How to buy a 2 unit property with HELP

HOW TO BUY A 2 UNIT PROPERTY WITH H.E.L.P The down payment assistant multi unit strategy

PRESENTATION DISCLAIMER This presentation is for real estate professionals only and is intended for the exclusive use of licensed real estate and mortgage lending professionals in accordance with local laws and regulations . It is not intended for the general public. Rates and programs are subject to change without notice.

The Power is Now Inc. is an Equal Opportunity Employer, Real Estate Broker and Mortgage Broker and does not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, veteran status, or other classification protected in originating loans or providing and real estate services.

PRESENTATION DISCLAIMER The Power Is Now Mortgage Services is a Mortgage Brokerage licensed by the State of California Bureau of Real Estate (license #1980407) and the National Mortgage License System and Registry (license #1435243), and is a division of The Power Is Now Inc. (license # 01980407).

The Power Is Now Inc. is not affiliated with any state or federal agency. The Power Is Now Real Estate Services is also licensed by the State of California Bureau of Real Estate (licensed #01980407), and is a division of The Power Is Now Inc. The Power Is Now Inc., is an equal housing lender.

Our corporate office is located at 3739 6th Street Riverside, CA 92501. Our Telephone and Fax number is 800-401-8994. Eric Lawrence Frazier MBA, is a California licensed Loan Originator (NMLS license # 461807), and a licensed Real Estate Broker (CA Bureau of Real Estate license #01143484).

Restrictions may apply to all loan programs. The Information and/or data is subject to change without notice and is intended for real estate and mortgage professionals only. If you are a consumer please contact us for a loan estimate on fees, charges and APR. All loans are subject to credit approval. The information is not a commitment to lend or extend credit. All loans or products are available in California only. The Power Is Now Mortgage Services and Real Estate Services are divisions of The Power Is Now Inc., and are only licensed to conduct business in the State of California.

BOB AND JACKIE RENTIER First time home buyers 4

BOB AND JACKIE RENTIER Bob Wages Jackies Wages Rental Income Total Inc.

$ $ $ $

3,000.00 4,000.00 7,000.00

5

BOB AND JACKIE RENTIER Rent Mortgage Car Payment Car Payment credit cards Student Loans 50K Total Credit/Rent/Mo. Saving account

$ $ $ $ $ $ $

2,000.00 300.00 250.00 150.00 416.00 3,116.00 $500 6

BOB AND JACKIE RENTIER Budget Income taxes 15% Food Electric/Gas bill Water trash Cable Gasoline Household Entertainment clothes/shoe/personal Total Living Expense

$ $ $ $ $ $ $ $ $ $

1,125.00 400.00 200.00 100.00 100.00 400.00 200.00 300.00 200.00 3,025.00

Credit & Rent Mo. Total Living Expense Total Cost of Living

$ $ $

3,116.00 3,025.00 6,141.00

Total income Total Cost of Living Disposable income

$ $ $

7,000.00 6,141.00 859.00

INCOME LIMIT MORTGAGE LIMIT

$ $

119,000.00 424,100.00

Renting a Apartment

Buying a 2 Unit Apartment

Current Housing DR. Rent Vacancy 25% Income Total Income Front DR

FUTURE Purchase Price Down Payment Loan Amount Upfront MI Total Loan Amt. Interest Rate/APR Principal and Interest Taxes Home Ins. Mortgage Ins. Total Payment PITI

Total Debt to Income Ratio.

Montly Debt Montly Income

$ $ $ $

2,000.00 7,000.00 29%

$ $

3,116.00 7,000.00 45%

2 Unit $ 439,482.00 0.035 $ 15,381.87 $ 424,100.13 7,421.75 0.0175 $ $ 431,521.88 APR: 5.798% Rate: 4.25% 2,123.00 $ 457.79 0.0125 $ 128.18 0.0035 $ 300.40 0.0085 $ 3,009.38 $

Income Limits vary and are based on 140% of HUD AMI. Mortgage Limits vary and are based on HUD Loan Limit for the AREA.

