1
2
Your Resource for Real Estate 3
INTRODUCTION
www.thepowerisnow.com
4
INTRODUCTION Married 36 years 4 Daughters, 2 Grand Daughters, 1 Grandson Born in Memphis Tenn. Live in Riverside University of Redland Graduate Degrees: BSBAM, & MBA in Finance 36 years as Lender/Mortgage Banker 26 years as Real Estate Agent |16 Years Broker Co-Founder of Frazier Group Realty 5
THE POWER LUNCH
7
8
9
10
11
12
13
Eric L. Frazier MBA President|CEO|Broker CAL BRE 01143484 NMLS 461807 800-401-8994 x 703 The Power Is Now Inc. 14 CAL BRE 1980407 NMLS 1435243
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. 15
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. 16
OUR COMPANY MANTRA We are at our best and we maximize our success when we act now. Our Power Is Now!
17
OUR COMPANY SLOGAN
We Make Homeownership Dreams A REALITY
18
INTRODUCTION 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. www.applytobuynow.com www.neverrentagain.com 19
First Time Home Buyer YOUR POWER IS NOW TO BUY
20
THE PATHWAY TO POWER & WEALTH IS TO OWN REAL ESTATE NOW Join the Homebuyers Club •www.applytobuynow.com •www.neverleaseagain.com
YOUR POWER IS NOW •To change your life
•To payoff your credit card debt
•To stop making excuses for where you are•To live on a budget and have a plan •To start taking action instead of procrastinating
•To stop spending money indiscriminately
•To stop chasing lower rent
•To stop financing clothes and shoes
•To bring stability to your family
•To stop financing cars and vacations
•To restore & maintain credit
•To buy a home and start building wealth
•To save money for emergencies
•TO DO IT NOW!
•To live within your means & for others
22
WWW.NEVERRENTAGAIN.COM
Start Building Wealth by Owning Real Estate
THE HOMEBUYER’S CLUB •
FREE MEMBERSHIP
• What you get as a Club member: • • • •
Participate as we go live on Facebook, Zoom, and BlogTalkRadio every Tuesday at 7PM Ask your questions about homeownership and hear them answered live Learn about loan programs, down payment assistance, and realistic advice for real estate transactions Received notifications to listen to current weekly online radio shows on The Power Is Now Radio and BlogTalk Radio 24
THE HOMEBUYER’S CLUB •
FREE MEMBERSHIP Con’t.
• Receive free monthly issues of The Power Is Now Real Estate magazine, Real Estate Magazine and our Radio Magazine • Watch and learn about the real estate industry on The Power Is Now TV • Read our weekly blogs about the Real Estate Industry • Receive a free one-time counseling meeting for a budget and savings plan • Receive a free one-time counseling meeting for debt elimination and credit restoration plan. 25
THE HOMEBUYER’S CLUB •
PAID MEMBERSHIP
What you get as a Club member: In addition to all Free Membership benefits, for a one time setup fee of $297 and $97 per month you will receive: • • • •
Monthly reviews and analysis of your budget and other expenses, including taxes, insurance, and emergency fund Monthly reviews and assistance to improve your credit score and manage your credit related spending Monthly review of your debt elimination and savings plan for homeownership and retirement Monthly 45 minute accountability meetings to review the results of your budgeting, financial goals for the month and to set new goals for the following month 26
CHANGING YOUR MINDSET TOWARD FINANCIAL LITERACY AND WEALTH BUILDING. Five Key Objectives
THE POWER IS NOW WEALTH INITIATIVE • 1. 2.
Five Objectives: Knowledge - Knowledge is the Power you need to build wealth.
Commitment to Financial Independence – We must take Individual responsibility for our lives.
3.
Knowledge always comes before money or the money will soon be gone.
Commitment requires disclipine and discipline requires a budget and accountability
Investment in real estate - We must prioritize ownership in real property as opposed to personal property.
Real Property appreciates. Personal property depreciates.
28
THE POWER IS NOW WEALTH INITIATIVE 4.
Financial and Credit Management - We must live within our means and not abuse credit.
5.
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.
Buy and Hold, or Buy, Sell to 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.
