Realtor seminar presentation-Session II

SESSION II Is The American Dream a Reality?

Eric L. Frazier MBA President and CEO CAL BRE 01143485 NMLS 461807 800-401-8994 x 703 The Power Is Now Inc. CAL BRE 1980407 NMLS 1435243

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THE PATHWAY TO POWER AND WEALTH Is To Own Real Estate Now!

THE POWER IS NOW WEALTH INITIATIVE www.neverrentagain.com Building Wealth with Real Estate

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THE POWER IS NOW WEALTH INITIATIVE Changing your mindset toward financial literacy and wealth building. www.neverrentagain.com FIVE KEY OBJECTIVES

RESEARCH STUDY ON THE WEALTH GAP Brandeis University Institute of Asset and social Policy RESEARCH AND POLICY BRIEF FEBRUARY 2013 The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide

Authored by: Thomas Shapiro Tatjana Meschede Sam Osoro 6

RESEARCH STUDY ON THE WEALTH GAP Data for this analysis was derived from the Panel Study of Income Dynamics (PSID), a nationally representative longitudinal study that began in 1968.

They followed nearly 1,700 working-age households from 1984 through 2009.

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RESEARCH STUDY ON THE WEALTH GAP â—? The goal of the study was to examine the effect of policy and institutional decision-making on how average families accumulate wealth.

â—? There was a insufficient number of Latino, Asian American, or immigrant households to include in this report but the results can be applied across communities of color.

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MEDIAN WEALTH In 2009, a representative survey of American household revealed That the median wealth of: White families - $113,149 Latino families- $6,325 Black families - $5,677 The Gross Domestic Product of African American is 1.3 Trillion dollars and 1.5 Trillion dollars for Hispanics.

Why is the median wealth so low?

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YOUR POWER IS NOW TO BUILD WEALTH You're not building wealth if you use all your money for consumption.

The GDP of African American is 1.3 Trillion dollars (13 out of 182 countries) The GDP for Hispanics is 1.5 Trillion dollars (10 out of 182 countries)

GREAT RECESSION AND GREAT GAP The Wealth Gap Research Report Traced the same 1700 families over a 25-year period (1984-2009) and found that the total wealth gap between White and African-American families nearly tripled, increasing from:

$85,000 in 1984 to $236,500 in 2009

The Wealth Gap: $152,000 and growing

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THE STATE OF HOUSING FOR MINORITIES The Black/Brown-White Economic Divide Real African American and Hispanic communities were hit the hardest by the Great Financial Crises from 2007 to 2009 They have the farthest to climb to get back into the home ownership before home values get back to their pre-recession prices.

It may be too late for many because interest rates will be rising and home prices are increasing now.

1994 BLACKS & HISPANIC HOMEOWNERSHIP RATES: 40 & 42% RESPECTIVE LY. 2004 BLACKS ACHIEVED A HIGH OF 50% 2014 BLACKS WERE AT 42.5% AND HISPANICS 43.5% HISPANICS. 13

LESSONS LEARNED - GREAT FINANCIAL CRISIS 1.We must save money – Make it your #1 priority now and not later.

2.We must live on a budget – Do not live by hope & faith and beyond your means 3.We must establish an emergency fund – Plan for the worse & expect emergencies.

LESSONS LEARNED - GREAT FINANCIAL CRISIS 4. Stop financing vehicles - Pay cash or limit financing to 12 mos.

5.Become debt free – Save & Buy Stop Borrowing and Buying 6.Buy real property – Buy a house before you buy an expensive car/personal item.

THE STATE OF HOUSING FOR MINORITIES The homeownership rate in the U.S. is 63.5 percent overall. The rate among whites is 72.2%, Asians, 56.6%, Hispanic 46.3%, African Americans 41.7%

https://www.census.gov/housing/hvs/files/currenthvspress.pdf

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THE STATE OF HOUSING BY AGE The homeownership rate by Age of Householder. Under 35 - 34.7 percent, 35 to 44 - 58.7 percent, 45 to 54 - 69.8 percent, 55 to 64 - 74.8 percent, 65 and over - 79.5 percent.

https://www.census.gov/housing/hvs/files/currenthvspress.pdf

THE STATE OF HOUSING FOR MINORITIES If homeownership continues to be the primary vehicle that Minorities use to create wealth then Minorities are on the path to another Economic Crisis and homelessness!

It’s time to take action and personal responsibility and build wealth.

WEALTH IS THE DIFFERENCE Wealth provides a measure of security when a job loss or personal crisis occurs.

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Great Recession further exacerbated the wealth gap as Blacks and Latinos disproportionally impacted by the bursting of the housing bubble.

Between 2007 and 2010, the average Black and Latino households lost three and four times more wealth, respectively, than the average White household.

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Extrapolating from past trends, we can estimate what the future of wealth inequality will look like in this country. Unfortunately, it doesn’t look good.

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WHY ARE WE BEHIND? •We have the lowest rate of homeownership 41.7% to compared to Latinos at 46.3% and whites at 72.2% •We have the highest unemployment rate of 8.1% compared to Latino at 5.6% and whites at 4.1%.

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WHY ARE WE BEHIND? •The black tradition family is under stress: •Today 71% of births outside of marriage is to black woman compared to 29% of births to white women.

•In 1970, 38% of all births to black women occurred outside of marriage.

•50% of black children are being raised by a single parent as opposed to 19% among whites.

•In 1970 35% of children where living with a black parent as opposed to 10% of white families.

•We second highest level of high school drop outs, sexually transmitted disease and the highest crime than any other ethnic group in addition to the highest level of incarnation of men of any other ethnic group.

•This is where we are. Today 2017.

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WHY ARE WE BEHIND? •Every freedom we enjoy today has been paid for by blood. It has been a fight for freedom for African American from our capture in Africa, the middle passage to the day we step foot on American soil we had to survive in country among people who viewed us as less than equal.

•In spite of these things: •We are only 12% of the population, born out of slavery, poverty and our homeownership rate is 41.7 and going to 50% •We are only12% of the population and our GDP is 1.3 Trillion 13 out of 182 Countries.

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WHY ARE WE BEHIND? •We are only 12% of the population and we leaders in sports & entertainment, business, science, medicine, education, law, engineering, computers, software development, space, military and have achieve the highest office in the land.

Can we buy a home? Of course we can!!!

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How do we close the Gap?

Great Recession further exacerbated the wealth gap as Blacks and Latinos disproportionally impacted by the bursting of the housing bubble.

Between 2007 and 2010, the average Black and Latino households lost three and four times more wealth, respectively, than the average White household.

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How do we close the Gap?

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THE POWER IS NOW MORTGAGE SERVICES •The Federal Housing Administration (FHA) was created as part of the National Housing Act of 1934 in response to the struggling housing industry following the Great Depression.

•Before its creation, only 40% of Americans were homeowners. This low homeownership rate was largely due to the limited short-term financing available, •Most loans were offered with three to five-year payment plans and required large down payments often consisting of 50% of the purchase price.

•Only the very wealthy were able to purchase a home.

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THE POWER IS NOW MORTGAGE SERVICES •The FHA's ability to assume the lender's risk allowed home loans to be spread out over longer terms, resulting lower monthly payments and greater access to mortgage funds. •The FHA established two mortgage insurance programs; one for one-to-four-unit single-family residences (SFRs) and one for multifamily housing units. In 1965, the FHA became part of the U.S. Department of Housing and Urban Development (HUD).