8

BOB AND JACKIE RENTIER – NO HELP NO LIMITS Cash Required to Buy Cash Requried to Closed: Down payment Closing cost Total Down 3 Months PITIMI Reserves Total Cash Required to Close:

3.50% $ 15,381.87 4% $ 17,579.28 $ 32,961.15 $ $ 32,961.15

Lenders Interest Credit Seller Credit Total Credit Total Cash Required

-2.00% $ (8,789.64) -2.00% $ (8,789.64) $ (17,579.28) $ 15,381.87

Initial Out of Pocket Expenses Initial of Pocket Expenses: Earnest Money Deposit $1000 to 2 % $ 3,000.00 Home Ispection $ 450.00 Appraisal Fee $ 650.00 Credit Report Fees $ 100.00 Total Out of Pocket Exp: $ 4,200.00 Cash Needed to close:

$ 19,581.87 9

BOB AND JACKIE RENTIER Buying a 2 Unit Apartment Bob Wages Jackies Wages Rental Income Total Inc.

$ $ $ $

3,000.00 4,000.00 1,600.00 8,600.00

Rent Mortgage Car Payment Car Payment credit cards Student Loans 50K Total Credit/Rent/Mo.

$ $ $ $ $ $ $

3,009.38 300.00 250.00 150.00 416.00 4,125.38

Saving account

$500

New Budget Budget Income taxes 15% Food Electric/Gas bill Water trash Cable Gasoline Household Entertainment clothes/shoe/personal Total Living Expense

$ $ $ $ $ $ $ $ $ $

1,125.00 400.00 200.00 100.00 100.00 400.00 200.00 300.00 200.00 3,025.00

Credit & Rent Mo. Total Living Expense Total Cost of Living

$ $ $

4,125.38 3,025.00 7,150.38

Total income Total Cost of Living Disposable income

$ $ $

8,600.00 7,150.38 1,449.62

BOB AND JACKIE RENTIER FUTURE Purchase Price Down Payment Loan Amount Upfront MI Total Loan Amt. Interest Rate/APR Principal and Interest Taxes Home Ins. Mortgage Ins. Total Payment PITI

2 Unit $ 439,482.00 0.035 $ 15,381.87 $ 424,100.13 0.0175 $ 7,421.75 $ 431,521.88 Rate: 4.25% APR: 5.798% $ 2,123.00 0.0125 $ 457.79 0.0035 $ 128.18 0.0085 $ 300.40 $ 3,009.38

Current Housing DR. Mortgage Vacancy 25% Income Total Income Front DR

Total Debt to Income Ratio.

Montly Debt Montly Income

$ $ $ $

3,009.38 (400.00) 7,000.00 9,609.38 31%

$ $

4,125.38 9,609.38 43% 11

BOB AND JACKIE HOMEBUYER – WITH NO HELP Cash Requried to Closed: Down payment Closing cost Total Down 3 Months PITIMI Reserves Total Cash Required to Close:

3.50% 4%

Lenders Interest Credit Seller Credit Total Credit Total Cash Required

-2.00% -2.00%

Initial of Pocket Expenses: Earnest Money Deposit $1000 to 2 % Home Ispection Appraisal Fee Credit Report Fees Total Out of Pocket Exp: Cash Needed to close:

$ $ $ $ $

15,381.87 17,579.28 32,961.15 32,961.15

$ (8,789.64) $ (8,789.64) $ (17,579.28) $ 15,381.87

$ $ $ $ $

3,000.00 450.00 650.00 100.00 4,200.00 $ 19,581.87 12

BOB AND JACKIE HOMEBUYER -WITH HELP Cash Requried to Closed: Down payment Closing cost Total Down 3 Months PITIMI Reserves Total Cash Required to Close: HELP PROGRAM Seller Credit Total Credit Total Cash Required

3.50% 4%

$ $ $ $ $

15,381.87 17,579.28 32,961.15 32,961.15

-4.5% -3.36%

$ $ $ $

(19,418.48) (14,766.60) (34,185.08) (1,223.93)

Initial of Pocket Expenses: Home Ispection Appraisal Fee Credit Report Fees

$ $ $

450.00 650.00 100.00

Total Out of Pocket Exp:

$

1,200.00

Cash Needed to close:

$

(23.93) 13

BOB AND JACKIE HOMEBUYER

Debt Service Coverage Ratio Rental Unit A. (LIVE) $ Rental Unit B. $ Total $ Mortgage PITI $ DSCR 1:11

1,500.00 1,600.00 3,100.00 3,009.00 1.03 14

NO DOWN PAYMENT Program 2016

– ENDED –

15

THE HELP PROGRAM Not having the money for a down payment is no longer an excuse!

