A Complete Guide to the CalSTRS 80/17 Purchase Loan Thank You for Attending 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 Financing Options 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

The Purpose and Goals of this Class

To Create and Empower Home Owners

Educate you about the current California Real Estate market and Financing Options

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

A Complete Guide to the CalSTRS 80/17 Purchase Loan Topics We Will Cover In This Class Overview of California Real Estate Market A Complete Guide to CalSTRS 80/17 Things you should know about getting started Wrap Up and Take Aways

Topics We Will Cover In This Class

Overview of California Real Estate Market

A Complete Guide to CalSTRS 80/17

Things you should know about getting started

Wrap Up and Take Aways

A Complete Guide to the CalSTRS 80/17 Purchase Loan Topics We Will Cover In This Class 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 Write number down now in case you get disconnected 1-866-667-6724

Topics We Will Cover In This Class

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

Write number down now in case you get disconnected

1-866-667-6724

Overview of the California Real Estate Market Being At The Right Place / Right Time What it means to be in a Buyer’s Market Supply and demand Many homes for sale Few home buyers in market Credit market offers few options Why CA Market is a “Perfect Storm” Affordability Factor up Median Home Prices Down Specialty Programs for Home Buyers

Being At The Right Place / Right Time

What it means to be in a Buyer’s Market

Supply and demand

Many homes for sale

Few home buyers in market

Credit market offers few options

Why CA Market is a “Perfect Storm”

Affordability Factor up

Median Home Prices Down

Specialty Programs for Home Buyers

Overview of the California Real Estate Market Most California home prices have dropped more than 20% since July of 2007

Most California home prices have dropped more than 20% since July of 2007

Overview of the California Real Estate Market Many California home prices have dropped more than 30% since July of 2007

Many California home prices have dropped more than 30% since July of 2007

California Real Estate Market in the News HEADLINE: Southern California home sales jump 65 percent in September Mercury News, Silicon Valley – Oct. 20 th , 2008 LOS ANGELES — Southern California home sales jumped 65 percent in September from a year ago, as plummeting prices fueled by foreclosures lured more buyers. Last month's median home price in the six-county region fell 33.2 percent to $308,500, compared with $462,000 in September 2007.

HEADLINE: Southern California home sales jump 65 percent in September

Mercury News, Silicon Valley – Oct. 20 th , 2008

LOS ANGELES — Southern California home sales jumped 65 percent in September from a year ago, as plummeting prices fueled by foreclosures lured more buyers.

Last month's median home price in the six-county region fell 33.2 percent to $308,500, compared with $462,000 in September 2007.

California Real Estate Market in the News HEADLINE: Bargains Boost SoCal Home Sales a record 67% in October! OC Register, Nov. 18 th Bargain-basement sales helped pull down home prices in the SoCal region last month and boosted the number of transactions by a record 67% The median price of a Southern California home fell to $300,000 in October — the lowest since April 2003 and down 41% below the peak price hit in the spring and summer of 2007.

HEADLINE: Bargains Boost SoCal Home Sales a record 67% in October!

OC Register, Nov. 18 th

Bargain-basement sales helped pull down home prices in the SoCal region last month and boosted the number of transactions by a record 67%

The median price of a Southern California home fell to $300,000 in October — the lowest since April 2003 and down 41% below the peak price hit in the spring and summer of 2007.

A Complete Guide to CalSTRS 80/17 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 Any eligible borrower makes family eligible

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

Any eligible borrower makes family eligible

A Complete Guide to CalSTRS 80/17 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 Broadview Mortgage is an approved Lender on CalSTRS website - See link on site

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

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

A Complete Guide to CalSTRS 80/17 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 CalSTRS - No cost to lock or rate

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

CalSTRS - No cost to lock or rate

A Complete Guide to CalSTRS 80/17 CalSTRS 80/17 Compared to FHA 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 If you are eligible and qualify for the CalSTRS 80/17 there is simply no comparison. Period

CalSTRS 80/17 Compared to FHA

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

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

A Complete Guide to CalSTRS 80/17 CalSTRS 80/17 – Max Loan Amounts Conforming Loan Amount Up to $417,000 First mortgage loan amount $521,250 Max Purchase Price Jumbo Loan Amount Up to $536,082 First mortgage loan amount Max total loan amounts $650,000 Up to $670,103 Max Purchase Price Jumbo interest rate is typically 1% higher

CalSTRS 80/17 – Max Loan Amounts

Conforming Loan Amount

Up to $417,000

First mortgage loan amount

$521,250 Max Purchase Price

Jumbo Loan Amount

Up to $536,082

First mortgage loan amount

Max total loan amounts $650,000

Up to $670,103 Max Purchase Price

Jumbo interest rate is typically 1% higher

A Complete Guide to CalSTRS 80/17 CalSTRS 80/17 – Max Loan Amounts Updated Conforming Loan Amounts As of December 13 th – Fannie Mae DU updated High Cost Areas - Up to $625,500 As of today 12/19/2008 CalSTRS has not updated their website to reflect Conforming and Jumbo limits It is possible that if you are in a high cost area that conforming rates apply if eligible