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THE POWER IS NOW MORTGAGE SERVICES •The FHA is a government agency, however its funding is selfgenerated. It has insured over 34 million home mortgages and over 47,000 multifamily projects since its inception. •Mortgage Insurance premiums fund the program

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REAL ESTATE WIILL CLOSE GAP THE AMERICA DREAM IS STILL A REALTY

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How to buy a 4 Unit Property as First Time Home Buyer THE FIRST TIME HOME BUYER MULTI UNIT STRATEGY 35

INTRODUCTION The Power Is Now Inc.  The Power Is Now is a multimedia company has been around since 2009  The Power Is Now Inc. is licensed to sale real estate CAL BRE 1980407

 The Power Is Now Inc. is license to broker mortgage loans NMLS 1435243  Founder and Broker Eric L. Frazier MBA CAL BRE 01143484 & NMLS 461807 As a Mortgage Brokerage, The Power Is Now Mortgage Services has access to many lenders that offer programs for first time homebuyers, move up buyers, investors, churches, non-profits and foreign nationals. We are a full service mortgage brokerage.

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Eric L. Frazier MBA President and CEO CAL BRE 01143485 NMLS 461807 800-401-8994 x 703 The Power Is Now Inc. CAL BRE 1980407 NMLS 1435243

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Multi Unit Strategy How to buy a 4 Unit Property as FTHB 38

MULTI UNIT STRATEGY Housing prices have begun to stabilize in most parts of the country Home sales are on the rise, it’s an indication that the housing market is in the “thaw� stage and on the road to recovery.

Demand for rental property is on the rise. Housing demand has also allowed landlords to demand higher rents.

The combination of low rates and higher available rent means that part or all of your mortgage payment can be paid for by a renter.

How can this happen?

Purchase a Four Unit Property Live in One Unit and Rent out the Other Three Units 40

DOWN PAYMENTS LESS THAN 20% ON 2-4 UNIT PROPERTIES Don’t have a 20% down payment?

FHA loans require only 3.5% down on 2-4 unit properties.

If you are eligible for a VA home loan, you may qualify for a zero-down loan of up to $1 million in some areas.

Conventional loan requires a higher down payment amount: 2-unit: 15% down payment required 3-unit: 25% down payment required 4-unit: 25% down payment required

MULTI-PLEX LOAN LIMITS Conventional and Government loans allow higher maximum loan amounts when buying a 2-4 unit property.

Multi-unit homes tend to be more expensive than 1-unit homes, so lending agencies take this into account when setting loan limits.

MULTI-PLEX LOAN LIMITS For example: High Balance Conventional & Gov. loans in Orange County, California allow a loan of up to $636,150 on a single-family home, but up to $1,223,475 on a 4-unit property.

Bob and Jackie Rentier FIRST TIME HOME BUYERS 44

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

$ $ $

3,500.00 4,000.00 0 7,500.00

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 $35,000

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

BOB AND JACKIE RENTIER Renting a Apartment

Buying a 4 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%

4 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

BOB AND JACKIE RENTIER Cash Required to Buy

Initial Out of Pocket Expenses

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 $ 9,028.14 $ 41,989.29

Lenders Interest Credit Seller Credit Total Credit Total Cash Required

-2.00% $ (8,789.64) -2.00% $ (8,789.64) $ (17,579.28) $ 24,410.01

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

$ $ $ $ $

5,000.00 450.00 750.00 100.00 6,300.00

BOB AND JACKIE RENTIER Buying a 4 Unit Apartment Bob Wages Jackies Wages Rental Income Total Inc.

$ $ $ $

3,000.00 4,000.00 5,400.00 12,400.00

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 401k

$35,000

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

$ $ $

12,400.00 7,150.38 5,249.62

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

4 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

Mortgage

$

Vacancy 25% Total Wages Total Income Front DR

$ 4,050.00 $ 7,000.00 $ 11,050.00 27%

Total Debt to Income Ratio.

Montly Debt Montly Income

3,009.38

$ 4,125.38 $ 11,050.00 37%

BOB AND JACKIE RENTIER 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:

$ $ $ $ $

15,381.87 17,579.28 32,961.15 9,028.14 41,989.29

$ (8,789.64) $ (8,789.64) $ (17,579.28) $ 24,410.01

$ $ $ $ $

Cash Needed to close:

5,000.00 450.00 750.00 100.00 6,300.00

$ 30,710.01

BOB AND JACKIE RENTIER Self Sufficiency Coverage Rental Unit A. Rental Unit B. Rental Unit C. Rental Unit D. Total 25% Vacancy Factor Total Mortgage PITI DSCR 1:1

Ratio $ 1,500.00 $ 1,800.00 $ 1,800.00 $ 1,800.00 $ 6,900.00 $ (1,725.00) $ 5,175.00 $ 3,009.00 1.72

HOW TO QUALIFY TO BUY 4 UNITS The Power of Four Program 54

THE POWER OF OUR PROGRAM Purpose of the Program • The Power of Four Program provides two objectives: • 1. Provide financing to families and individuals who want to share the expense of a mortgage with other families or tenants so they can eliminate a mortgage payment completely.

• 2. Provide assistance to families who have the resources for the down payment but not the closing costs or reserve requirements.

What the Program provides • The Power of Four Program offers financing on FHA, USDA and VA Loans designed to increase homeownership opportunities to low-to-moderate income individuals and families in CA and eliminate burden of the mortgage payment or share the cost of the mortgage to significant decrease it.

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WHY WE NEED THE PO WER OF FOUR NOW! •

• • • • • •

State DAP programs, County and City DAPs do not support 4 unit transactions.

Low inventory – Higher prices require more money & lack of affordability Sellers market – Higher prices and zero to limited seller credit Less competition in many areas and easier to buy.

Faster Appreciation of value with annual increases in rent.

Family’s are able to pool their money and have a unit of their own.

3.5% down payment – the lowest down payment in the industry for investment properties.

THE “POWER OF FOUR PROGRAM” HIGHLIGHTS 57

THE POWER OF FOUR PROGRAM The program is 1st Mortgage Loan with a Minimum Required Down Payment for the following loans: FHA 203k and 203B: 3.5% VA: Zero Down Down Payment can come from the following sources: • Down payment: Gift from Family Member • Closing costs & Prepaid item(s): Taxes, Hazard Ins., Mortgage Ins., • The seller can pay the closing up to 6% • Earnest money: Gift from Family Member • Cost paid outside of escrow: Appraisal, Inspection, Credit

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THE POWER IS NOW MORTGAGE SERVICES • The Federal Housing Administration (FHA) was created as part of the National Housing Act of 1934 in response to the struggling housing industry following the Great Depression.

• Before its creation, only 40% of Americans were homeowners. This low homeownership rate was largely due to the limited short-term financing available, • Most loans were offered with three to five-year payment plans and required large down payments often consisting of 50% of the purchase price.

• Only the very wealthy were able to purchase a home.

•

THE POWER IS NOW MORTGAGE SERVICES • The FHA's ability to assume the lender's risk allowed home loans to be spread out over longer terms, resulting lower monthly payments and greater access to mortgage funds. • The FHA established two mortgage insurance programs; one for one-to-four-unit single-family residences (SFRs) and one for multifamily housing units. In 1965, the FHA became part of the U.S. Department of Housing and Urban Development (HUD).

THE POWER IS NOW MORTGAGE SERVICES • The FHA is a government agency, however its funding is self-generated. It has insured over 34 million home mortgages and over 47,000 multifamily projects since its inception.