29
10–Point Wealth Building Pledge WWW.THEPOWERISNOW.COM 30
10 POINT WEALTH BUILDING PLEDGE I, (state your name), from this day forward, declare before my God, my family and my community a renewed commitment to build wealth and to leave a legacy and an inheritance for my family and my community. I pledge the following: 1. To save and invest 10 to 20 percent of my after-tax income 2. To be a proactive and informed investor in real estate 3. To be disciplined and knowledgeable consumer in my spending 4. To measure my personal wealth by net worth and not my income 5. To engage in sound budgeting, credit and tax management practices 31
10 POINT WEALTH BUILDING PLEDGE 6. To teach business & financial principles to my children & demonstrate them in my actions 7. To use a portion of my wealth to strengthen my community and my church 8. To be humble and not live extravagantly saving instead of consuming 9. To ensure my wealth is passed onto my family, and my community 10. To maximize my earning power through a commitment to financial literacy and professional development 32
THE STATE OF HOUSING FOR CALIFORNIANS 33
California's Housing Future: Challenges and Opportunities Public Draft California Business, Consumer Services and Housing Agency Alexis Podesta, acting Secretary California Department of Housing and Community Development Ben Metcalf, Director 34
Projected Housing Needs Through 2025 1.8 Million New Homes Needed by 2025
From 2015-2025, approximately 1.8 million new housing units are needed to meet projected population and household growth, or 180,000 new homes annually.
35
Today’s population of 39 million is expected to grow to 50 million by 2050.
Issues Facing California
Without intervention, much of the population increase can be expected to occur further from: job centers, high-performing schools, and transit, constraining opportunity for future generations. 36
California’s 39 million people live in 13 million households across 58 counties and 482 cities.
Demographic Trends Drive Housing
There are three cities with more than one million residents, LA, SD, SJ, there are 107 cities with less than 10,000 residents. The largest population concentration is in Southern California.
37
Through 2025, the highest percentage of household growth is expected to occur in the Bay Area, Southern California, and Central Valley communities
Household Growth
Between 2014 and 2015, approximately 25 percent of population growth came from migration from other states and countries;
75 percent of population growth was attributable to births within California.
38
Race and Ethnicity Population Trends
California’s population is projected to become increasingly racially diverse through 2040. According to The National Equity Atlas, as of the 2010 Census, California is second only to Hawaii in diversity in the nation. People of color have represented the majority of the population in California since 2000 and are projected to be the majority nationwide by 2044.
As people of color continue to grow as a share of the workforce and population, California’s success and prosperity will be ever more directly linked to the social and economic well-being of the State’s communities of color. 39
Issues Facing California
New Construction averaged less than 80,000 new homes annually over the last 10 years,
Production continues to fall far below the projected need of 180,000 additional homes annually. 40
This lack of supply greatly impacts housing affordability. Low production hasn't always been the case.
Issues Facing California
From 1955-1990, the State was building more than 200,000 homes annually and a much greater percentage were multifamily (in contrast to today's focus on singlefamily). 41
Issues Facing California
In addition to our supply challenges, the housing growth that does occur frequently takes the form of urban sprawl; expanding into undeveloped areas. These development patterns often resulted in reinforcing income inequality and patterns of segregation 42
Issues Facing California
Lack of supply and rising costs are compounding growing inequality and limiting advancement opportunities for younger Californians. Without intervention much of the housing growth is expected to overlap significantly with disadvantaged communities and areas with less job availability, Continued sprawl will decrease affordability and quality of life while increasing transportation costs. 43
Issues Facing California The majority of Californian renters — more than 3 million households — pay more than 30 percent of their income toward rent Nearly one-third — more than 1.5 million households — pay more than 50% of their income toward rent.
Overall homeownership rates are at their lowest since the 1940s.
