A Complete Guide to the CalSTRS 80/17 Purchase Loan - Updated 1-15-09

A Complete Guide to the CalSTRS 80/17 Purchase Loan Thank You for Attending We Will Begin in a Moment Class will begin at 7:00pm Presented By: Broadview Mortgage Corporation Presenter: Scott Schang Contact Information: Phone: 866-667-6724 [email_address]

A Complete Guide to the CalSTRS 80/17 Purchase Loan

The Purpose and Goals of this Class

To Create and Empower Home Owners

Educate you about the current California Real Estate market and Specialty Financing Options for Education Professionals

Empower you with the ability to make educated decisions in the home buying process

Empower you with the ability to make educated decisions in the home buying process

Introduce you to Broadview Mortgage Corporation as your CalSTRS 80/17 expert

Topics We Will Cover In This Class

A Complete Guide to CalSTRS 80/17

100% option for members of CalPERS

IRS Guidelines for $7,500 Federal Tax Credit just released – The Details

IRS Guidelines for $7,500 Federal Tax Credit just released – The Details

Wrap Up and Take Aways

Ask Questions throughout presentation

You may type questions in at any time during the presentation – Questions box on your screen

CalSTRS 80/17 specialists are standing by to answer your questions during the presentation

The only dumb question is the one you don’t ask

The only dumb question is the one you don’t ask

Write number down now in case you get disconnected

1-866-667-6724

Who’s Eligible for a CalSTRS 80/17?

Any employee of a California public school or community college

Can work in any capacity

Can work in school district

Pay check stub from public school system

If you are eligible for CalSTRS pension benefits

Provide certificate of eligibility

Do not have to be currently employed

Do not have to be currently employed

Any eligible borrower makes family eligible

How CalSTRS benefits from the 80/17

CalSTRS pension fund invests in mortgage notes as mortgage backed securities

CalSTRS is not a lender and does not do loans

Payments go back into CalSTRS pension fund

Contributes to the growth and stability of your retirement system as a member of CalSTRS

Contributes to the growth and stability of your retirement system as a member of CalSTRS

Broadview Mortgage is an approved Lender on CalSTRS website - See link on site

CalSTRS 80/17 Compared to FHA

Lower Down Payment than FHA

3.5% Down as of January 1 st , 2009

Interest Rates as compared to FHA

No UPFRONT Mortgage Insurance Premium

FHA increased to 1.75%

No MONTHLY Mortgage Insurance

FHA increased to .55%

FHA vs CalSTRS Closing Costs

FHA lower up front / CalSTRS lower total cost

FHA lower up front / CalSTRS lower total cost

CalSTRS - No cost to lock or rate

FHA is a GREAT program as a Plan B

Low down payment requirements

Low up front closing costs

Aggressive interest rates

6% seller concessions from seller

Flexible qualifying guidelines

No penalty for lower credit scores

CalPERS members may be eligible for 100% financing using FHA 1 st mortgage

CalPERS members may be eligible for 100% financing using FHA 1 st mortgage

If you are eligible and qualify for the CalSTRS 80/17 there is simply no comparison. Period

CalSTRS 80/17 – Max Loan Amounts

Conforming Loan Amount

Up to $417,000

Up to $417,000

First mortgage loan amount

Up to $417,000

$521,250 Max Purchase Price

Up to $417,000

Jumbo Loan Amount

Up to $417,000

Jumbo Loan Amount

Up to $536,082

Up to $417,000

Jumbo Loan Amount

Up to $536,082

Up to $417,000

Jumbo Loan Amount

Up to $536,082

Max total loan amounts $650,000

Up to $417,000

Jumbo Loan Amount

Up to $536,082

Up to $670,103 Max Purchase Price

Up to $417,000

Jumbo Loan Amount

Up to $536,082

Up to $670,103 Max Purchase Price

Jumbo interest rate is typically 1% higher

CalSTRS 80/17 – Property Qualifications

Eligible Properties

Eligible Properties

Single Family Residence - Detached

Eligible Properties

Condominiums / Townhomes - Attached

Eligible Properties

Planned Urban Development (PUD)

Eligible Properties

Must be owner Occupied

Eligible Properties

Must be located in State of California

Eligible Properties

Cannot own any other properties

Eligible Properties

Cannot own any other properties

Mobile home not on a permanent foundation and on leased lot/park is not considered real property

CalSTRS 80/17 – Loan Structure

Max 1 st Loan Amount - 80%

Qualify on 80% Only

Qualify on 80% Only

Increases your purchasing power

Qualify on 80% Only

Max 2 nd Loan Amount - 17%

Qualify on 80% Only

No payments for first 5 years

Qualify on 80% Only

30 Year fixed rate loan only

Qualify on 80% Only

Same interest rate for both loans

Qualify on 80% Only

Same interest rate for both loans

One time free float down – both loans

CalSTRS 80/17 – Second Mortgage

Second Mortgage Loan

Deferred payments for 5 Years

Simple interest accrues for deferred period

Accrued interest added to principle balance

Fully amortized over remaining 300 months

No surprises guarantee - You will know exactly what your payments will be

No surprises guarantee - You will know exactly what your payments will be

Although you qualify on first mortgage only, we will always send you a good faith estimate with total payment