• Mortgage Insurance premiums fund the program

•

PROGRAM INCOME & LOAN LIMITS 62

2017 MORTGAGE LIMITS FHA INSURED LOANS

FHA AREA BETWEEN FLOOR & CEILING 2017 MORTGAGE LIMITS FHA INSURED LOANS

FHA AREAS AT CEILING - 2017

FHA 203B 4 UNITS •

Down Payment: – 10% down payment 500 to 579 FICO – 3.5% down payment 580 +

•

Minimum Credit Scores: – Minimum Credit scores 500+ – Non-traditional Trade line – Allowed – 3 years seasoning on Foreclosure, Shortsale and Bankruptcy.

– Do NOT need to be a first time homebuyer No counseling classes needed.

FHA 203 B 4 UNITS • Max Debt Ratio: – – – –

Debt Ratio determined by AUS/DU Approved/Eligible No DR Max with AUS approval DU – Refer/Eligible: Housing ratio 31% Total Debt Ratio 43% 3 month reserves is required with or without AUS/DU approval –

No reserves requirement is for SFRs only with DU approval.

• 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

FHA 203 B | 2 TO 4 UNITS • Property Types: – OWNER OCCUPIED ONLY – Residential Properties – 2 to 4 Units

VA HOME LOAN The original Servicemen’s Readjustment Act, passed by the United States Congress in 1944, extended a wide variety of benefits to eligible veterans. – Under the law, as amended, the VA is authorized to guarantee or insure home, farm, and business loans made to veterans by lending institutions.

VA HOME LOAN • Big Opportunity – Over the history of the program, 18 million VA home loans have been insured by the government.

– Currently there are 22 million veterans and only 2 million loan in servicing.

VA LOAN LIMITS • VA's 2017 Loan Limits are the same as the Federal Housing Finance Agency's limits - 2017 Loan Limits (Effective January 1, 2017).

• For purposes of determining the VA guaranty, lenders are instructed to reference only the One-Unit Limit column in the FHFA (Federal Housing Finance Agency) Table “Fannie Mae and Freddie Mac Maximum Loan Limits for Mortgages Acquired in Calendar Year 2017 and Originated after 10/1/2011 or before 7/1/2007”.

VA LOAN LIMITS • VA does not set a cap on how much you can borrow to finance your home.

• The loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a downpayment and vary by county, since the value of a house depends in part on its location.

• The basic entitlement available to each eligible Veteran is $36,000.

Lenders will generally loan up to 4 times a Veteran's available entitlement without a down payment, provided the Veteran is income and credit qualified and the property appraises for the asking price.

VA HOME LOAN • Purchase/Refinance/Construction 1 to 4 Units – VA loans may be used to finance the purchase or construction of a one- to four-unit residence.

– Can’t be used for investor loans.

– Veteran must occupy home.

VA HOME LOAN • Features and Benefits – – – – – – –

No down payment required (100% financing).

No maximum loan amount set by VA. No maximum income limits.

Less stringent qualifying standards.

Can be fixed-rate loan or ARM. No mortgage insurance required.

No reserves after closing required.

VA HOME LOAN • Features and Benefits – Lender may charge flat fee of no more than 1% of amount financed to cover cost of making loan.

– No prepayment penalties.

– Can be assumed by creditworthy buyer, veteran or non-veteran.

– Forbearance extended to veterans in financial difficulties.

VA HOME LOAN • No Mortgage Insurance – Instead of mortgage insurance premiums, VA borrowers must pay VA a funding fee to defray administrative costs of loan program.

– Funding fee is percentage of loan amount.

– Can be paid at closing or financed.

VA HOME LOAN • VA Funding Fee - First Time Use Down Payment – Less than 5%* – 5% to 9.99% – 10% or more

Veteran/Active Duty 2.15% 1.50% 1.25%

Reservist/Nat. Guard 2.40% 1.75% 1.50%

VA HOME LOAN • VA Funding Fee - Second Time Use Down Payment – Less than 5%* – 5% to 9.99% – 10% or more

Veteran/Active Duty 3.30% 1.50% 1.25%

Reservist/Nat. Guard 3.30% 1.75% 1.50%

VA HOME LOAN • VA Streamline Refinance / IRRL (interest Rate Reduction Refinance Loan) Type of Loan – 1st Time Use – 2nd Time Use

Veteran/Active Duty 0.50% 0.50%

Reservist/Nat. Guard 0.50% 0.50%

VA HOME LOAN FUNDING FEE • Exempt from funding fee requirement: • Veterans entitled to receive VA compensation for service-related disabilities.

• Surviving spouses of veterans who died in service or from servicerelated disabilities.

VA HOME LOAN ELIGIBILITY • Eligibility for VA loans is based on length of active duty service in U.S. armed forces.

• Honorably discharged veterans who served: • • • • • •

2 years on active duty 6 years in the Reserve/National guard POW’s held in captivity for 90 days of more 90 days of wartime duty when called up or ordered under U.S.C. Title 10 (this US code must appear on DD214).

181 days of peacetime duty called up under U.S.C. Title 10 Some unmarried surviving spouses

VA HOME LOAN CERTIFICATE OF ELIGIBILITY • Obtaining your COE • VA Form 26-1880 • Proof of service documentation (DD214, active duty statement of service or Reserve/National Guard points statement) • If veteran had previous VA home that was sold, a copy of the HUD-1 Settlement Statement

 VA has an automated system used by lenders to obtain an online certificate of eligibility

VA HOME LOAN CERTIFICATE OF ELIGIBILITY • Obtaining your COE • VA Form 26-1880 • Proof of service documentation (DD214, active duty statement of service or Reserve/National Guard points statement) • If veteran had previous VA home that was sold, a copy of the HUD-1 Settlement Statement

 VA has an automated system used by lenders to obtain an online certificate of eligibility

PROGRAM QUALIFYING INCOME BORROWER QUALIFYING INCOME 86

BORROWER QUALIFYING INCOME • •

Borrower qualifications is based on Qualified repayment Income All income documented that borrower receives on a consistent basis must meets VA 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.

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UNDERWRITING GUIDELINES •

Minimum Credit Scores: – Minimum Credit scores 580 + – Non-traditional Trade line – Not allowed must have min. middle score 580

•

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% – 3 month reserves may be required • 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 88

THE POWER OF FOUR PROGRAM

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HOW TO BUY A 2 UNIT PROPERTY WITH H.E.L.P THE DOWN PAYMENT ASSISTANT MULTI UNIT STRATEGY 90

BOB AND JACKIE RENTIER FIRST TIME HOME BUYERS 91

Bob and Jackie Rentier Bob Wages Jackies Wages Rental Income Total Inc.

$ $ $ $

3,000.00 4,000.00 7,000.00

92

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 93

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.

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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 96

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% 98

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 99

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) 100

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 1.03 101

NO DOWN PAYMENT Program 2016

– ENDED –

102

The “HELP” Program

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

103

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. 104

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

105

The “HELP” Program Highlights

106

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 107

HELP Income Limits (up to 140% AMI)

108

HELP Income Limits (up to 140% AMI)

109

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 San Diego County San Francisco Santa Clara Contra Costa

$ $ $ $ $ $ $ $

424,100.00 424,100.00 636,150.00 636,150.00 562,350.00 636,150.00 636,150.00 636,150.00

HUD Loan Limit Riverside San Bernardino County Orange County Los Angeles County San Diego County San Francisco Santa Clara Contra Costa Alameda

$ 356,500.00 $ 356,500.00 $ 636,150.00 $ 636,150.00 $ 562,350.00 $ 636,150.00 $ 636,150.00 $ 636,150.00 $ 636,150.00

110

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.

