Growing Your Business with FHA

Growing Your Business with FHA Dispelling The Myths Setting Expectations for Smooth Transactions January 14 & 15 2009

Introduction Agenda – Growing Your Business With FHA ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

It’s Competitive Out There ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Overview ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What happened to the mortgage industry? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Current Status ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Impact of Fannie Mae & Freddie Mac Pricing Changes ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What this means for you and your clients? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Back to the Future ,[object Object],[object Object],[object Object],[object Object],[object Object]

FHA Program Basics ,[object Object],[object Object],[object Object],Terminology And Resources

Why Choose FHA? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],FHA Program Basics *Down payment changes to 3.5 01/01/09

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],FHA Program Basics Why Choose FHA? Con’t *Changing with FHA Housing Reform Bill

FHA Program Basics ,[object Object],[object Object],[object Object],[object Object],[object Object],Why Choose FHA? Con’t

Borrower Profile ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],FHA Program Basics

FHA Loan Programs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],FHA Program Basics Key Parameters ,[object Object],[object Object],[object Object],[object Object],[object Object]

FHA Financing Options ,[object Object],[object Object],[object Object],FHA Program Basics Key Parameters

Statutory Loan Limits ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],FHA Program Basics Key Parameters Click on https://entp.hud.gov/idapp/html/hicostlook.cfm for a list of statutory loan limits.

2009 FHA Loan Limits $559,500 $450,200 $372,450 $290,950 MD 99999 Kent County $597,100 $480,450 $397,500 $310,500 MD 36180 Worcester County $667,900 $537,400 $444,600 $347,300 MD 30500 St. Mary's County $729,800 $587,250 $485,800 $379,500 MD 37980 Cecil County $736,450 $592,600 $490,250 $382,950 MD 20660 Talbot County $950,950 $765,200 $633,050 $494,500 MD 12580 Baltimore city $950,950 $765,200 $633,050 $494,500 MD 12580 Queen Anne's County $950,950 $765,200 $633,050 $494,500 MD 12580 Howard County $950,950 $765,200 $633,050 $494,500 MD 12580 Harford County $950,950 $765,200 $633,050 $494,500 MD 12580 Carroll County $950,950 $765,200 $633,050 $494,500 MD 12580 Baltimore County $950,950 $765,200 $633,050 $494,500 MD 12580 Anne Arundel County

FHA Mortgage Insurance (UFMIP or MIP) ,[object Object],[object Object],[object Object],[object Object],[object Object],FHA Program Basics Key Parameters

FHA Mortgage Insurance con’t ,[object Object],[object Object],[object Object],[object Object],[object Object],FHA Program Basics Key Parameters *Changing with FHA Housing Reform Bill

Canceling Annual Mortgage Insurance - Loan terms greater than 15 years ,[object Object],[object Object],[object Object],[object Object],[object Object],FHA Program Basics Key Parameters

[object Object],[object Object],[object Object],FHA Program Basics Key Parameters Canceling Annual Mortgage Insurance – Loan terms less than 15 years

Borrower Eligibility: How many FHA loans can a borrower finance? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],FHA Program Basics Key Parameters

Eligible Borrowers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],FHA Program Basics Key Parameters

Identity of Interest: Non-Arms Length Transaction ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],FHA Program Basics Key Parameters

[object Object],[object Object],[object Object],[object Object],[object Object],Identity of Interest: Non-Arms Length Transaction con’t FHA Program Basics Key Parameters

Non-Occupant Co-Borrowers Also referred to as a “kiddie condo” ,[object Object],[object Object],[object Object],FHA Program Basics Key Parameters ,[object Object],[object Object],[object Object]

Non-Purchasing Spouse ,[object Object],[object Object],[object Object],[object Object],[object Object],FHA Program Basics Key Parameters

FHA DEPARTING RESIDENCE HUD Mtge Letter 2008-25 ,[object Object],[object Object],[object Object],[object Object],[object Object]

Community Property States ,[object Object],[object Object],[object Object],[object Object],[object Object],FHA Program Basics Key Parameters Note: In non-community property states it is not necessary to obtain a credit report on a non-purchasing spouse if the spouse will not be on the title.

FHA Modernization Bill ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Example: Cash Investment Calculation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

FHA Modernization Bill ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Tax Credit ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],FHA Reform: Dispelling the Myths NEW & IMPROVED!

FHA Reform: Dispelling the Myths Appraisal Requirements Greatly Relaxed VALUE CONDITION SHEETS ARE NO LONGER REQUIRED!!! A Huge Win!!!

FHA Reform: Dispelling the Myths Appraisal Enhancements ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

FHA APPRAISAL REPAIRS ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

FHA Reform: Dispelling the Myths Seller Fees ,[object Object],[object Object]

FHA Reform: Dispelling the Myths Seller Fees ,[object Object],NONE!!!

FHA Reform: Dispelling the Myths Flexible Credit Parameters ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

FHA Reform: Dispelling the Myths FHA Flexible Credit Parameters Additional Features ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

FHA Qualifying ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Overview…loan amounts greater than $417,000 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],High Balance FHA Loan Program Information is accurate as of the date of publication and is subject to change without notice. For WFHM Internal Use Only.