CalSTRS 80/17 – Down Payment

Down payment requirements

3% down payment

1% from buyer’s own funds

3% down payment

Sources of Down Payment and Closing Costs

3% down payment

Down Payment - Borrower's own funds

3% down payment

Down Payment - Gift from relative

3% down payment

Down Payment – Grant from government agency

3% down payment

Closing Costs - Seller contributions up to 3%

3% down payment

Closing Costs - Borrower's own funds

3% down payment

Closing Costs - Borrower's own funds

Closing Costs - Gift from relative

Additional Low and No Down Payment Options for CalPERS Members

Use FHA 1 st to 96.5% LTV with personal loan

Maximum purchase price $350,000

Can borrow up to 5% of value of home

Up to 50% of Member’s current contribution

Maximum $18,421

Maximum $18,421

Personal loan secured by PERS

Maximum $18,421

Not borrowed from PERS account

Maximum $18,421

Minimum loan term is 1 year / Max is 15 years

Maximum $18,421

Must be primary residence

Maximum $18,421

Can be used toward down payment only

Maximum $18,421

Can be used toward down payment only

Attend 100% Financing for CalPERS class

Other CalSTRS 80/17 Highlights

No Income limits

No Income limits

You do not have to be a first time homebuyer

No Income limits

You cannot own any other properties

No Income limits

Minimum FICO Scores

No Income limits

Minimum FICO Scores

620 for Loan Amounts up to $400,000

No Income limits

Minimum FICO Scores

No Income limits

Minimum FICO Scores

Combined 1 st & 2 nd Loans

No Income limits

Minimum FICO Scores

Interest Rate lock requires Property Address

No Income limits

Minimum FICO Scores

Typically rate is locked when offer is accepted

No Income limits

Minimum FICO Scores

Typically rate is locked when offer is accepted

If offer falls out – Rate lock is lost as well

CalSTRS 80/17 - What Makes it Different

Cannot buy interest rate down

Below market / Set by CalSTRS

Cannot “roll in” closing costs into rate

Fannie Mae – Pricing Adjustments

Declining Market - .25%

High LTV Flex 97 - .5%

Risk based credit score pricing

None at 740 FICO

None at 740 FICO

Much lower cost than FHA but may require more money brought to the closing table

CalSTRS 80/17 – Review

Only 3% down payment required

No upfront mortgage insurance premium

No monthly mortgage insurance premium

Qualify for 80% first mortgage only

17% second mortgage deferred for 5 years

No income or first time home buyer limits

Up to 3% seller concessions for closing costs

Rates set by CalSTRS

One time Free float down

One time Free float down

Interest rate can be locked once offer accepted

Bait and Switch “Red Flags”

Community programs designed to benefit specific members of the education community

CalSTRS loans have fixed rates and fees

Buyer Benefit - Lenders can’t charge more

What to watch out for……

Agent recommends lender but not program

Lender isn’t CalSTRS 80/17 Expert

FHA is presented as an option/solution

Underwriting guidelines changed

Approval can not be changed if locked

CalSTRS loans can close in weeks – Call us!

CalSTRS loans can close in weeks – Call us!

Escrow can often be delayed without penalty

$7,500 Federal Tax Credit

No-interest loan paid back over 15 years

Begin paying back 2 years after claim

Must purchase on or before July 1 st , 2009

Between April 8th, 2008 and July 1 st , 2009

Must be first time home buyer

Can not have owned in past 3 years

10% of purchase price up $7,500

$7,500 - Married filing joint or Single taxpayer

$7,500 - Married filing joint or Single taxpayer

Married filing separate $3,750

Home bought in 2008 can be claimed on 2008 returns

Home bought in 2009 can be claimed on 2008 (or amended 2008) return

Income limit is $150,000 for married couple

Phase out maximum is $170,000

Income limit is $75,000 for single taxpayer

Loan is paid back in 15 equal installments

Deducted from refund on future returns

Deducted from refund on future returns

Added to tax liability on future returns

You would be ineligible for Tax Credit if:

Your income exceed the phase-out range

You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild

You stop using your home as your main home

You sell your home before the end of the year

You are a nonresident alien

Your home financing comes from tax-exempt mortgage revenue bonds - CalHFA

Your home financing comes from tax-exempt mortgage revenue bonds - CalHFA

You owned another main at any time during the three years prior to the date of purchase

Wrap up and Take Aways

We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, VA, Conventional and Jumbo Loans

We are a direct Lender that specializes in FHA Refinance, Streamline and Purchase loans.

We are more than happy to be your “second opinion” if you are already working with someone

We are more than happy to be your “second opinion” if you are already working with someone

We are committed to educating and empowering homeowners - Join us for future classes

You will receive a “Thank you” email with links to the information we’ve talked about here today

Copy of power point presentation

Secure on-line loan application

Links to tools and resources we talk about in all of our classes

Link to CalSTRS website to follow rates

Dream Home Finder request

A schedule of all upcoming classes

Upcoming Home Buyer Classes

A Complete Guide to Buying Foreclosures and Short Sales

A Complete Guide to Closing Costs and the Good Faith Estimate

A Complete Guide to the CalSTRS 80/17 Home Purchase Program

A First Time Home buyer’s Complete Guide to Credit and Qualifying

A Complete Guide to the CalPERS Home Loan Program – No down option

A First Time Home Buyer’s Complete Guide to Hiring a Real Estate Agent and Finding the Best Deals

A First Time Home Buyer’s Complete Guide to Hiring a Real Estate Agent and Finding the Best Deals

Check back often for upcoming classes

Thank you for Attending You input is Valuable Please complete 2 question survey when you log off Presented By: Broadview Mortgage Corp. Presenter: Scott Schang Contact Information: Phone: 866-667-6724 [email_address]