111

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.

112

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

113

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 114

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.

115

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.

116

HELP Grant Program

117

CALPLUSSM FHA LOAN PROGRAM MY HOME AND ZIP 1 1 8

ZERO TO LITTLE MONEY DOWN Bob Wages Jackies Wages Rental Income Total Inc.

$ $ $ $

3,000.00 3,500.00 6,500.00

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

$ $ $ $ $ $

2,396.91 300.00 150.00 2,846.91

Saving account

$500

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

$ $ $

2,846.91 3,025.00 5,871.91

Total income Total Cost of Living Disposable income

$ $ $

6,500.00 5,871.91 628.09

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

Cash Requried to Closed: Down payment Closing cost Total Down ZIP Closing Cost Credit My Home Total Credit

$ 350,000 0.035 $ 12,250 $ 337,750 1.75% $ 5,911 $ 343,661 Rate: 4.25%APR: 5.798% $ 1,691 1.25% $ 365 0.35% $ 102 0.85% $ 239 $ 2,397

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

$ 2,396.91 $ $ $ 6,500.00 37%

Total Debt to Income Ratio.

Montly Debt $ 2,846.91 Montly Income $ 6,500.00 BACK DR 44%

3.50% $ 12,250.00 4% $ 12,250.00 $ 24,500.00 -4% $ (12,250.00) -3.50% $ (12,028.12) $ (24,278.12)

Total Cash Required

$

221.88

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

$ $ $

350.00 500.00 100.00

Total Out of Pocket Exp:

$

1,171.88

119

PROGRAM SUMMARY The CalPLUS FHA loan program is a fully amortized thirty 30-year fixed interest rate FHA-insured first mortgage.

This loan is combined with the CalHFA Zero Interest Program (ZIP) for closing cost assistance.

AND The MY Home Program for down payment assistance.

1 2 0

PROGRAM SUMMARY The FHA ZIP second loan is only available with CalPLUS and is a silent second loan for either 3.5% or 4.50% of the CalHFA FHA total ďŹ rst mortgage loan amount, including Up Front Mortgage Insurance Premium (UFMIP).

1 2 1

PROGRAM SUMMARY The interest rate is zero percent (0.00%) and the payment(s) are deferred for the life of the first mortgage or until the property is transferred or the first mortgage loan is refinanced.

The CalPLUS loan is not subject to Recapture Tax.

1 2 2

ELIGIBILITY Eligible Homebuyers This program is available for both first-time and non- first-time homebuyers

1 2 3

ELIGIBILITY Homebuyer Education Homebuyer Education is required for one occupying first-time homebuyer. Homebuyer Education is not required for non-first-time homebuyer(s).

• Online Homebuyer Education through eHomeTM • Face-to-Face Homebuyer Education through NeighborWorks America, NID or through one of the HUD approved Housing Counseling Agencies

1 2 4

Owner Occupancy • Non-occupant co-signers are allowed per FHA guidelines • Non-occupant co-signers:

o must not occupy the property o must not be on title or have a vested interest in the property o must sign all loan documents except the security instrument(s)

o will have their income, assets, liabilities and credit histories considered by underwriters

1 2 5

Property Requirements • Sales price of the home cannot exceed CalHFA’s sales price limits established for the county in which the property is located.

126

Property Requirements • Property must be a single-family, one-unit residence, including FHA- approved condominium/PUDs.

127

Property Requirements • Manufactured homes are permitted with the following parameters: o Minimum credit score: 700 o Maximum LTV/CLTV: 90.00% o Maximum loan term: 20 years

1 2 8

Property Requirements o Maximum age of property: 25 years o Manual Underwriting is not permitted on manufactured homes o All manufactured homes must meet FHA requirements

1 2 9

Additional Property Guidelines • Guest houses, “granny” units, and “in law” quarters are eligible o Must be zoned for Single Family Occupancy

1 3 0

Additional Property Guidelines

o Cannot be zoned for 2-4 units o Must meet underwriting guidelines and city/county zoning ordinances o May not be income-producing; shall be for personal use only

1 3 1

Additional Property Guidelines • Leaseholds/Land Trusts and Co-ops are not permitted • Non-permitted additions/alterations must follow FHA guidelines

1 3 2

Additional Property Guidelines •Lot size cannot exceed five (5) acres maximum • Properties must meet the requirements of FHA and the California Health and Safety Code

1 3 3

• Defects and/or repair conditions identified by the appraiser on the appraisal report must be corrected prior to purchase

•All units must be complete with respect to construction or repairs and ready to occupy

1 3 4

Property Flipping • FHA first-mortgage under-writing guidelines apply CalHFA requires a copy of all appraisals as required by FHA. When multiple appraisals are required, CalHFA will base the subordinate loan amount(s) on the lesser of the sales price or lowest appraised value.

1 3 5

Maximum Loan Amount The maximum loan amount (excluding UFMIP) cannot exceed FHA loan limits for the county in which the property is located.

1 3 6

FHA High Balance Loan Limits All loans with a base loan amount exceeding $424,100 will be subject to an additional fee.

1 3 7

Maximum Sales Price Limits The Sales Price of the home cannot exceed CalHFA Sales Price Limits for the county in which the property is located.

1 3 8

Qualifying Income vs. Program Compliance Income Qualifying income is the income used by the underwriter to determine that the borrowers have the ability to meet their monthly obligation.

This income may differ from the income used by CalHFA for program compliance purposes. All sources of income must be used to determine program compliance income limits.

1 3 9

Maximum Program Compliance Income Limits The income of all borrowers cannot exceed the published CalHFA income limits detailed in this program handbook established for the county in which the property is located.

1 4 0

Maximum Program Compliance Income Limits CalHFA will calculate family income for CalPLUS FHA loan eligibility. “Family income” is defined as the annualized gross income of a mortgagor, and any other person who is expected to: 1. be liable on the mortgage 2. be vested on title; and 3. live in the residence Due to federal regulations, CalHFA is required to compile all information regarding borrower’s income.

1 4 1

Family income includes: Gross pay, Overtime, Bonuses, Commissions,Part-time employment, Dividends, Interest, Annuities, Deferred income Welfare payments, Disability payments Alimony, Social security benefits, Child support payments, Veterans Administration (VA) compensation, Pensions, Human assistance/ services, Gross rental or leased income, Unemployment compensation, Any regularly occurring additional income, Sick pay, Income received from Trust or Business & Investments from all sources (both taxable and non-taxable) including but not limited to earnings

142

Family income excludes: • Gifts – casual, sporadic or irregular • Lump sum additions to household assets, such as inheritances, insurance settlement, capital gains, student financial assistance, settlements for personal or property losses

1 4 3

Family income excludes: • Education scholarships paid directly to the student • Foster child care payments, adoption assistance payments if not used to credit qualify for the loan

• Income from household members not on title or the loan • Food stamps

1 4 4

Qualifying Ratios The maximum total Debt-to-Income (DTI) ratio cannot exceed 45.00% for automated underwriting or 43.00% for manual underwriting.

1 4 5

Minimum Credit Score • Credit Score 640 o Manually Underwritten loans: 660 o Manufactured Housing: 700

1 4 6

Minimum Credit Score • A borrower with no credit score may be eligible as long as an occupant borrower(s)has a credit score that meets the minimum representative credit score requirement

1 4 7

Minimum Credit Score • When all borrowers have a credit score, they must meet the minimum representative credit score requirements. The middle score of the lowest-scoring borrower should be used to determine eligibility

1 4 8

Minimum Credit Score o If a tri-merged credit report is used, use the middle score o If a merged credit report only returns two scores, use the lower score o If a merged credit report only returns one score, that score must be used

1 4 9

ZERO TO LITTLE MONEY DOWN Bob Wages Jackies Wages Rental Income Total Inc.

