial resources in your area (government, nonprofit, private sources) with a sustainable mortgage solution

Take advantage of Freddie Mac training and resources for yourself and your borrower

• Homebuyer dream realized—and more business for you—if you know your market and where to find those affordability gap solutions

Freddie Mac is here to help! Non-Public

Single Family

Thank You!

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Toumie Parrot THCA

Tennessee Housing Development Agency Customer Account Manager

Kasey Kier Bell Bank Mortgage National Community Development Manager

15 Years | $27 Million in Giving

Affordable Options • Freddie Mac Home Possible & BorrowSmart • Fannie Mae HomeReady • Government Loans: FHA, USDA RD, VA

State Housing Finance Agency Bond Loans

Bell Moving Forward Advantage

Downpayment Programs

Housing Finance Agencies • State or county agency • Offers first and second (DPA) mortgages • Exclusive Freddie HFA Products

Borrower Smart • Available for qualified borrowers with Freddie Mac Home Possible • $1,500 grant for borrowers up to 50% AMI

BELL MOVING FORWARD

BMF Downpayment Assistance Loan (2nd loan)

BMF Advantage (1st mortgage)

BMF Downpayment Assistance Loan 2% of the purchase price 20 year term, same rate as first mortgage Can pair with Community DPA Programs Pairs with these 1st mortgage products: • Fannie Mae HomeReady • Freddie Mac Home Possible • Bell Moving Forward Advantage • Freddie Mac Borrow Smart • 1st mortgage programs must be: • Single-unit properties • 97% LTV/105% CLTV • • • •

Bell Moving Forward Advantage • 1st mortgage program for Minority borrowers • Manual UW

• 100% AMI • 97% LTV/105% CLTV

• Lender Paid MI • Can pair with BMF Downpayment Assistance Loan

Downpayment Programs • THDA DPA • Affordable Housing Resources • CDFI DPA – Davidson County • The Housing Fund – statewide • Others available across the state * DPAs typically subject to income or geography and may have limited resources

Steve Richman Presented by MGIC

B E L L BA N K M O R TG AG E

Wine and Wisdom THDA, MGIC, Freddie Mac & Steve Richman

BR Communications, Inc.

Tasting Overview TOPICS TO COVER Cleanse the Palate - Open the Mind A Deep Earthy Cab - The Meat and Potatoes of the Industry Today Netflix and Sip - Where Entertainment Meets the Industry Tiny Bubbles Go Straight To Your Head - Be Happy Wine Pairings - Embolden the Experience and Expect More Bottoms Up and Glasses Down - The Meaning of Being Present A Heady Tawny Port - Waxing Poetic on Today and Tomorrow

Opening Thoughts THE BAR IS OPEN The more you drink, the more interesting I become

A CONVERSATION, NOT A MONOLOGUE The more you engage, the more you ask, the more you participate, the more you will get out of it.

A HAPPY DETOUR If there is something you else you want to discuss, if there is a different direction you want to take this conversation. let’s go there.

CLEANSE THE PALATE OPEN THE MIND

Question WHAT DO MORTGAGES, REAL ESTATE AND WINE HAVE IN COMMON?

CLEANSE THE PALATE OPEN THE MIND

Question WHAT DO MORTGAGES, REAL ESTATE AND WINE HAVE IN COMMON?

CLEANSE THE PALATE OPEN THE MIND

Question WHY DO INDUSTRIES DISAPPEAR?

CLEANSE THE PALATE OPEN THE MIND

Question WHY DO INDUSTRIES DISAPPEAR?

It Starts By Picking One

PICK A GRAPE

PICK A GOAL

PICK A WORD

CLEANSE THE PALATE OPEN THE MIND

Question IS KNOWLEDGE POWER?

CLEANSE THE PALATE OPEN THE MIND

Question IS KNOWLEDGE POWER? Power Is Derived From How You Leverage Your Power

Presentation Foundation IMMA GONNA HELP YOU GROW YOUR BUSINESS AND FIND SUCCESS

Information

Mindset

Message

Action

A Deep Earthy Cab THE MEAT AND POTATIES OF THE INDUSTRY Watch Trends Not Numbers

A Deep Earthy Cab THE MEAT AND POTATIES OF THE INDUSTRY

NAR.com

A Deep Earthy Cab THE MEAT AND POTATIES OF THE INDUSTRY

NAR.com

A Deep Earthy Cab THE MEAT AND POTATIES OF THE INDUSTRY

NAR.com

A Deep Earthy Cab THE MEAT AND POTATIES OF THE INDUSTRY

FHFA.gov

A Deep Earthy Cab THE MEAT AND POTATIES OF THE INDUSTRY

FHFA.gov

A Deep Earthy Cab THE MEAT AND POTATIES OF THE INDUSTRY

ECON70.com

A Deep Earthy Cab THE MEAT AND POTATIES OF THE INDUSTRY

Netflix and Sip

Where Entertainement Meets Our Industry

Years Make A Reputation and Minutes Destroy It

Netflix and Sip

Where Entertainement Meets Our Industry

Expect The Unexpected

Netflix and Sip

Where Entertainement Meets Our Industry

Embrace Technology

Netflix and Sip

Where Entertainement Meets Our Industry

Ease Earns Loyalty

Netflix and Sip

Where Entertainement Meets Our Industry

Help Me Help You... Train to Complain

Netflix and Sip

Where Entertainement Meets Our Industry

Embrace Social Media - Embrace Video - SQUATM

Amazon and Sip

Where Entertainement Meets Our Industry

Teaching Customers To Be Transactional

Amazon and Sip

Where Entertainement Meets Our Industry

Amazons Definition Of A Relationship

Amazon and Sip

Turning Transactions Into Relationships

Translationship

Where Entertainement Meets Our Industry

They Taught Us

Work Hard

Find Success

Be Happy