44
Issues Facing California
California is home to 12 percent of the nation’s population, But a disproportionate 22 percent of the nation’s homeless population. On a single night in 2016, more than 118,000 people experienced homelessness in California—
45
Issue Facing California California also had the highest number of people experiencing chronic homelessness in the United States, Nearly one third of the nation’s youth, Nearly one-fourth of the nation’s homeless veterans More than one third of the nation’s chronically homeless residents. 46
Overcrowding Overcrowding is when there is more than one resident per room (every room in the home, bedrooms, kitchen, living room, etc. is included in this calculation). California’s overcrowding rate is 8.4 percent. Twice as high as the national average 3.4 percent. California has the second highest percentage of overcrowded households of any state. The renter overcrowding rate for California is 13.5 percent, more than triple the owner overcrowding rate of 4 percent. 47
Homeownership Rate Trends Since the 1950s, California’s homeownership rate has fallen below the national rate, with a significant gap persisting since the 1970s. Between 2006 and 2014, the number of housing units that were owner occupied fell by almost 250,000 in California, The number of renter-occupied units increased by about 850,000. According to the Public Policy Institute of California, “much of the increase in rental units occurred among formerly owned single family detached housing units.” 48
49
Homeownership rates also vary by race and ethnicity in California. Homeownership Rates by Race and Ethnicity
White (Non-Hispanic) were homeowners 64%, compared to only 35% of households that identified as Black or AfricanAmerican. 50
51
Rental Housing Costs 1990-2014 Some key factors in the increased demand for rental housing since the recession include: • Foreclosures and former owners moving into the rental market. • Demographic shifts, particularly the generational boom of millennials coming of age and entering the housing market with strong rental tendencies. • Lack of supply. • Deferred home buying, due to: – Lack of market confidence. – Reduced access to mortgage credit following the recession. – Unemployment and stagnant wages. – Competition with investors buying homes to convert to rentals. – Student Loan Debt 52
53
54
55
56
57
THE STATE OF HOUSING IN THE UNITED STATES IS THE WEALTH GAP FOR AFRICAN AMERICANS 58
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 59
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. 60
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.
61
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? 62
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 2.1 Trillion dollars (7 out of 182 countries) 63
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 64
WEALTH IS THE DIFFERENCE Wealth provides a measure of security when a job loss or personal crisis occurs.
0
The Ever-Growing GAP Without Change, African American and Latino Families Won’t Match White for Centuries.
Institute for Policy Studies 1112 16th Street NW, Suite 600, Washington, DC 20036 CFED 1200 G Street NW, Suite 400, Washington, DC 20005 66
67
Wealth Gap
• Over the past 30 years, the average wealth of White families has grown by 84%— 1.2 times the rate of growth for the Latino population and 3 times the rate of growth for the Black population 68
Wealth Gap • Over the past 30 years, the wealth of the Forbes 400 richest Americans has grown by an average of 736%— 10 times the rate of growth for the Latino population and 27 times the rate of growth for the Black population. 69
Wealth Gap • The wealthiest 20% of Americans have taken 99.4% of all gains in wealth while the bottom 80% have been left to split just 0.6% among themselves.
70
Wealth Gap • The Richest 400 individuals—with a collective net worth of $2.34 trillion—now own more wealth than the entire Black population, plus one-third of the Latino population, combined.
71
72
Wealth Gap
If average Black family wealth continues to grow at the same pace it has over the past three decades, it would take Black families 228 years to amass the same amount of wealth White families have today. That’s just 17 years shorter than the 245-year span of slavery in this country.
73
Wealth Gap • For the average Latino family, it would take 84 years to amass the same amount of wealth White families have today—that’s the year 2097.
74
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.
75
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.
76
77
THE STATE OF HOUSING FOR MINORITIES • The Black/Brown-White Economic Divide is 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% respectively. 2004 Blacks achieved a high of 50% 2014 Blacks were at 42.5% and Hispanics 43.5% Hispanics. 79
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
80
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
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 •
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.
How do you Build Weath? Buy Real Estate where you live. Don’t Rent 85
“Renting Today is Modern Day Sharecropping” By Christopher Thompson
86
Becoming out of Reach to buy
Los Angeles
87
$614,536
$350,000
88
89
Becoming out of Reach to buy
Richmond
90
$502,500
$150,000
91
92
Becoming out of reach to buy
Vallejo
93
$359,999
$45,000
94
Becoming out of Reach to buy
Oakland
95
$672,500
$265,000
96
97
Becoming out of reach to buy
Berkeley
98
$1,250.000
$447,000
99
100
How do we close the Gap?
The Great Recession further exacerbated the wealth gap as Blacks and Latinos where 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.
101
How do we close the Gap?
102
The 1934 National Housing Act Housing & Economic Strategy It Didn’t Work for Minorities Until after 1968 103
FHA • 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.
104
FHA Before its creation, only 40% of Americans were homeowners.