$ $ $ $

3,000.00 3,500.00 6,500.00

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

$ $ $ $ $ $

2,396.91 300.00 150.00 2,846.91

Saving account

$500

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

$ $ $

2,846.91 3,025.00 5,871.91

Total income Total Cost of Living Disposable income

$ $ $

6,500.00 5,871.91 628.09

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

Cash Requried to Closed: Down payment Closing cost Total Down ZIP Closing Cost Credit My Home Total Credit

$ 350,000 0.035 $ 12,250 $ 337,750 1.75% $ 5,911 $ 343,661 Rate: 4.25%APR: 5.798% $ 1,691 1.25% $ 365 0.35% $ 102 0.85% $ 239 $ 2,397

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

$ 2,396.91 $ $ $ 6,500.00 37%

Total Debt to Income Ratio.

Montly Debt $ 2,846.91 Montly Income $ 6,500.00 BACK DR 44%

3.50% $ 12,250.00 4% $ 12,250.00 $ 24,500.00 -4% $ (12,250.00) -3.50% $ (12,028.12) $ (24,278.12)

Total Cash Required

$

221.88

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

$ $ $

350.00 500.00 100.00

Total Out of Pocket Exp:

$

1,171.88

150

CAL HFA PROGRAMS

151

MORTGAGE CREDIT CERTIFICATE TAX CREDIT PROGRAM (MCC) Allow the Government to Pay you to Buy a Home

By Eric Lawrence Frazier MBA NMLS 461807 CAL | BRE 01143484

GOVERNMENT HOMEOWNERSHIP INITIATIVE The government doesn’t want homeownership to be something only the rich can achieve.

This is why there are programs in place to make buying a home more accessible to low-and middle-income families.

The MCC Program is one such program.

GOVERNMENT HOMEOWNERSHIP INITIATIVE Low-and middle-income families who want to buy homes may be able to get a Government bond loan.

Bond loans are issued by state and local authorities and subsidize the cost of becoming a homeowner for those who meet certain income requirements, either by lowering interest rates or offering cash assistance.

GOVERNMENT HOMEOWNERSHIP INITIATIVE States and Municipalities can issue mortgage credit certificates (MCCs in place of, or as part of, their authority to issue mortgage revenue bonds.

WHAT IS A MORTGAGE REVENUE BOND? A mortgage revenue bonds is like any other type of government bond in that they have a maturity date and an interest rate.

Investors who buy the bonds receive regular interest payments that are tax-exempt.

A state or local government may decide to sell mortgage revenue bonds to raise money for programs that subsidize the cost of buying a home.

WHAT IS A MORTGAGE REVENUE BOND? The government uses the money raised from the sale of mortgage revenue bonds to lower the cost of buying a home for community members who otherwise might not be able to afford it.

Because they’re partially backed by mortgages, bond loans are also known as mortgage revenue bond loans.

MORTGAGE REVENUE BOND ARE IMPORTANT The government can say to a bank or other lender, “Please make x number of home loans available to people with y income and we will partially back those loans with our government money.�

Lenders who might otherwise have declined to offer loans to low- and middle-income applicants will take the government backing and extend home loans to low to moderate income applicants.

With out bonds and other subsidies the rate of homeownership will continue to fall for minorities.

MORTGAGE CREDIT CERTIFICATE – TAX CREDIT PROGRAM The MCC Tax Credit Program is a federal credit which can reduce potential federal income tax liability, creating additional net spendable income which borrowers may use toward their monthly mortgage payment.

This MCC Tax Credit program enables first-time homebuyers to convert a portion of their annual mortgage interest into a direct dollar for dollar tax credit on their U.S. individual income tax returns.

HERE IS HOW IT WORKS MCCs enable an eligible first-time homebuyer’s to obtain a mortgage secured by their principal residence and to claim a federal tax credit of 20% of the mortgage interest payments.

HERE IS HOW IT WORKS FUTURE Purchase 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

Cash Requried to Closed: Down payment Closing cost Total Down 3 Months PITIMI Reserves Total Cash Required to Close: Lenders Interest Credit Seller Credit Total Credit Total Cash Required

1 unit 0.035 0.0175 Rate: 4.25% 0.0125 0.0035 0.0085

$ 439,000.00 $ 15,365.00 $ 423,635.00 $ 7,413.61 $ 431,048.61 APR: 5.798% $ 2,121.00 $ 457.29 $ 128.04 $ 300.07 $ 3,006.41

3.50% $ 15,365.00 4% $ 17,560.00 $ 32,925.00 $ $ 32,925.00 -2% $ (8,780.00) -2.00% $ (8,780.00) $ (17,560.00) $ 15,365.00

MCC Credit Calculation Loan Amount Note Rate: Total Interest MCC Tax % MCC Tax Credit 12 months Mo. Tax Credit

$ $

$

431,048.00 4.25% 18,319.54 20% 3663.908 12 305.33

Total Payment PITI Mo. Tax Credit Benefit Mortgage Payment after Tax

$ $ $

3,006.41 305.33 2,701.08

2017 Personal Income Taxes Due: MCC Tax Credit Federal Tax Due

$ $

3,663.90 3,663.90 ZERO

MCC TAX CREDIT BENEFITS Tax Credit can roll forward three years.  For Example: If your tax credit is 3,000. You have 3 years to use it if you have no tax liability. $9,000 in total tax credit is saved but at the end the 3rd year it is gone.  Talk with your CPA and make sure you are maximizing the benefit. Increase your exemptions and take home more income.  The tax benefit never expires. As long as you own the home you get the benefit.

MCC TAX CREDIT BENEFITS What if you sell your home?

Recapture Tax: Three things need to happen to owe a recapture tax?

1. Sell within 9 years 2. Gain on the sale 3. Your income has to increase 5% over the income limits every year.  Make 40k but income limit is 60k your income had to increase 5% a year over the income limit for the county.  All three of things have to happen or the recapture does not apply.

Doesn’t apply to most people.

ELIGIBILITY REQUIREMENTS Eligibility requirements for all CalHFA programs: You must be a U.S. citizen, permanent resident or other qualified alien.

You will need to meet credit, income limits and loan requirements of the CalHFAapproved lender and the mortgage insurer.

You will need to live in the home you are purchasing for the entire term of the loan, or until the home is sold or refinanced.

CalHFA borrowers must complete homebuyer education counseling and obtain a certificate of completion through an eligible homebuyer counseling organization.

CalHFA's down payment programs MCC require that you to be a first-time homebuyer.

FIRST TIME HOME BUYERS ONLY If you've never owned a home, you're a first-time homebuyer.

It also means that if you owned your home three or more years ago, but sold it, you are right back to being a first-time homebuyer again.

HOMEBUYER EDUCATION REQUIREMENT CalHFA firmly believes that homebuyer education is critical to the success and happiness of a homeowner CalHFA will accept hard or online copies of homebuyer education counseling certificates.

Who has to take this Homebuyer Education course?  Only one occupying first-time borrower on each loan transaction.

