HOME READY AND HOME POSSIBLE PRODUCT Eric L. Frazier MBA President|CEO|Broker CAL BRE 01148434 NMLS 461807 800-401-8994 x 703 The Power Is Now Inc. CAL BRE 1980407 NMLS 1435243
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PRESENTATION DISCLAIMER This presentation is for real estate professionals only and is intended for the exclusive use of licensed real estate and mortgage lending professionals in accordance with local laws and regulations . It is not intended for the general public. Rates and programs are subject to change without notice. The Power is Now Inc. is an Equal Opportunity Employer, Real Estate Broker and Mortgage Broker and does not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, veteran status, or other classification protected in originating loans or providing and real estate services.
PRESENTATION DISCLAIMER The Power Is Now Mortgage Services is a Mortgage Brokerage licensed by the State of California Bureau of Real Estate (license #1980407) and the National Mortgage License System and Registry (license #1435243), and is a division of The Power Is Now Inc. (license # 01980407). The Power Is Now Inc. is not affiliated with any state or federal agency. The Power Is Now Real Estate Services is also licensed by the State of California Bureau of Real Estate (licensed #01980407), and is a division of The Power Is Now Inc. The Power Is Now Inc., is an equal housing lender. Our corporate office is located at 3739 6th Street Riverside, CA 92501. Our Telephone and Fax number is 800-401-8994. Eric Lawrence Frazier MBA, is a California licensed Loan Originator (NMLS license # 461807), and a licensed Real Estate Broker (CA Bureau of Real Estate license #01143484). Restrictions may apply to all loan programs. The Information and/or data is subject to change without notice and is intended for real estate and mortgage professionals only. If you are a consumer please contact us for a loan estimate on fees, charges and APR. All loans are subject to credit approval. The information is not a commitment to lend or extend credit. All loans or products are available in California only. The Power Is Now Mortgage Services and Real Estate Services are divisions of The Power Is Now Inc., and are only licensed to conduct business in the State of California.
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INTRODUCTION Married 35 years 4 Daughters One in College., Three MBAs. All In Real Estate Born in Memphis Tenn. Native IE. San Bernardino. Residence - Riverside 15 years. University of Redland Graduate Degrees: BSBAM, & MBA in Finance
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INTRODUCTION 35 years as Lender/Mortgage Banker 24 years as Real Estate Agent |15 Years Broker Co-Founder of Frazier Group Realty President of The Power Is Now Inc. Radio | TV | Magazine | Events | Mortgage Services | Real Estate Services | Marketing Services President of The OC Realtist (NAREB)
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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. We intend to become the largest minority owned real estate and mortgage brokerage in the state of California by 2022.
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OUR COMPANY SLOGAN
WE MAKE HOMEOWNERSHIP DREAMS A REALITY
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OUR COMPANY MANTRA
WE ARE AT OUR BEST AND WE MAXIMIZE OUR SUCCESS WHEN WE ACT NOW. OUR POWER IS NOW!
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First Time Buyer YOUR POWER Home IS NOW TO BUY Knowledge is Power. The Power to close the gap between your dreams and your reality.
YOUR POWER IS NOW To change your life To stop making excuses for where you are To start taking action instead of procrastinating To stop chasing lower rent To bring stability to your family To restore & maintain credit To save money for emergencies
To payoff your credit card debt To live on a budget and have a plan To stop spending money indiscriminately To live within your means & for others To stop financing clothes and shoes To stop financing cars and vacations To buy a home and start building wealth TO DO IT NOW!
WWW.NEVERRENTAGAIN.COM Get the help you need to buy now
WWW.APPLYTOBUYNOW.COM Start your application today
WWW.NEVERLEASEAGAIN.COM Agents refer your clients online And we will talk them right away
MAKE YOUR AMERICAN DREAM A REALITY
Home Ready (DU)
Home Possible (LP)
Conventional Financing DU – Desktop Underwriter LP – Loan Prospecter
Mortgage Insurance reduced No upfront MIP as on an FHA loan 3% Down Payment 0% Required from borrower’s own funds Flexible sources of income and assets
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• • •
How does this program compare to standard mortgage insurance: Conventional financing at 97%; 680 FICO, $250,000 loan amount Cancellable once you have 20% equity; unlike FHA. Monthly MI Standard 35% “non refundable”
Monthly MI Home Ready 25% “non refundable”
Monthly MI Home Possible 18% “non refundable
Coverage/$mo.