THE “HELP” PROGRAM Purpose of the Program • The “HELP” Program provides financing to families and individuals who can afford a mortgage loan but do not have the resources for the down payment and/or closing costs.

What the Program provides • The “HELP” Program offers financing on FHA, USDA and VA Loans designed to increase homeownership opportunities to low-to-moderate income individuals and families in CA. 17

WHY WE NEED HELP NOW! • • • • • •

State DAP programs take too long County and City DAPs out of funds or limited funds.

County and City DAPs have more restrictive guidelines/products Low inventory – Higher prices more money Sellers market – Higher prices and zero to limited seller credit Higher cost of living = consumers have less money to save

18

THE HELP PROGRAM HIGHLIGHTS

HELP PROGRAM The program is 1st Mortgage Loan with a 4.5% Down Payment Assistance Grant.

Grant Proceeds can be used for: • Down payment: The seller can pay the closing up to 6% • Closing costs: If you have the down payment.

• Prepaid item(s): Taxes, Hazard Ins., Mortgage Ins., • Earnest money: 1 to 2% of the Purchase price • Cost paid outside of escrow: Appraisal, Inspection, Credit 20

HELP INCOME LIMITS (UP TO 140% AMI)

21

HELP INCOME LIMITS (UP TO 140% AMI)

22

HELP PROGRAM LOAN LIMITS $424,100 or HUD Loan Limit whichever is Lower

Conforming Loan Limit Riverside San Bernardino County Orange County Los Angeles County

$ 424,100.00 $ 424,100.00 $ 636,150.00 $ 636,150.00

San Diego County

$ 562,350.00

San Francisco

$ 636,150.00

Santa Clara Contra Costa

$ 636,150.00 $ 636,150.00

HUD Loan Limit Riverside $ 356,500.00 San Bernardino County $ 356,500.00 Orange County $ 636,150.00 Los Angeles County $ 636,150.00 San Diego County $ 562,350.00 San Francisco $ 636,150.00 Santa Clara $ 636,150.00 Contra Costa $ 636,150.00 Alameda $ 636,150.00 23

BORROWER QUALIFYING INCOME • Borrower qualifications is based on Qualified repayment Income • Only the Applicants income used for Qualifying is considered in order to meet the program income limits • All income documented that borrower receives on a consistent basis must meets FHA’s Effective income guidelines (2 year history and is likely to continue for 3 years) For example: Retirement income, Overtime income, Bonus income, part-time income must have a 2 year history and the likelihood to continue.

24

BORROWER ELIGIBILITY • Borrower Eligibility: • Be a U.S. citizen, permanent resident alien, or qualified alien • Owner Occupied Primary Residence only.

• You do not have to be a first time homebuyer to participate in the program • You may own other properties – must meet FHA requirements.

• Non occupying Co-borrowers/Co-signers are ALLOWED. • Meet Credit, income & Loan requirements of the lender & NHF.

25

PROPERTY ELIGIBILITY • Property Eligibility: • SFR Single Family Residences • PUDs Planned Unit Condominiums • Agency Approved Condos • 1 to 2 units properties only • Manufactured Homes • Ineligible: • Three to four units • Rental homes • Co-ops • Investment properties • Recreational, vacation or second homes

26

UNDERWRITING GUIDELINES #1 • Minimum Credit Scores: • Minimum Credit scores 640+ 679 • Non-traditional Trade line – Not allowed must have min. score • 1 to 2 Units properties (2nd Unit income must be included in the income limits.