This low homeownership rate was largely due to the limited short-term financing available,
Most loan terms offered three to five-year payment plans
Required large down payments often consisting of 50% of the purchase price. 105
The FHA is a government agency, however its funding is self-generated.
FHA
It has insured over 34 million home mortgages and over 47,000 multifamily projects since its inception. Mortgage Insurance premiums fund the program
106
In 1965, the FHA became part of the U.S. Department of Housing and Urban Development (HUD).
FHA
In 1944 the VA Loan became a benefit to men and women who served in the military Between 1934 to 1968 only 2% of Government Loans were made to African Americans. It would take Legal Action at the Federal Level for change to take place. 107
The FAIR HOUSING ACT Title VIII of the Civil Rights Act of 1968 (Fair Housing Act) prohibits discrimination in the sale, rental and financing of dwellings based on race, color, religion, sex or national origin.
Title VIII was amended in 1988 (effective March 12, 1989) by the Fair Housing Amendments Act, which:
expanded the coverage of the Fair Housing Act to prohibit discrimination based on disability or on familial status (presence of child under age of 18, and pregnant women);
established new administrative enforcement mechanisms with HUD attorneys bringing actions before administrative law judges on behalf of victims of housing discrimination;
and revised and expanded Justice Department jurisdiction to bring suit on behalf of victims in Federal district courts.
108
REAL ESTATE WIILL CLOSE GAP BUT IS THE AMERICA DREAM STILL A REALTY FOR THE LOW TO MODERATE INCOME IN CALIFORNIA?
110
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
111
0% DOWN PAYMENT PROGRAM VA LOAN ONE MONTHS RENT WILL GET YOU INTO YOUR DREAM HOME 112
VA LOAN PROGRAM • What is a VA Loan? a VA loan is insured by the U.S. Department of Veterans Affairs (VA) and offered by many lenders across the country. The VA program was created to help Veterans become homeowners without a down payment even if they have low credit scores. • If you’ve served in the active military for at least six months, or in the reserves or National Guard for six years, or a spouse of someone who meets these conditions, you’ll likely qualify. 113
BASIC VA SERVICE REQUIREMENTS • Served for 90 consecutive days of active service in wartime, • OR Served for 181 days of active service during peacetime, • OR Has more than 6 years in the Reserves or Nations Guard Active-duty Servicepersons • Servicepersons on active duty who have served for 90 consecutive days of active service are eligible • Reservists and Members of the National Guard Dishonorably discharged veterans are ineligible for any type of VA home loan. 114
0% DOWN PAYMENT PROGRAM USDA LOAN ONE MONTHS RENT WILL GET YOU INTO YOUR DREAM HOME
116
117
USDA ZERO DOWN PAYMENT
https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do 118
LOW MORTGAGE INSURANCE • Low Mortgage Insurance Premiums USDA mortgages the lowest MIP of any home loan program besides the VA, which requires no mortgage insurance. • There is a one time up-front mortgage insurance payment of 1% of the loan amount that is added into the loan. • The annual MIP is just 0.30%. When compared to the FHA PMI fee of 0.85% the savings is substantial. 119
INCOME LIMITS • This rural housing loan has set income limits for individuals, or family’s in order to qualify. Your household income cannot exceed 115% of your area median income. • For most areas of the county the income limit for households with 1-4 family members is $75,650 and up to $153,400 in certain high cost cities. • The maximum debt-to-income ratio for USDA loans are higher than a conventional loan.