Coverage/$mo.
Coverage/$mo.
1.31%/$272.91
.96%/$200.00
.80%/$166.00
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HOME READY (DU) DU only MI Coverage: 25% - 90.01% and above
HOME POSSIBLE (LP) LP only 18% over 95%; 16% greater than 90% to 95%
FICO: 620 Minimum (lower FICO’s may not pass the high cost test and may require borrower paid)
FICO LP 620 minimum (lower FICO’s may not pass the high cost test and may require borrower paid)
Conforming LTV’S: 97% Purchase R/T: 1 unit SFR, Condo & PUD’s; 95% 2 units to 85%; 3-4 to 75% Conforming 97% LTV; High balance 95% LTV
LTV’S: 97% Purchase 1 unit SFR, Condos & PUD’s; 95% 1-4 units 95% R/T Refinance Conforming loan limits only
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Down Payment: 0% minimum borrower’s own funds – 1 unit 3% minimum borrower own funds – 3-4 units 3% Seller Contributions Okay
Down payment: 0% minimum borrower’s own funds 1 Unit 3% minimum borrower own funds for 2-4 units 3% seller contributions okay
No 1st time homebuyer requirement Acceptable sources of down payment and closing costs: Gifts, grants, community 2nd’s, cash on hand (cash on hand 1 unit only)
SAME SAME
Reserves – none for 1 unit; DU will determine for 2 units Occupant borrower(s) may not have any ownership interest in any other residential property at time of closing
Reserves – none for 1 unit 2 months reserves for 2-4 units SAME 22
Boarder income: Up to 30% of qualifying income Rental income from an accessory unit (1 unit only) For acceptable examples: https://www.fanniemae.com/content/fact_sheet/homereadyboarder-accessory-unit-income.pdf
Boarder Income - SAME
MCC’s (Mortgage Tax Credits) ok to 95% only
SAME
No rental income from accessory unit.
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Personal gifts, gifts or grants from qualified entity, employer assistance
Cash on hand – okay for 1 unit properties only: The borrower customarily uses cash for expense, and the amount funds saved is consistent with the borrower’s previous payment practices.
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Cash on hand – okay for 1 unit properties only: Funds for the down payment and closing costs must exist in a financial institution account or an acceptable escrow account. Funds must be on deposit at the time of application, or no less than 30 days prior to closing.
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The cash on hand is not borrowed and could have been saved by the borrower The credit report does not show more than 3 trade lines for the borrower.
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The updated credit report and other verifications should indicate limited or no use of credit and limited or no depository relationship between the borrower and a financial institution.
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NON BORROWER HOUSEHOLD INCOME Home ready (DU)
Non-Borrower Household Income 
The existence of income from a non – borrower household member may be considered as a compensating factor for loans underwritten through DU to allow for a higher DTI ratio.
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Non-Borrower Household Income
A “household member” is defined as any person who intends to live with the borrower in the subject property for a minimum of 12 months. An individual who is considered a non-borrower household member in accordance with these guidelines may not also be the contributor of rental income (two-to four-unit properties), accessory unit income (one-unit properties), or boarder income the subject transaction.
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Non-Borrower Household Income 
The income from the non-borrower household member is not added to the borrower’s income for qualifying purposes; however, the existence of this income is considered a compensating factory that may allow the borrower to have a DTI ratio greater than 45% up to 50%. That income must be entered as Non-Borrower Household income in the Other Income section.
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NON BORROWER INCOME EXCEPTIONS If the non-borrower income is needed as a compensating factor to allow a DTI ratio greater than 45% up to 50%, the following requirements apply:
Non-Borrower Household Income
The non-borrower household income must be documented in accordance with Fannie Mae’s standard documentation requirements applicable to the type of income required.