How do I take this education course?  ONLINE: You can take eHome's eight-hour Homebuyer Education course online  Cost: (fee: $50)  Webstie: https://www.ehomeamerica.org/calhfa

eHome America Education Administrators : support@ehomenetwork.org 844-243-4663 500 Capitol Mall, Suite 1400 Sacramento, California 95814 Phone: 844-243-4663 Email: support@ehomenetwork.org Website: http://www.calhfa.ca.gov IN-PERSON: face-to-face Homebuyer Education through NID, Springboard, NeighborWorks America or any HUD-Approved Housing Counseling Agency (fee: varies by agency)

CALHFA – FHA & CONVENTIONAL PROGRAM Borrower Requirements: Occupy the property as a primary residence; non-occupant co-borrowers are not allowed.

CalHFA borrowers must complete homebuyer education counseling and obtain a certificate of completion through an eligible homebuyer counseling organization.

Middle Credit Score: 640 Max. DITI: 45% Max. LTV 97% CLTV 105% Meet CalHFA income limits for this program.

PROPERTY REQUIREMENTS Sales price of the home cannot exceed CalHFA's sales price limits established for the county in which the property is located Be a single-family, one-unit residence, including approved condominium/PUDs

Guest houses, granny units and in-law quarters may be eligible

ADDITIONAL PROPERTY GUIDELINES Condominiums must meet the guidelines of the first mortgage Manufactured housing is not permitted There is a five acre maximum on the size of the property Leaseholds/Land Trusts and Co-ops are not permitted Meet the requirements of the mortgage insurer/guarantor

ELIGIBLE COUNTIES The CalHFA MCC Tax Credit program will be available in all areas where an MCC is not currently available through a CalHFA partnering county at the time the loan is originated.

Find out if the CalHFA MCC program is available in your area by viewing this MCC County Resource List.

CALHFA MCC PROGRAM MCC COUNTY RESOURCE LIST

2016 MCC RESOURCE FOR CALHFA

2016 MCC RESOURCE FOR CALHFA

2016 MCC RESOURCE FOR CALHFA

2016 MCC RESOURCE FOR CALHFA

2016 MCC RESOURCE FOR CALHFA

2016 MCC RESOURCE FOR CALHFA

CALHFA MCC PROGRAM 2016 SALES PRICE LIMITS

FEDERALLY DESIGNATED TARGETED AREAS What is a Targeted Area?

Areas that are "targeted" by the Federal Government were identified in the 2010 Census as areas in California where 70 percent of the families who live there earn an income that is 80 percent or less than the statewide median income.

Forty-five (45) of California's 58 counties have targeted areas - with 37 percent of the areas located in Los Angeles County.

While cities, counties and other governmental agencies may also have specific areas in their jurisdiction "targeted" for other program purposes, only those census tracts identified by the Federal Government as "targeted" are used for CalHFA's purposes, as it relates to a waiver of the first-time homebuyer requirement on the MCC program, sales price limits and certain income limits

CALHFA MCC PROGRAM FHA 2016 INCOME LIMITS

CALHFA MCC PROGRAM CONVENTIONAL 2016 INCOME LIMITS

PURCHASE YOUR HOME WITH JUST 1% DOWN 1 MONTH’S RENT COULD GET YOU INTO YOUR DREAM HOME 189

1% DOWN-PAYMENT 97% Loan To Value – 3% Down Payment Lender Contributes 2% of 3% down payment FICO 700 Minimum 1x30 day late if FICO >=720, otherwise 0x30.

DITI 43% Maximum Loan $424,100 Maximum No Mortgage Insurance with Pay Advantage Single Family Residence only – Manufacture home no eligible 190

1% DOWN PAYMENT Owner Occupied Cannot own other property at the time of purchase.

Income Limits established by FHLMC Loan Prospector No Income Limits if property located in underserve area.

191

3% TO 5% DOWN PAYMENT | FHLMC FICO 640

 1x30 Day late in the last 12 months >680

Non – Occupied Co borrower not eligible First Home Buyer Class Required if you are a FTHB.  You do not have to be a FHTB to participate in the program.

HOME POSSIBLE - 95% LTV / 95% CLTV  2 to 4 unit Not Eligible  Secondary Financing allowed to 95% CLTV

FICO 700 HOME POSSIBLE ADVANTAGE - 97% LTV / 97% CLTV  2 to 4 units Not Eligible  No Secondary Financing allowed

192

193

3% DOWN PAYMENT | FNMA FICO 640 Non – Occupied Co borrower not eligible First Home Buyer Class Required for at least one borrower.  You do not have to be a FHTB to participate in the program.

HOME READY - 97% LTV / 105% CLTV 2 Units allowed 85% LTV /105% CLTV  Secondary Financing allowed to 105% CLTV

FICO 700 HOME READY PAY ADVANTAGE - 97% LTV / 97% CLTV –  2 Units allowed 85% LTV/105 CLTV  Secondary Financing allowed  No Manufacture homes

194

THE VA HOME LOAN THE BEST LOAN PROGRAM IN THE MARKET PLACE Eric L. Frazier MBA President and CEO CAL BRE 01143485 NMLS 461807 800-401-8994 x 703 The Power Is Now Inc. CAL BRE 1980407 NMLS 1435243

195

VA HOME LOAN The original Servicemen’s Readjustment Act, passed by the United States Congress in 1944, extended a wide variety of benefits to eligible veterans. – Under the law, as amended, the VA is authorized to guarantee or insure home, farm, and business loans made to veterans by lending institutions.

196

VETERANS The total Veteran population in 2014 was about 22.0 million.

About 5.0 million or 22.6 percent of the total Veteran population were minority Veterans.

All minority groups have a steady increase from 2014 to 2043.

The two largest cohorts, Hispanic and Black Veterans will experience the largest growth of 7.4 and 3.3 percentage points from 2014 to 2043.

197

VETERANS The total Veteran population is projected to decrease from 22.0 million in 2014 to 14.5 million in in 2043.

This drop is about 7.5 million Veterans or 33.9 percent of the total Veteran Population in almost 30 years.

During this same timeframe, the number of minority Veterans is projected to increase from 5.0 million in 2014 to 5.2 million in 2043 or about 4.5 percent increase.

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MINORITIES IN THE MILITARY According to data from the 2014 Veterans Population Projection Model, 5.0 million Veterans in the United States and Puerto Rico were minorities.

Minorities represented about 22.6 percent of the total Veteran population in 2014.

Over forty-three percent of all minority Veterans have served during the Gulf War Era (August 1990 to the present).

In 2014, 52.0 percent of minority Veterans were Black non-Hispanic, compared with 32.0 percent of non Veteran minorities.

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MINORITIES IN THE MILITARY The median age of minority Veterans in 2014 was 55, compared with 39 for nonVeteran minorities.

Minority Veterans were more likely to have been married than non-Veteran minorities.

In 2014, 83.2 percent of minority Veterans were currently married, divorced, widowed, or separated compared with 58.1 percent of non-Veteran minorities.

In 2014, among those who have been married, 19.3 percent of minority Veterans were currently divorced compared with 9.5 percent of non-Veteran minorities.

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THE POWER IS NOW MORTGAGE SERVICES

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VA HOME LOAN • Big Opportunity to Help Our Vets – Currently there are 21.6 million veterans and only 2.5 million loan in servicing.

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VA LOAN LIMITS VA's 2017 Loan Limits are the same as the Federal Housing Finance Agency's limits 2017 Loan Limits (Effective January 1, 2017).

For purposes of determining the VA guaranty, lenders are instructed to reference only the One-Unit Limit column in the FHFA (Federal Housing Finance Agency) Table “Fannie Mae and Freddie Mac Maximum Loan Limits for Mortgages Acquired in Calendar Year 2017 and Originated after 10/1/2011 or before 7/1/2007�.