120
PROPERTY LIMITATIONS Properties financed with direct loan funds must: • Not exceed 2,000 square feet • Market value not exceeding the area loan limit • In-ground swimming pools not permitted • Home cannot be used to produce income 121
0% DOWN PAYMENT PROGRAM MY HOME & ZIP ONE MONTHS RENT WILL GET YOU INTO YOUR DREAM HOME
CALHFA LOAN REQUIREMENTS • You will need to meet credit, income limits and loan requirements of the CalHFA-Approved 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. 123
PROPERTY ELIGIBILITY • The home must be located in California. • The home must be your primary residence. • The sales price of the home must be less than the allowable sales price limits $660,000 • There is a five (5) acre maximum on the size of the property. • The home must be zoned for Single Family Occupancy (not for 2-4 units) 124
PROPERTY ELIGIBILITY • Accessory Dwelling Unit (ADUs),Guest houses, granny units and in-law quarters may be eligible • The home can be a condominium or attached unit in a planned unit development (PUD). (Check with your lender for eligible condominiums.) • Doublewide (not singlewide) Manufactured homes are only allowed under CalHFA’s FHA Home Loan Program 125
30 YEAR FIXED RATE PROGRAMS • The CalHFA FHA program featuring a CalHFA fixed interest rate first mortgage. • The CalPLUS FHA program featuring a slightly higher fixed interest rate because it is combined with the CalHFA Zero Interest Program (ZIP) for closing costs. • The CalHFA VA program is a VA-insured loan featuring a CalHFA fixed interest rate first mortgage. • The Cal-EEM + Grant program combines an FHA-insured Energy Efficient Mortgage first mortgage loan with an additional Cal-EEM Grant, making energy efficient improvements even easier. The interest rate on the Cal-EEM is fixed throughout the 30-year term.
126
MYHOME ASSISTANCE PROGRAM • Offers a deferred-payment junior loan of an amount up to the lesser of three and half percent (3.5%) of the purchase price or appraised value to assist with down payment and/or closing costs.
SCHOOL TEACHER AND EMPLOYEE ASSISTANCE PROGRAM • •
• •
School Teacher and Employee Assistance Program (School Program) Summary This program is for teachers, administrators, school district employees and staff members working for any California K-12 public school, which includes Charter schools and county/continuation schools. Applicants must also be first-time homebuyers. School Program junior loans are up to 4% of the purchase price, and can only be combined with an eligible CalHFA first mortgage loan. School Program subordinate loans can only be used for down payment assistance and/or closing costs
128
THE FHA ZIP SECOND LOAN •
•
The FHA ZIP second loan is only available with CalPLUS and is a silent second loan for either 3.00% or 4.00% of the CalHFA FHA total first mortgage loan amount, including Up Front Mortgage Insurance Premium (UFMIP). The interest rate is zero percent (0.00%) 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. 129
THE “HOME SECURE DPA” PROGRAM Not having the money for a down payment is no longer an excuse
THE “HOME SECURE DPA” PROGRAM Purpose of the Program • The “HOME SECURE DPA” 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 “HOME SECURE DPA” Program offers financing on FHA, USDA and VA Loans designed to increase homeownership opportunities to low-to-moderate income individuals and families in CA. 131
THE “Home Secure” DPA PROGRAM HIGHLIGHTS
“HOME SECURE” DPA PROGRAM The program is 1st Mortgage Loan with a 3.5% 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 133
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. 134
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. 135
UNDERWRITING GUIDELINES • Minimum Credit Scores: • Minimum Credit scores 620+ • Non-traditional Trade line – Not allowed must have min. score • 1 Units properties • 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 • 56.9% 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 136
UNDERWRITING GUIDELINES • Income Limits for Grant: – 115% of HUD Area Median Income
• Credit Scores: 620 • Income Limit for Silent Second: • No Income Limit • 30 year fixed rate • No Payment with conditions ie.. Cannot transfer title or sell, or go into default and more. • Forgivable after making payments on the 1st mortgage for 3 years on time.
137
138
139
140
141
142
143
144
145
146
147
ITIN Program 148
149
Loan Amounts to $600,000.00 Up to 90% LTV with traditional credit and 620+ Fico Score
Up to 75% LTV with non-traditional credit and No Fico Score
Owner Occupied Only
SFR, PUD, Townhouse, Condo (Warrantable only)
5% down payment from borrower additional funds can be gift from family
Purchase and R/T Refinance
Minimum Loan Amount is $150K
150
151
152
153
154
155
ABILITY TO REPAY YOU CAN PAY FOR IT IN CASH IF NECESSARY 156
ATR – No Income Documentation 157
ATR in Full Asset Depletion
Two Months of Qualifying Account
75% max LTV
600 min Fico
ATR
158
ATR ATR: ability to repay in full
Borrower Does NOT have to be currently Employed
Purchase or C/O Refinance
Owner Occupied or Investment 159
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
160
Apply To Buy Now! The Power Is Now Mortgage Services Direct line: 714-475-8629 Start the Process Now www.neverleaseagain.com www.applytobuynow.com
Your Resource for Real Estate
162