The amount of the non-borrower household income must be 30% or more of the total qualifying income used to underwrite the loan. 33
Non-Borrower Household Income 
The lender must obtain a written statement from the non-borrower that he or she intends to reside with the borrower in the subject property for a minimum of 12 months.
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Because the non-borrower’s income is not being used for qualifying purposes it is not considered when determining whether the mortgage loan meets the, Home Ready income limit requirements.
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RENTAL INCOME AND BOARDER INCOME Home ready (DU)
Rental Income from the Subject Property
Rental income is an acceptable source of qualifying income in the following instances: One-unit principal residence with an accessory unit. Two-to four-unit principal residence properties 36
Boarder Income for Home Ready: 
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The rental payments that any borrower receives from one or more individuals who reside with the borrower (but who are not obligated on the mortgage debt and may or may not be related to the borrower) may be considered as acceptable stable income when qualifying for a one-family property, in an amount of up to 30% of the total gross income that is used to qualify the borrower for the mortgage if: The individual(s) has lived with (and paid rent to) the borrower for the last 12 months. 37
The boarder can provide appropriate documentation to demonstrate a history of shared residency (such as a copy of a driver’s license, bill, bank statement, etc., that shows the boarder’s address as being the same as the borrower’s address).
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The boarder can demonstrate (such as copies of canceled checks) the payment of rental payments to the borrower for the last 12 months. Payment of rent by the boarder directly to a third party is not acceptable
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RENTAL INCOME AND BOARDER INCOME Home Possible (LP)
Rental Income Calculations on Two to Four- Unit Properties  Standard Conforming Rental Income guidelines for FHLMC. Boarder Income  The rental payments that any borrower receives from one or more individuals who reside with the borrower (but who are not obligated on the mortgage debt and may or may not be related to the borrower) may be considered as acceptable stable income when qualifying for a one-family property, in an amount of up to 30% of the total gross income that is used to qualify the borrower for the mortgage with conditions & Requirements 41
Boarder Income Conditions/Requirements:
The individual(s) has lived with (and paid rent to) the borrower for the last 12 months. The boarder can provide appropriate documentation to demonstrate a history of shared residency (such as a copy of a driver’s license, bill, bank statement, etc., that shows the boarder’s address as being the same as the borrower’s address).
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Rental Income Calculations on Two – to Four- Unit Properties
Refer to Conforming Rental Income guidelines for LP.
Boarder Income The boarder can demonstrate (such as copies of canceled checks) the payment of rental payments to the borrower for the last 12 months. Payment of rent by the boarder directly to a third party is not acceptable. The Borrower must attest, by affidavit executed at application, to the: Source of the rental income That the person providing the rental income has resided with the Borrower for the past year and intends to continue residing with the Borrower in the new residence for the foreseeable future. 43
NON OCCUPANT INCOME HOME READY ONLY (Home possible does not allow Non Owner Occupied)
Non-Occupant Borrower Income Flexibility
Income flexibilities help to meet the diverse needs of today’s home buyers by expanding access to creditworthy, low- to moderate-income borrowers. The non-occupant borrower income flexibility allows a parent, or anyone else willing and financially able, to be a borrower on the loan.
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Sample Scenario: Loan Underwritten in Desktop Underwriter® (DU®)
A millennial couple is buying their first home, and his mother would like to help. She is willing and able to be a borrower on the mortgage loan, but she will not live in the home. Because the borrower’s mother will be an actual borrower on the mortgage loan, her income and liabilities are considered from a qualifying perspective and will be included in the combined debt-toincome (DTI) ratio.
2/8/2016
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NOTE: The maximum LTV is 95% for DU. The DTI ratio is
calculated using the income and liabilities of all borrowers; there is no separate DTI ratio requirement for the occupant borrower. Loans with non-occupant borrowers also are eligible for manual underwriting; however, additional requirements apply, including a maximum LTV of 90%, and the occupant borrower must have a DTI ratio no higher than 43%, based solely on their own qualifying income and liabilities. 47
EXTENDED HOUSEHOLD INCOME FLEXIBILITY Home Ready
Homeownership for the Way We Live Today
Home Ready™ mortgages support homeownership for the way we live today. Extended-household living arrangements are more common among underserved populations, including low- to moderate-income, minority, and immigrant households. These households often have lower incomes overall, compared with a broader population, and that may impact their access to credit – but many also are “extended-Income households” or EIH’s. 49
What is an extended-income household? 
