3% INTERCAP LENDING GRANT PROGRAM
By Eric Lawrence Frazier MBA National Sales Manger, NMLS 461807
2
• Eric Lawrence Frazier, MBA, NSM • ICL Company Overview • HUD Programs • FHA 203B – 3.5% Down Payment
3
Eric L. Frazier, MBA National Sales Manager NMLS # 461807 • • • • • • • • • • •
Married 33 years 4 Daughters One in College., Three MBAs. All In Real Estate Born in Memphis Tenn. Native IE. SB. Residence Riverside 14 years. University of Redland Graduate Degrees: BSBAM, & MBA in Finance 33 years as Lender/Mortgage Banker 28 years as Real Estate Broker Co-Founder of Frazier Group Realty President of The Power Is Now Inc. Radio | TV | Magazine | Events | Financial Services President of The Power Is Now Foundation President of The OC Realtist (NAREB) BOD of California Assoc. or RE Brokers BOD of California African American Museum BOD of Project Tomorrow (k-12th Ed) 4
HISTORY OF INTERCAP LENDING
• From Asset Management to Lending • Suburban Mortgage Company of New Mexico 1978 • Direct FNMA, FHLMC, GNMA only 1% of lenders have these three key approvals • 1 Billion in servicing • Approved in 30 States
5
HISTORY OF INTERCAP LENDING
• Company Overview • Intercap Lending is a DBA of Suburban Mortgage Company of New Mexico, and our mission is to provide affordable home ownership opportunities while earning the trust of our employees, borrowers, realtors, builders and affinity partners. • Intercap Lending’s corporate offices are in Aliso Viejo, California, • We are a direct Fannie Mae, Freddie Mac and Ginnie Mae seller, servicer and issuer. Less than 1% of lenders nationwide have these three key investor approvals.
6
ICL 3% GRANT PROGRAM
• Intercap Lending has a proprietary down payment assistance loan program. • The down payment funds are not tied to any county, state or federal loan program. It is a grant – a gift to a borrower. • This grant can only be offered by Intercap Lending and is a HUD approved program under the FHA 203B and 203K FHA purchase transaction.
7
HUD HOUSING URBAN DEVELOPMENT
• US Department of Housing and Urban Development was Created through the US Housing Act of 1937. • FHA Provide mortgages insurance on loans made by FHA – approved Lenders. • Provides opportunities for Homeownership. • Housing assistance for low income persons. • Help to rehabilitate and maintain affordable housing. • Enforces Fair Housing Laws. • Helps the homeless. • Spurs economic growth in distressed areas. 8
INSURING AND ENDORSEMENT
• When an FHA loan closes, the lender collects and remits an up front MIP directly to HUD via wire transfer. • 1.75% MIP of the Loan Amount. • This fee funds the program and makes it possible for the American Dream to stay alive for many people.
9
GNMA
• Government National Mortgage Association. • GNMA is not a lender nor does it buy or sell mortgages. GNMA guarantees Residential Mortgage Backed Securities that are backed by pools of FHA and VA loans. • GNMAs are backed by the federal government.
10
ADVANTAGES OF FHA FINANCING
• • • • • •
Only an FHA – approved Lender can originate FHA loans. Property Types: 1 to 4 unit properties owner occupied. Purchases up to 96.5% LTV. Borrower Contributions 3.5% cash investment. 100% gift acceptable.
11
ADVANTAGES OF ICL 3% GRANT PROGRAM
• Reserves are not required on 1 and 2 unit properties. • FHA loans are fully assumable. • No income limitations. • FHA loans are for owner occupied borrowers only with one exception: • HUD own property • Non–owner occupied purchase at 85% LTV.
12
SINGLE FAMILY 203 B
• Single Family • Owner occupied • 1 to 4 units • PUD • Manufactured homes
13
ICL 3% GRANT PROGRAM
By Eric Lawrence Frazier MBA National Sales Manger, NMLS 461807
14
OVERVIEW
•
ICL provides Grant funds of 3% of the Mortgage Amount (Note Amount) to be used towards the down payment, for the purcha se of a primary residence. • Borrower’s down payment requirement reduces to .50% of the purchase price. The following Example: • •
FHA Requirement: 3.5% Down Payment. ICL FHA DAP requirement: .55% Down Payment. 15
EXAMPLE OF ICL 3% GRANT PROGRAM STANDARD FHA 203 B Purchase Price Down Payment Base Loan Amount: MIP Base Loan Amount Cosing Cost Total Cash needed: Down Payment Cosing Co Total Cash Needed Seller May Credit Buyer CC Down Payment Assistance Net Cash to Close:
ICL FHA DAP 3,50% 1,75% 2%
$300.000,00 $10.500,00 $289.500,00 $5.066,25 $294.566,25 $5.790,00
3,50% 1,75% 2%
$300.000,00 $10.500,00 $289.500,00 $5.066,25 $294.566,25 $5.790,00
3,50% 2%
$10.500,00 $5.790,00 $16.290,00
3,50% 2%
$10.500,00 $5.790,00 $16.290,00
2% 0%
$5.790,00 0 $10.500,00
2% 3%
$5.790,00 $8.836,99 $1.663,01
16
EXAMPLE OF ICL 3% GRANT PROGRAM
MORTGAGE PAYMENT Principle & Int. Mortgage Ins. Fire Insurance Property TownHM/Condo Total payment
RATE 4.0% 1.35% 0.35% 1.25%
$1432.25 $325.69 $84.44 $312.50 $2,154.88
17
EXAMPLE OF ICL 3% GRANT PROGRAM
• • •
No repayment required, and no subordinate lien is recorded, Grant funds are treated as a gift. Grant Funds are wired to closing, no separate funding required. No separate approval process required. Borrower’s eligibility de termined at time of underwriting.
