The power is now 1% down payment program

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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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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MISSION The mission of the Power of Now Inc., is to inspire, educate, and empower real estate professionals, and consumers to build wealth through real estate with information, services and support that will give them the power to act now for their future.

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VISION The vision of the Power is Now is to be a powerful resource for real estate professionals, and consumers to buy and/or sell real estate to achieve their personal, family and business goals to build wealth and leave an inheritance and legacy for their family.

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OUR COMPANY SLOGAN IS OUR NAME The Power Is Now! We are at our best and we maximize our success when we act now.

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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

THE POWER IS NOW WEALTH INITIATIVE • 1.

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Five Objectives: Knowledge - Knowledge is the Power you need to build wealth.

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Knowledge always comes before money or the money will soon be gone.

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Commitment requires disclipine and discipline requires a budget and accountability

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Real Property appreciates. Personal property depreciates.

Commitment to Financial Independence – We must take Individual responsibility for our lives.

Investment in real estate - We must prioritize ownership in real property as opposed to personal property.

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THE POWER IS NOW WEALTH INITIATIVE 4.

Financial and Credit Management - We must live within our means and not abuse credit.

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Credit is not income - It is a convenience for cash.

Good credit is the beginning of building wealth. Good credit is a Fico Score of 720 to 799 higher. Great credit is 800 to 850.

Creating Wealth - We must save money to buy real estate & other assets that appreciate in value.

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Buy and Hold, or Buy, Sell and Buy again and hold - building a legacy of wealth.

We must be intentional about leaving a legacy of wealth and an inheritance for our family.

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10 POINT WEALTH BUILDING PLEDGE www.thepowerisnow.com 15

THE STATE OF HOUSING ON THE DECLINE FOR AFRICAN AMERICANS 16

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

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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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WHAT IS WEALTH? All families need wealth to be economically secure and create opportunities for the next generation. What is wealth? â—? Wealth is what we own minus - what we owe â—? Generational Wealth allows families/individuals to: o Move to better and safer neighborhoods o Invest in business o Invest in our community o Save for retirement o Send our children to college. o Leave an inheritance & legacy 20

WEALTH IS THE DIFFERENCE WEALTH PROVIDES A MEASURE OF SECURITY WHEN A JOB LOSS OR PERSONAL CRISIS OCCURS 21

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) 23

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

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They have the farthest to climb to get back into the home ownership before home values get back to their pre-recession prices.

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

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LESSONS LEARNED - GREAT FINANCIAL CRISIS 1.

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We must save money – Make it your #1 priority now and not later.

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

We must stop long term financing vehicles - Pay cash or limit financing to 12 mos.

We must become debt free – Save your money to buy what you want. Stop begging for what you need.

6. We must buy real property – Buy house before you buy an expensive personal property or car.

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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1994 Blacks & Hispanic Homeownership Rates: 40 & 42% respectively.

2004 Blacks achieved a high of 50% 2014 Blacks were at 42.5% and Hispanics 43.5% Hispanics.

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THE STATE OF HOUSING FOR MINORITIES •

The homeownership rate in the U.S. is 62.9 percent overall. The rate among whites is 71.5%, Asians, 53.7%, Hispanic 45.1%, African Americans 41.7%

THE STATE OF HOUSING BY AGE •

The homeownership rate by Age of Householder. Under 35 - 34.1 percent, 35 to 44 - 58.3 percent, 45 to 54 - 69.1 percent, 55 to 64 - 74.7 percent, 65 and over - 77.9 percent.

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!

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It’s time to take action and personal responsibility.

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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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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 POWER IS NOW MORTGAGE SERVICES FHA/VA Home Loan Program FHA/VA Loan Limits Multi Unit Strategy 1% Down Payment Conventional Mortgage Help and Sapphire Mortgage Program

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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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2017 MORTGAGE LIMITS FHA INSURED LOANS

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FHA AREA BETWEEN FLOOR & CEILING

FHA AREAS AT CEILING – 2017

FHA 203B • Down Payment:

o 10% down payment 500 to 579 FICO o 3.5% down payment 580 +

• Minimum Credit Scores:

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

• Back to Work Program:

o 12 months seasoning on Foreclosure, Short Sales and Bankruptcy.

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FHA 203 B • 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% 1 to 3 month reserves may be required if AUS/DU approval is not granted o 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 o o o o

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FHA 203 B • Property Types: – – – –

OWNER OCCUPIED ONLY. 1 to 4 Units properties Condominiums/Town Homes/PUD – FHA approved.

SFR – Fixer Upper - 203k LOAN.

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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.

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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.

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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�.

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 o VA loans may be used to finance the purchase or construction of a one- to four-unit residence. o Can’t be used for investor loans. o Veteran must occupy home.

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VA HOME LOAN • Features and Benefits o o o o o o o

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 o Lender may charge flat fee of no more than 1% of amount financed to cover cost of making loan. o No prepayment penalties. o Can be assumed by creditworthy buyer, veteran or non-veteran. o Forbearance extended to veterans in financial difficulties.

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VA HOME LOAN • No Mortgage Insurance o Instead of mortgage insurance premiums, VA borrowers must pay VA a funding fee to defray administrative costs of loan program. o Funding fee is percentage of loan amount. o Can be paid at closing or financed.

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VA HOME LOAN • VA Funding Fee - First Time Use Down Payment Veteran/Active Duty Reservist/Nat. Guard 2.15% 2.40% o Less than 5%* 1.50% 1.75% o 5% to 9.99% 1.25% 1.50% o 10% or more

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VA HOME LOAN • VA Funding Fee - Second Time Use Down Payment Veteran/Active Duty Reservist/Nat. Guard 3.30% 3.30% o Less than 5%* 1.50% 1.75% o 5% to 9.99% 1.25% 1.50% o 10% or more

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VA HOME LOAN • VA Streamline Refinance / IRRL (interest Rate Reduction Refinance Loan) Type of Loan Veteran/Active Duty Reservist/Nat. Guard 0.50% 0.50% o 1st Time Use 0.50% 0.50% o 2nd Time Use

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VA HOME LOAN FUNDING FEE • Exempt from funding fee requirement: o Veterans entitled to receive VA compensation for service-related disabilities. o 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). o 181 days of peacetime duty called up under U.S.C. Title 10 o Some unmarried surviving spouses o o o o

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VA HOME LOAN CERTIFICATE OF ELIGIBILITY • Obtaining your COE

o VA Form 26-1880 o Proof of service documentation (DD214, active duty statement of service or Reserve/National Guard points statement) o 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 61

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1% DOWN-PAYMENT • • • • • • • •

97% Loan To Value – 3% Down Payment Lender Contributes 2% of 3%the down payment of 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 63

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.

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3 TO 5% DOWN PAYMENT • 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 65

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3% DOWN PAYMENT • 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 FICO 640 – 2 Units allowed 85% LTV /105% CLTV – Secondary Financing allowed to 105% CLTV

• HOME READY PAY ADVANTAGE - 97% LTV / 97% CLTV – FICO 700 – 2 Units allowed 85% LTV/105 CLTV – Secondary Financing allowed – No Manufacture homes 67

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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