EIHs (for our purposes, limited to homeowners with a mortgage) are defined as households in which a member other than the mortgage holder or spouse has an income equal to at least 30 percent of that of the borrower(s).
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Who lives in EIHs? 
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Among all households with a mortgage (based on 2013 data – the most recent available), 14 percent are EIHs. And, among all households with a mortgage, 25 percent of Hispanic, 20 percent of African American, and 17 percent of Asian households are EIHs with one or more adults having combined income equal to at least 30 percent of that of the borrower(s). EIH members include adult children, parents, other relatives, domestic partners, and non relatives 51
NON BORROWER HOUSEHOLD INCOME REQUIREMENTS Home Ready Example
Home Ready Example: Non-borrower household income must be underwritten in DU. Non-borrower income must be at least 30 percent of the total monthly qualifying income being used by the borrower(s). (Note: Income from more than one non-borrower household member may be considered.) Non-borrower income is not considered part of qualifying income. Non-borrower household members may be relatives or non-relatives. The non-borrower must 1) document his or her income, and 2) sign a statement of intent to reside with the borrower(s) for a minimum of 12 months.
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Sample Scenario: Extended-Income Household A single woman with children is looking to buy a larger home, so her father can move in with her. Her father has monthly income and, although he will not pay rent to his daughter, he may contribute to household expenses periodically. The father’s income is not considered as qualifying income; therefore, there is no change to the borrower’s DTI ratio of 47%. The existence of the father’s income, however, is considered the compensating factor that allows the borrower to have a DTI ratio greater than 45%.
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DU Income Limits: https://www.fanniemae.com/singlefamily/homeready
LP Income Limits: http://ww3.freddiemac.com/ds2/sell/affgold.nsf/frmHomePage?OpenForm Note: Many census tracks do not have any income limitations.
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Home Ready
https://homeready.frameworkhomeownership.org/ Home Possible http://www.homeownershipstandards.com/
2/8/2016
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Home Ready Community 2nds: https://www.fanniemae.com/content/fact_sheet/community-seconds-factsheet.pdf Community 2nd Checklist:
https://www.fanniemae.com/content/fact_sheet/community-secondschecklist.pdf 2/8/2016
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This presentation is for real estate professionals only and is intended for the exclusive use of licensed real estate and mortgage lending professionals in accordance with local laws and regulations . It is not intended for the general public. Rates and programs are subject to change without notice. The Power is Now Inc. is an Equal Opportunity Employer, Real Estate Broker and Mortgage Broker and does not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, veteran status, or other classification protected in originating loans or providing and real estate services.
The Power Is Now Mortgage Services is a Mortgage Brokerage licensed by the State of California Bureau of Real Estate (license #1980407) and the National Mortgage License System and Registry (license #1435243), and is a division of The Power Is Now Inc. (license # 01980407). The Power Is Now Inc. is not affiliated with any state or federal agency. The Power Is Now Real Estate Services is also licensed by the State of California Bureau of Real Estate (licensed #01980407), and is a division of The Power Is Now Inc. The Power Is Now Inc., is an equal housing lender. Our corporate office is located at 3739 6th Street Riverside, CA 92501. Our Telephone and Fax number is 800-401-8994. Eric Lawrence Frazier MBA, is a California licensed Loan Originator (NMLS license # 461807), and a licensed Real Estate Broker (CA Bureau of Real Estate license #01143484). Restrictions may apply to all loan programs. The Information and/or data is subject to change without notice and is intended for real estate and mortgage professionals only. If you are a consumer please contact us for a loan estimate on fees, charges and APR. All loans are subject to credit approval. The information is not a commitment to lend or extend credit. All loans or products are available in California only. The Power Is Now Mortgage Services and Real Estate Services are divisions of The Power Is Now Inc., and are only licensed to conduct business in the State of California.