18
NOT LIMITED TO FIRST TIME HOMEBUYERS
• • •
Program is not limited to first time buyers. Move up buyers must have verified equity if they desire to retain their home: Equity verification requirement on exit property of government is 25% on conventional loan 30%.
19
UNDERWRITING GUIDELINES
• • • • • • • •
Standard FHA underwriting guidelines apply. Primary Residence only. Fico Score normally 550 and up for standard FICO Score Exception is required on the .5% DAP MINIMUM FICO 640 30 year fixed interest rate only. SFR Only - 2 to 4 units are not eligible. Non-occupant co-borrowers are not permitted. Standard FHA underwriting guidelines apply.
20
UNDERWRITING GUIDELINES
• Eligible: 1 unit primary residences to include SFR’s, condos, PUD’s, attached & detached. • Ineligible: 2-4 units, Manufactured/Mobile homes and Co-ops. • Standard FHA underwriting guidelines apply. • Applicants who have not owned a home in the last in 3 years are required to submit the 8 hour Homebuyer Class Certificate pro gram at the time of underwriting.
21
UNDERWRITING GUIDELINES
• • •
Standard FHA underwriting guidelines apply. .55% must come from the borrower’s own funds. Max Debt To Income Ratio: - 640-679: Max DTI: 31/43% - 680-720: Max DTI: 45% - 720+ : Max DTI: 50%
22
UNDERWRITING INCOME
• • • •
Standard FHA underwriting guidelines apply. Income limits apply by county. All income of persons living in the household will be annualized and counted towards to income limit. Dependants reported on taxes will be compared to 1003 Appli cation. Underwriting will use the higher number to determine eligibility.
23
INCOME ELIGIBILITY The income used for qualifying will be as determined by underwri ting, annualized, for each borrower. Example #1: • • • • •
#1 Total number of persons in the household is 2. Borrower #1: monthly Income is $2350 per month. Borrower #2: monthly Income is $1850. Total income for the household: $4200/mo or $50,400 annually. The County they are buying in is Los Angeles which has a limit of $84,300 for a family of 2.
BORROWERS WOULD QUALIFY FOR THIS PROGRAM.
24
INCOME ELIGIBILITY The income used for qualifying will be as determined by underwri ting, annualized, for each borrower. Example #2: • • •
#2 Total number of persons in the household is 4, 2 borrowers with 2 children. Borrower #1: monthly income is $5000. Borrower #2: monthly income is $3200.
•
Total income for the household is $8200 monthly or $98,400 annually.
•
County they are buying in is Fresno which has a limit of $82,110 for 3 or more in the household. Borrowers would not qualify for this program.
BORROWERS WOULD NOT QUALIFY FOR THIS PROGRAM. 25
MORTGAGE HISTORY
• • •
All previous mortgages must be paid as agreed with zero lates and paid in full. VOR to verify current housing expense paid as agreed, if landlord is a private party non-institutional entity, 12 months canceled checks to verify rent paid as agreed will be required. Borrowers that do not have at least a verifiable 12 month history of making a housing payment are not eligible for this program.
26
NO RENTAL HISTORY
• • • • • •
Borrowers with no verifiable history of making a housing payment will be considered on a case by case basis. They must demonstrate a history of contributing to savings each month for the last 12 months preceding the date of application equal to what market rent would be. The average amount of these deposits will be used as the basis to determine what the payment shock will be. Payment Shock limited to 150%. Rent x 1.5= Maximum Mortgage Payment. Exception can apply for high income earners. 27
COUNTY LOAN LIMITS FOR THE ICL 3% GRANT PROGRAM No Minimum, Max loan amount is the lesser of $417,000 or the limit for the county where the property is located.
28
29
30
SPEEDY NEW APPROVAL PROCESS (SNAP)
31
WHAT IS THE SNAP USED FOR?
• •
You have all heard of a real estate transaction where the buyer’s loan went south resulting in a transaction that either closed late, or didn’t close at all. A SNAP approval is fully reviewed by an underwriter UPFRONT, so we can avoid any surprises.
32
WHAT IS THE SNAP USED FOR?
• •
A listing agent, see an offer that comes with a SNAP approval, rest assured that the transaction will go smoothly. All buyers should make sure they have a loan BEFORE they spend time and money looking for a home. Get your offer accepted by the seller by submitting a SNAP approval with your offer and see the difference it makes.
33
CALL ME AND GET STARTED TODAY Eric L. Frazier, MBA National Sales Manager NMLS # 461807 Toll Free: 800-261-1634 x 703 Loan Package details: 800-261-1634 ext. 1 Direct: 714-475-8629
Email: efrazier@intercaplending.com Application website: www.intercaplending.com/thepowerisnow
Intercaplending www.intercaplending.com 34