FHA, 203K-Streamline Venture Development Inc Minnesota Mortgage Broker 952.285.4319 [email_address] http://www.ventureloanapp.com

Agenda Goal of the FHA 203K-Streamline Borrower Qualifications Loan Product & Guides Appraisal Standards Draws FHA File Submission Checklist Numerical Example of: Purchase & Refinance Challenging Files 10-Compensating Factors

Goal of the FHA 203K-Streamline

Borrower Qualifications

Loan Product & Guides

Appraisal Standards

Draws

FHA File Submission Checklist

Numerical Example of: Purchase & Refinance

Challenging Files

10-Compensating Factors

Goal of the FHA-203K-Streamline Buy or-- Refinance Gain access to funds for improvements, repairs, and appliances: UP TO $35,000

Buy

or--

Refinance

Gain access to funds for improvements, repairs, and appliances: UP TO $35,000

Borrower Qualifications Same as standard FHA credit and income Borrower’s ratios per FHA guides  31/43 Universal requires a 620 mid score of three Lower if only two scores and better be good Non-traditional credit not accepted Must get an approve/eligible on our site

Same as standard FHA credit and income

Borrower’s ratios per FHA guides  31/43

Universal requires a 620 mid score of three

Lower if only two scores and better be good

Non-traditional credit not accepted

Must get an approve/eligible on our site

Loan Product and Guides 30-Year Fixed Rate Only! Purchases and Refinances 110% LTV Allowed Appraisal Value “Subject To” i.e. after work FHA Loan Limits for Metro Counties = $362,790  $35,000 included Minor Rehab. Nothing Structural or load bearing Standard FHA Upfront MIP and Monthly MI

30-Year Fixed Rate Only!

Purchases and Refinances

110% LTV Allowed

Appraisal Value “Subject To” i.e. after work

FHA Loan Limits for Metro Counties = $362,790  $35,000 included

Minor Rehab. Nothing Structural or load bearing

Standard FHA Upfront MIP and Monthly MI

Loan Product & Guides No HUD Consultant Required….work with Contractors directly Work on home to be livable within 30-days from close Occupancy within first 60-days after close date All work to be completed within 6-months of close date General Contractor not required but preferred Two Draws Only: One shortly after close for up to 50% of total cost for materials only After all work, 100%, is complete one final disbursement is made

No HUD Consultant Required….work with Contractors directly

Work on home to be livable within 30-days from close

Occupancy within first 60-days after close date

All work to be completed within 6-months of close date

General Contractor not required but preferred

Two Draws Only:

One shortly after close for up to 50% of total cost for materials only

After all work, 100%, is complete one final disbursement is made

The 203K-Streamline & M.I.P. Purchases: 1.75% Upfront & .55 Monthly Refinances: 1.5% Upfront & .50 Monthly

Purchases: 1.75% Upfront & .55 Monthly

Refinances: 1.5% Upfront & .50 Monthly

Appraisal Standards Appraisal with 2-comps. within 90-days Appraisal with 1-recently listed comp. Use 30% of Repair costs for added value Ex. $30,000 in repairs = $10,000 more value

Appraisal with 2-comps. within 90-days

Appraisal with 1-recently listed comp.

Use 30% of Repair costs for added value

Ex. $30,000 in repairs = $10,000 more value

Draws One shortly after the close Up to 50% of total costs Only for materials and soft costs One final after 100% of work is completed Venture collects contractors’ invoices Venture orders appraisal update Venture orders title update Venture submits this to investor Investor cuts checks to various contractors with borrower and contractor on the check

One shortly after the close

Up to 50% of total costs

Only for materials and soft costs

One final after 100% of work is completed

Venture collects contractors’ invoices

Venture orders appraisal update

Venture orders title update

Venture submits this to investor

Investor cuts checks to various contractors with borrower and contractor on the check

Example of Purchase Purchase Price + Repairs + Aprsl. Update + Title Update = Total Cost X 97.75% LTV X 96.5% in 2009 = Base Loan Max. Loan Allowed Appraised Value “ As Is” “ Subject To” 110% LTV of “Subject To” $212,500 As Is $225,000 Subject To X 1.1 = $247,500 Max Loan

Purchase Price

+ Repairs

+ Aprsl. Update

+ Title Update

= Total Cost

X 97.75% LTV

X 96.5% in 2009

= Base Loan

Max. Loan Allowed

Appraised Value

“ As Is”

“ Subject To”

110% LTV of “Subject To”

$212,500 As Is

$225,000 Subject To

X 1.1

= $247,500 Max Loan

Purchase Example w/Numbers Purchase Price  $177,500 Repairs  $ 19,750FV=183K Admin: title & aprsl  $ 200 Total Cost  $197,450 LTV = 97.75%  X .9775 Base Loan Amount  =$193,007 Max. Loan = 183,000 x 1.1 = $201,300

Purchase Price  $177,500

Repairs  $ 19,750FV=183K

Admin: title & aprsl  $ 200

Total Cost  $197,450

LTV = 97.75%  X .9775

Base Loan Amount  =$193,007

Max. Loan = 183,000 x 1.1 = $201,300

Refinance w/203K-Streamline Payoffs  $183,790 Repairs  +$ 12,300  FV=188.5K Admin  +$ 200 CC & PP  + $ 7,500 Total Cost  =$203,790 Max. Loan: 188,500 x 1.1 = $207,350 Total Cost is Covered: Can Roll In CC & PP

Payoffs  $183,790

Repairs  +$ 12,300  FV=188.5K

Admin  +$ 200

CC & PP  + $ 7,500

Total Cost  =$203,790

Max. Loan: 188,500 x 1.1 = $207,350

Total Cost is Covered: Can Roll In CC & PP

Challenging FHA Files Approved but has a 48% back end ratio Approved but housing ratio is 38-40% Other issues… FHA has 10-Approved Comp. Factors

Approved but has a 48% back end ratio

Approved but housing ratio is 38-40%

Other issues…

FHA has 10-Approved Comp. Factors

10-Comp. Factors Allowed by FHA House payment equal to or less than current pmt Large down payment  10% or more Conservative credit use and savings history Previous house pmt. DTI has always been high Minimal increase in payment 3-Months reserves or more

House payment equal to or less than current pmt

Large down payment  10% or more

Conservative credit use and savings history

Previous house pmt. DTI has always been high

Minimal increase in payment

3-Months reserves or more

10-FHA Comp. Factors Substantial non-taxable income, Grossed Up Documentable income not included in effective inc. Food stamps, public benefits Potential for increased earnings Relocation of a primary wage earner: Trailing spouse expected to find similar work Within reasonable time after relocation Underwriter will confirm hiring likely-hood

Substantial non-taxable income, Grossed Up

Documentable income not included in effective inc.

Food stamps, public benefits

Potential for increased earnings

Relocation of a primary wage earner:

Trailing spouse expected to find similar work

Within reasonable time after relocation

Underwriter will confirm hiring likely-hood

Patti Mazzara MMS Venture Development Minnesota Mortgage Broker Works for YOU  Your pipeline is my pipeline Calls, email, office  Wherever you need me Work 6-days a week until 9-pm Three Defining Characteristics Honest Caring Knowledgeable

Works for YOU  Your pipeline is my pipeline

Calls, email, office  Wherever you need me

Work 6-days a week until 9-pm

Three Defining Characteristics

Honest

Caring

Knowledgeable

FHA, 203K-Streamline Venture Development Inc Minnesota Mortgage Broker 952.285.4319 [email_address] http://www.ventureloanapp.com