FHA Floors ,[object Object],[object Object],Information is accurate as of the date of publication and is subject to change without notice. High Balance FHA Loan Program $347,000 Two-Unit $271,050 One-Unit

FHA Floors ,[object Object],High Balance FHA Loan Program Information is accurate as of the date of publication and is subject to change without notice. $521,250 Four-Unit $419,400 Three-Unit $347,000 Two-Unit $271,050 One-Unit

[object Object],[object Object],[object Object],Information is accurate as of the date of publication and is subject to change without notice. High Balance FHA Loan Program High Balance FHA Loan Program Alaska and Hawaii Ceilings New Ceilings Property Type $1,403,400 $1,129,250 $934,200 $729,750 $2,105,100 Four-Unit $1,693,875 Three-Unit $1,401,300 Two-Unit $1,094,625 One-Unit

High Balance FHA Loan Program cont’d Information is accurate as of the date of publication and is subject to change without notice. High Balance FHA Loan Program ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Eligible Products Manual calculation of Note rate +2% is required 3/1 and 5/1 ARM = Note rate ARM Qualification High Balance FHA Loan Program Standard FHA Loan Program

Housing & Economic Recovery Act of 2008 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Selling the Contract FHA Financing Can Help You Benefit By: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Selling the Contract Our Commitment to Growing Your Business Seller Contributions ,[object Object],FHA can produce more qualified buyers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Selling the Contract Our Commitment to Growing Your Business: Seller Contributions ,[object Object],[object Object],[object Object],[object Object],#104597 6/08

Selling the Contract Our Commitment to Growing Your Business Seller Contributions ,[object Object],[object Object],Example $200,000 List Price $200,000 $200,000 Sales Price $190,000 $200,000 Net $190,000 $ 10,000 Seller Contributions $ 0 $190,000 $190,000

Selling the Contract Our Commitment to Growing Your Business FHA Financing is Assumable FHA Loans Are Fully Assumable! This means when your homeowner is ready to sell the property, a qualified buyer can assume responsibility for the home seller’s existing mortgage. It’s called an “assumption” How it works: Much like the process for a new borrower, the buyer has to receive approval by the lender. There is typically an assumption fee plus a fee for the credit report incurred during this approval process. Disadvantage: Additionally, if the house has appreciated and/or the mortgage has been paid down significantly since the loan was taken out, the buyer either has to pay cash or take out a second mortgage to cover the difference between the loan balance and the sales price. Advantage: If distressed financially or distressed, market buyer only needs to credit qualify, and pay closing costs, not escrows…Take over the payment including escrows. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],Selling the Contract Our Commitment to Growing Your Business Renovation Loans

[object Object],[object Object],[object Object],Selling the Contract Our Commitment to Growing Your Business Renovation Loans

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Selling the Contract Our Commitment to Growing Your Business Renovation Loans

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Selling the Contract Our Commitment to Growing Your Business Renovation Loans

Selling the Contract Our Commitment to Growing Your Business Renovation Loans ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Selling the Contract Our Commitment to Growing Your Business Renovation Loans ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What is a Temporary Buydown? ,[object Object],[object Object],Selling the Contract Our Commitment to Growing Your Business Interest Rate Buydown

When to use a Buydown Selling the Contract Our Commitment to Growing Your Business Temporary Buydown ,[object Object],[object Object],[object Object]

Which Borrowers are best suited for Buydown? ,[object Object],[object Object],[object Object],[object Object],Selling the Contract Our Commitment to Growing Your Business Temporary Buydown

Primary Customer Benefits ,[object Object],[object Object],[object Object],[object Object],[object Object],Selling the Contract Our Commitment to Growing Your Business Temporary Buydown

Funding the Cost of a Buydown ,[object Object],[object Object],[object Object],[object Object],The Buydown program basically creates an account that supplements the borrower’s monthly payments during the temporary buydown period. This account can be funded in three ways: Selling the Contract Our Commitment to Growing Your Business Temporary Buydown

Writing the Contract ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Writing the Contract Amendatory Clause SALES PRICE

Writing the Contract Amendatory Clause

Writing the Contract Amendatory Clause ,[object Object],[object Object],[object Object],[object Object]

Writing the Contract For Your Protection: Get a Home Inspection ,[object Object]

Writing the Contract For Your Protection: Get a Home Inspection

Setting Expectations ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

FHA Timeline ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Interest Credit saves time & money ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Summary: Mortgage Market ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

FHA REVERSE MORTGAGES ,[object Object],[object Object]

Reverse Mortgages ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

How Cash is Distributed to Borrower ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

REVERSE MORTAGES / HECM ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Reverse Mortgage for Purchase ,[object Object]

The Formula: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Reverse Purchase Example ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Reverse Mortgage for Purchase ,[object Object],[object Object],[object Object],[object Object],[object Object]

Reverse Mortgage ,[object Object]

Q&A ,[object Object],[object Object],[object Object],[object Object]

Growing Your Business with FHA

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Growing Your Business with FHA

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