• Do NOT need to be a first time homebuyer (unless you are combining with an MCC – CA only – One Unit only) - No counseling classes needed.

• Max Debt Ratio: • • • • •

Debt Ratio determined by AUS/DU Approved/Eligible 50% DR DU – Refer/Eligible: Housing ratio 31% Total Debt Ratio 43% 1 to 3 month reserves may be required if AUS/DU approval is not granted No reserves requirement on DU approved loans • AUS/DU Defined: Fannie Mae’s Desktop Underwriter. An automated underwriting system or decision engine that approves loans or refers them an underwriter for approval or denial 27

UNDERWRITING GUIDELINES #2 • Minimum Credit Scores: • Minimum Credit scores 680 + • Non-traditional Trade line – Not allowed must have min. middle score 620

• Max Debt Ratio: • • • • •

Debt Ratio determined by AUS/DU Approved/Eligible 46.99 to 56.9% DR is the Max with DU approval DU – Refer/Eligible: Housing ratio 31% Total Debt Ratio 43% 1 to 3 month reserves may be required if AUS/DU approval is not granted No reserves requirement on DU approved loans • AUS/DU Defined: Fannie Mae’s Desktop Underwriter. An automated underwriting system or decision engine that approves loans or refers them an underwriter for approval or denial

Do NOT need to be a first time homebuyer (unless you are combining with an MCC – CA only – One Unit only) - No counseling classes needed.

28

PROGRAM SUMMARY • • • • •

NOT Limited to First Time Home Buyers You Can Own other property NO “Recapture Tax” if home is sold later – Unless using the MCC NO Sales Price Limits Works with EEM and MCC Program to help borrower’s qualify CLTV’s up to 96.50% - little (.5%) to no money down & out of pocket closing costs: •

• • • • • • • • •

inspections, credit reports and appraisal fees are included

No Minimum Borrower Contribution Required Ratios stretched up to 56.9% DTI with DU approved/eligible 720 Fico Manual Underwrite 31/43 DTI with DU refer/eligible One to Four Unit Homes Manufactured Homes with minimum 680 fico score Grant of 4.5% | Seller credit up to 6% Works with FHA, VA, USDA only – No conventional financing Maximum Loan amount 424.1k or HUD County Loan Limit which ever is lower.

Available in State of California only.

29

PRESENTATION DISCLAIMER This presentation is for real estate professionals only and is intended for the exclusive use of licensed real estate and mortgage lending professionals in accordance with local laws and regulations . It is not intended for the general public. Rates and programs are subject to change without notice.

The Power is Now Inc. is an Equal Opportunity Employer, Real Estate Broker and Mortgage Broker and does not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, veteran status, or other classification protected in originating loans or providing and real estate services.

PRESENTATION DISCLAIMER The Power Is Now Mortgage Services is a Mortgage Brokerage licensed by the State of California Bureau of Real Estate (license #1980407) and the National Mortgage License System and Registry (license #1435243), and is a division of The Power Is Now Inc. (license # 01980407).

The Power Is Now Inc. is not affiliated with any state or federal agency. The Power Is Now Real Estate Services is also licensed by the State of California Bureau of Real Estate (licensed #01980407), and is a division of The Power Is Now Inc. The Power Is Now Inc., is an equal housing lender.

Our corporate office is located at 3739 6th Street Riverside, CA 92501. Our Telephone and Fax number is 800-401-8994. Eric Lawrence Frazier MBA, is a California licensed Loan Originator (NMLS license # 461807), and a licensed Real Estate Broker (CA Bureau of Real Estate license #01143484).

Restrictions may apply to all loan programs. The Information and/or data is subject to change without notice and is intended for real estate and mortgage professionals only. If you are a consumer please contact us for a loan estimate on fees, charges and APR. All loans are subject to credit approval. The information is not a commitment to lend or extend credit. All loans or products are available in California only. The Power Is Now Mortgage Services and Real Estate Services are divisions of The Power Is Now Inc., and are only licensed to conduct business in the State of California.

HELP GRANT PROGRAM