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VA LOAN LIMITS VA does not set a cap on how much you can borrow to finance your home.

The loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment and vary by county, since the value of a house depends in part on its location.

The basic entitlement available to each eligible Veteran is $36,000. Lenders will generally loan up to 4 times a Veteran's available entitlement without a down payment, provided the Veteran is income and credit qualified and the property appraises for the asking price.

VA HOME LOAN • Purchase/Refinance/Construction 1 to 4 Units – VA loans may be used to finance the purchase or construction of a one- to four-unit residence.

– Can’t be used for investor loans.

– Veteran must occupy home.

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VA HOME LOAN • Features and Benefits – – – – – – –

No down payment required (100% financing).

No maximum loan amount set by VA. No maximum income limits.

Less stringent qualifying standards.

Can be fixed-rate loan or ARM. No mortgage insurance required.

No reserves after closing required.

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VA HOME LOAN • Features and Benefits – Lender may charge flat fee of no more than 1% of amount financed to cover cost of making loan.

– No prepayment penalties.

– Can be assumed by creditworthy buyer, veteran or non-veteran.

– Forbearance extended to veterans in financial difficulties.

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VA HOME LOAN • No Mortgage Insurance – Instead of mortgage insurance premiums, VA borrowers must pay VA a funding fee to defray administrative costs of loan program.

– Funding fee is percentage of loan amount.

– Can be paid at closing or financed.

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VA HOME LOAN • VA Funding Fee - First Time Use Down Payment – Less than 5%* – 5% to 9.99% – 10% or more

Veteran/Active Duty 2.15% 1.50% 1.25%

Reservist/Nat. Guard 2.40% 1.75% 1.50%

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VA HOME LOAN • VA Funding Fee - Second Time Use Down Payment – Less than 5%* – 5% to 9.99% – 10% or more

Veteran/Active Duty 3.30% 1.50% 1.25%

Reservist/Nat. Guard 3.30% 1.75% 1.50%

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VA HOME LOAN FUNDING FEE • Exempt from funding fee requirement: • Veterans entitled to receive VA compensation for service-related disabilities.

• Surviving spouses of veterans who died in service or from servicerelated disabilities.

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VA HOME LOAN ELIGIBILITY • Eligibility for VA loans is based on length of active duty service in U.S. armed forces.

• Honorably discharged veterans who served: • • • • • •

2 years on active duty 6 years in the Reserve/National guard POW’s held in captivity for 90 days of more 90 days of wartime duty when called up or ordered under U.S.C. Title 10 (this US code must appear on DD214).

181 days of peacetime duty called up under U.S.C. Title 10 Some unmarried surviving spouses 215

VA HOME LOAN CERTIFICATE OF ELIGIBILITY • Obtaining your COE • VA Form 26-1880 • Proof of service documentation (DD214, active duty statement of service or Reserve/National Guard points statement) • If veteran had previous VA home that was sold, a copy of the HUD1 Settlement Statement

VA has an automated system used by all lenders to obtain an online certificate of eligibility 216

VA Multi Unit Strategy How to buy a 2 – 4 Unit Property as FTHB

MULTI UNIT STRATEGY As housing prices have begun to stabilize in most parts of the country and home sales are on the rise, Demand for rental property is on the rise. Housing demand has also allowed landlords to demand higher rents.

The combination of low rates and higher available rent means it’s possible that part or all of your mortgage payment can be paid for by a renter.

How can this happen?

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PURCHASE A MULTI-UNIT PROPERTY Live in One Unit and Rent out the Other 219

DOWN PAYMENTS LESS THAN 20% ON 2-4 UNIT PROPERTIES Don’t have a 20% down payment?

FHA loans require only 3.5% down on 2-4 unit properties.

If you are eligible for a VA home loan, you may qualify for a zero-down loan of up to $1 million in some areas.

Conventional loan requires a higher down payment amount: 2-unit: 15% down payment required 3-unit: 25% down payment required

4-unit: 25% down payment required

MULTI-PLEX LOAN LIMITS Conventional and Government loans allow higher maximum loan amounts when buying a 2-4 unit property.

Multi-unit homes tend to be more expensive than 1-unit homes, so lending agencies take this into account when setting loan limits.

MULTI-PLEX LOAN LIMITS For example, High Balance Conventional & Gov. loans in Orange County, California allow a loan of up to $636,150 on a single-family home, but up to $1,223,475 on a 4-unit property.

What if you can buy a 4 unit property with No Money Down!!!!

CAPTAIN BOB AND JACKIE RENTIER MILITARY FIRST TIME HOMEBUYERS 223

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

$ $ $ $

6,000.00 5,000.00 11,000.00

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

$

2,000.00

$ $ $ $ $

300.00 400.00 250.00 416.00 3,366.00

401k Retirement Checking/Savings Total

$ $ $

50,000.00 3,000.00 53,000.00

CAPTAIN 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

$ $ $

3,366.00 3,025.00 6,391.00

Total income Total Cost of Living Disposable income

$ $ $

7,500.00 6,391.00 1,109.00

DOES NOT USE HIS VA

CAPTAIN BOB AND JACKIE RENTIER Renting an Apartment

Buying a House FHA

Current Housing DR. Mortgage Payment Rent Vacancy 25% Rental Income (adjusted) Wage Income Total Income Front DR

$ $ $ $ $ $

2,000.00 11,000.00 11,000.00 18%

Total Debt to Income Ratio.

Montly Debt Montly Income Back DR

$ $

3,366.00 11,000.00 31%

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

4 Units $ 800,000.00 0.035 $ 28,000.00 $ 772,000.00 0.0175 $ 13,510.00 $ 785,510.00 4.25% / 5.798% $ 3,798.00 0.0125 $ 833.33 0.0035 $ 233.33 0.0085 $ 556.40 $ 5,421.07

CAPTAIN BOB AND JACKIE RENTIER Buying a 4 Unit Property Current Housing DR. Mortgage Payment Rent Income Vacancy 25% Rental Income (adjusted) Wage Income Total Income Front DR Total Debt to Income Ratio.

Montly Debt Montly Income Back DR

Buying a 4 Unit Property FHA $ 5,421.07 $ 6,300.00 $ 1,575.00 $ 4,725.00 $ 11,000.00 $ 15,725.00 34%

$ 6,787.07 $ 15,725.00 43%

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

Self Sufficiency Ratio Rental Unit A. (LIVE) Rental Unit B. Rental Unit C Rental Unit D Total Mortgage PITI DSCR 1:11

4 Units $ 800,000.00 0.035 $ 28,000.00 $ 772,000.00 0.0175 $ 13,510.00 $ 785,510.00 4.25% / 5.798% $ 3,798.00 0.0125 $ 833.33 0.0035 $ 233.33 0.0085 $ 556.40 $ 5,421.07

$ $

1,900.00 1,900.00

$ $ $ $

2,200.00 2,200.00 8,200.00 5,421.07 1.51

CAPTAIN BOB AND JACKIE RENTIER Cash Required to Buy

Initial Out of Pocket Expenses

Cash Requried to Closed: Down payment Closing cost Total Down 3 Months PITIMI Reserves Total Cash Required to Close:

3.50% $ 28,000.00 4% $ 32,000.00 $ 60,000.00 $ 16,263.21 $ 76,263.21

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

$ 1,000.00 $ 750.00 $ 100.00

Lender Credit Seller Credit Total Credit Total Cash Required

-1.00% $ (8,000.00) -3.00% $ (24,000.00) $ (32,000.00) $ 44,263.21

Total Out of Pocket Exp:

$ 1,850.00

Cash Needed to Close:

$ 46,113.21

CAPTAIN 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

$ $ $

6,787.07 3,025.00 9,812.07

Total income Total Cost of Living Disposable income

$ $ $

17,300.00 9,812.07 7,487.93

DECIDES TO USE HIS VA

CAPTAIN BOB AND JACKIE RENTIER Renting an Apartment

Buying a House VA LOAN FUTURE Purchase Price Down Payment Loan Amount VA FUNDING FEE Total Loan Amt. Interest Rate/APR Principal and Interest Taxes Home Ins. Mortgage Ins. Total Payment PITI

4 Units $ 800,000.00 0 $ $ 800,000.00 0.0215 $ 17,200.00 $ 817,200.00 4.25% / 5.798% $ 3,798.00 0.0125 $ 833.33 0.0035 $ 233.33 0 $ $ 4,864.67

CAPTAIN BOB AND JACKIE RENTIER Buying a 4 Unit Property Current Housing DR. Mortgage Payment Rental Income Vacancy 25% Rental Income (adjusted) Wage Income Total Income Front DR Total Debt to Income Ratio.

Montly Debt Montly Income Back DR

Buying a 4 Unit Property VA Loan $ $ $ $ $ $

$ $

4,864.67 6,300.00 1,575.00 4,725.00 11,000.00 15,725.00 31%

6,230.67 15,725.00 40%

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

Self Sufficiency Ratio Rental Unit A. (LIVE) Rental Unit B. Rental Unit C Rental Unit D Total Mortgage PITI DSCR 1:11

4 Units $ 800,000.00 $ $ 800,000.00 0.0215 $ 17,200.00 $ 817,200.00 4.25% / 5.798% $ 3,798.00 0.0125 $ 833.33 0.0035 $ 233.33 0 $ $ 4,864.67 0

$ $

1,900.00 1,900.00

$ $ $ $

2,200.00 2,200.00 8,200.00 4,864.67 1.69

CAPTAIN BOB AND JACKIE RENTIER Cash Required to Buy

Initial Out of Pocket Expenses

Cash Requried to Closed: Down payment Closing cost Total Down 3 Months PITIMI Reserves Total Cash Required to Close:

0.00% $ 4% $ 32,000.00 $ 32,000.00 $ 14,594.00 $ 46,594.00

Lender Credit Seller Credit Total Credit Total Cash Required

-1.00% $ (8,000.00) -3.00% $ (24,000.00) $ (32,000.00) $ 14,594.00

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

$ 1,000.00 $ 750.00 $ 100.00

Total Out of Pocket Exp:

$ 1,850.00

Cash Needed to Close:

$ 16,444.00

CAPTAIN 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

$ $ $

6,230.67 3,025.00 9,255.67

Total income Total Cost of Living Disposable income

$ $ $

17,300.00 9,255.67 8,044.33

VA PROGRAM SUMMARY

NONE PRIME PROGRAMS Where there is a Will there is a Way to Buy a Home

By Eric Lawrence Frazier MBA NMLS 461807 CAL | BRE 01143484

ATR – ABILITY TO REPAY LOANS – NO INCOME DOCS Qualify with enough Liquid Assets to cover the loan balance!

NO MONTHLY INCOME REQUIREMENT! Asset Based Nothing on the 1003 for Income Nothing on the 1003 for employment 60 days for Statements on the assets – Nothing going out only coming in.

No prepayment penalty – payoff any time.

ATR – ABILITY TO REPAY LOANS – NO INCOME DOCS Highlights: Employment is not required.

You Only Need to Show Two Months of the Qualifying Account Statement Up to 75% LTV - Purchase or C/O Refinance

Fico 600+ Owner Occupied or Investment

ATR – ABILITY TO REPAY LOANS – NO INCOME DOCS How the loan is Calculated: If the total assets cover the loan balance you’re done!

Product Type:  First Position Mortgages  30-Year Fully Amortized Term  7/1 Hybrid ARM - 7-Year Fixed Period followed by a 23-Year Adjustable Rate Period set to the 1- Year CMT Index, or a 30-Year Fixed  No Prepayment Penalty  Must have Impounds  Payments are PITI

NON PRIME LOANS No Income Verification Verified Assets Required Property to be cashflow positive  80% of fair market rents.  Negative cashflow X 84 months = Assets required to qualified  Assets must be seasoned for 2 months.

FICO 600 to 75% Purchase or Refinance Homes recently listed for sale - No Problem Lack of Trade lines or only one credit score – No Problem

No Reserves - No Problem

NON PRIME LOANS $2,000,000 Maximum loan amount Interest Only payment available No Pre Payment Penalties State Income for 1 – 4 unit properties: Investment or Business purpose owner occupied

Foreign Nationals Cross Collateralization – 2 properties in the same county. Cannot sell the property until the loan is paid Fix & Flip 65% LTV to 75% Rehab 25k to 50k 9 months seasoning on the loan before refinance

ALT –A RESIDENTIAL PROGRAMS 90% LTV – 24 MONTHS SEASONING 2yrs from Foreclosure, 2yrs from Short Sale, 2yrs from Bankruptcy Interest Only Available Up to $3,000,000 Loan Amounts Max 43% Back End Ratio Reserves: 12 Mos. if loan is greater than 80 LTV

QUALIFY WITH BANK STATEMENT - PROGRAMS Personal Accounts qualify with

 100% of Deposits for Personal Statements!

Business Accounts qualify with

 50% of Deposits for Business Statements!

Don’t look at Withdrawals!

Don’t look at Overdrafts! No P&L! No Reserves! No 4506T! 12 to 24 Months of Statements  Owner Occ. w/600 Fico, Non Owner & 2nd Homes w/500 Fico  Self Employed and 1099 borrowers only

Only 6 NSF’s in the most recent 12 months 9 NSF’s in the last 24 months

ASSET DEPLETION Use 100% of Liquid Assets to qualify 7yrs or 84 Months of PITI & Liabilities!

75% max LTV 600 min Fico Rates range from 6.99 to 8.99% - FICO Driven

ONE DAY OF FORECLOSURE, ETC..

500+ FICO MTG 0x120 - 12 MO

MARGIN: 7.950%

FORECLOSURE ≥ SETTLED

Maximum Debt-to-Income Ratio

SHORT SALE / DIL ≥ SETTLED

50% Back End

BANKRUPTCY ≥ SETTLED

Index & Adjustment Caps

Loan Terms

Floored at Start Rate / 1-Year CMT

30-Year Amortized & Term - 7/1 Hybrid ARM or 30-Yr Fixed

2.0% Initial Change Cap / 2.0% Annual Cap / 6.0% Life Cap

All Loans require impounding for Taxes & Insurance

LTV MAX 65% CLTV*

50% 8.250% 1 POINT 60% 8.375% 1 POINT 65% 8.750% 1 POINT

The PowerPoint Presentations Are Available Now http://thepowerisnow.com/events/ Download Mobile App & the flyers on the program you are interested in Get started with your loan application online Tonight Buyers: www.applytobuynow.com Real Estate agents: www.neverleaseagain.com Need help?: www.neverrentagain.com

Eric L. Frazier MBA President and CEO CAL BRE 01143485 NMLS 461807 800-401-8994 x 703 The Power Is Now Inc. CAL BRE 1980407 NMLS 1435243

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