THE VA HOME LOAN THE BEST LOAN PROGRAM IN THE MARKET PLACE Eric L. Frazier MBA President and CEO CAL BRE 01143484 NMLS 461807 800-401-8994 x 703 The Power Is Now Inc. CAL BRE 1980407 NMLS 1435243
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VA HOME LOAN NO MONEY DOWN! NO CLOSING COST! Eric L. Frazier MBA President and CEO CAL BRE 01143484 NMLS 461807 800-401-8994 x 703 The Power Is Now Inc. CAL BRE 1980407 NMLS 1435243
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 01143484 NMLS 461807 800-401-8994 x 703 The Power Is Now Inc. CAL BRE 1980407 NMLS 1435243
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ERIC LAWRENCE FRAZIER MBA
President of The Power Is Now Inc. Radio | TV | Magazine | Events | Mortgage Services | Real Estate Services | Marketing Services President of The OC Realtist (NAREB) 35 years as Lender/Mortgage Banker 24 years as Real Estate Agent |15 Years Broker Co-Founder of Frazier Group Realty 6
ERIC LAWRENCE FRAZIER MBA 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 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. 8
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.
Five Objectives: Knowledge - Knowledge is the Power you need to build wealth.
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Commitment to Financial Independence – We must take Individual responsibility for our lives.
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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.
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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.
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. 17
10 POINT WEALTH BUILDING PLEDGE www.thepowerisnow.com 18
THE STATE OF HOUSING ON THE DECLINE FOR AFRICAN AMERICANS 19
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 20
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? 23
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 25
THE STATE OF HOUSING FOR MINORITIES •
The Black/Brown-White Economic Divide Real
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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.
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. 27
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!
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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 have 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. 39
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!!! 41
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 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
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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. 45
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. 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 – 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�.
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. 57
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 63
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 64
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?
PURCHASE A MULTI-UNIT PROPERTY Live in One Unit and Rent out the Other
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 HOME BUYERS
CAPTAIN BOB AND JACKIE RENTIER
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
CAPTAIN BOB AND JACKIE RENTIER Renting an Apartment
Buying a House
Current Housing DR. Rent Vacancy 25% Income Total Income Front DR
FUTURE Purchase 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 +I20:K31PITI
Total Debt to Income Ratio. Montly Debt Montly Income
$ $ $ $
2,000.00 7,500.00 27%
$ $
3,266.00 7,500.00 44%
1 unit $ 439,000.00 0 $ $ 439,000.00 0.0215 $ 9,438.50 $ 448,438.50 Rate: 4.25% APR: 4.423% $ 2,096.00 0.0125 $ 434.00 0.0035 $ 122.00 0.0085 $ $ 2,652.00
Income Limits vary and are based on 140% of HUD AMI. Mortgage Limits vary and are based on HUD Loan Limit for the AREA.
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% $ 17,560.00 $ 17,560.00 $ $ 17,560.00
Lenders Interest Credit Seller Credit Total Credit Total Cash Required
-2% $ (8,780.00) -2.00% $ (8,780.00) $ (17,560.00) $
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:
$ 3,000.00 $ 450.00 $ 650.00 $ 100.00 $ 4,200.00
$ 4,200.00
VA PROGRAM SUMMARY
VA Program
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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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