CalSTRS 80/17 – Max Loan Amounts

Updated Conforming Loan Amounts

As of December 13 th – Fannie Mae DU updated

High Cost Areas - Up to $625,500

As of today 12/19/2008 CalSTRS has not updated their website to reflect Conforming and Jumbo limits

It is possible that if you are in a high cost area that conforming rates apply if eligible

A Complete Guide to CalSTRS 80/17 CalSTRS 80/17 – Property Qualifications Eligible Properties Single Family Residence - Detached Condominiums / Townhomes - Attached Planned Urban Development (PUD) Must be owner Occupied Must be located in State of California 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 – Property Qualifications

Eligible Properties

Single Family Residence - Detached

Condominiums / Townhomes - Attached

Planned Urban Development (PUD)

Must be owner Occupied

Must be located in State of California

Cannot own any other properties

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

A Complete Guide to CalSTRS 80/17 CalSTRS 80/17 – Loan Structure Max 1 st Loan Amount - 80% Qualify on 80% Only Increases your purchasing power Max 2 nd Loan Amount - 17% No payments for first 5 years 30 Year fixed rate loan only Same interest rate for both loans One time free float down – both loans Anytime in first 40 days

CalSTRS 80/17 – Loan Structure

Max 1 st Loan Amount - 80%

Qualify on 80% Only

Increases your purchasing power

Max 2 nd Loan Amount - 17%

No payments for first 5 years

30 Year fixed rate loan only

Same interest rate for both loans

One time free float down – both loans

Anytime in first 40 days

A Complete Guide to CalSTRS 80/17 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 Although you qualify on first mortgage only, we will always send you a good faith estimate with total payment

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

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

A Complete Guide to CalSTRS 80/17 CalSTRS 80/17 – Down Payment Down payment requirements 3% down payment 1% from buyer’s own funds Sources of Down Payment and Closing Costs Down Payment - Borrower's own funds CalPERS can borrow for DP or Closing Costs Down Payment - Gift from relative Down Payment – Grant from government agency Closing Costs - Seller contributions up to 3% Closing Costs - Borrower's own funds Closing Costs - Gift from relative

CalSTRS 80/17 – Down Payment

Down payment requirements

3% down payment

1% from buyer’s own funds

Sources of Down Payment and Closing Costs

Down Payment - Borrower's own funds

CalPERS can borrow for DP or Closing Costs

Down Payment - Gift from relative

Down Payment – Grant from government agency

Closing Costs - Seller contributions up to 3%

Closing Costs - Borrower's own funds

Closing Costs - Gift from relative

A Complete Guide to CalSTRS 80/17 Down Payment and Closing Cost options for Members of CalPERS Maximum purchase price $350,000 Can borrow up to 5% of value of home Up to 50% of Member’s current contribution Minimum $1,000 Maximum $18,421 Personal loan secured by PERS Not borrowed from PERS account Minimum loan term is 1 year / Max is 15 years Must be primary residence Cannot have any other CalPERS personal loans

Down Payment and Closing Cost options for Members of CalPERS

Maximum purchase price $350,000

Can borrow up to 5% of value of home

Up to 50% of Member’s current contribution

Minimum $1,000

Maximum $18,421

Personal loan secured by PERS

Not borrowed from PERS account

Minimum loan term is 1 year / Max is 15 years

Must be primary residence

Cannot have any other CalPERS personal loans

A Complete Guide to CalSTRS 80/17 Other CalSTRS 80/17 Highlights No Income limits You do not have to be a first time homebuyer You cannot own any other properties Minimum FICO Scores 620 for Loan Amounts up to $400,000 680 for Loan Amounts up to $650,000 Combined 1 st & 2 nd Loans Interest Rate lock requires Property Address Typically rate is locked when offer is accepted If offer falls out – Rate lock is lost as well

Other CalSTRS 80/17 Highlights

No Income limits

You do not have to be a first time homebuyer

You cannot own any other properties

Minimum FICO Scores

620 for Loan Amounts up to $400,000

680 for Loan Amounts up to $650,000

Combined 1 st & 2 nd Loans

Interest Rate lock requires Property Address

Typically rate is locked when offer is accepted

If offer falls out – Rate lock is lost as well

A Complete Guide to CalSTRS 80/17 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 Much lower cost than FHA but may require more money brought to the closing table

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

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

A Complete Guide to CalSTRS 80/17 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 Interest rate can be locked once offer accepted CalPERS members can use personal loan for closing costs or down payment

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

Interest rate can be locked once offer accepted

CalPERS members can use personal loan for closing costs or down payment

A Complete Guide to CalSTRS 80/17 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! Escrow can often be delayed without penalty

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!

Escrow can often be delayed without penalty

Things you should know about getting started Very First Step – Get pre-approved for financing Get pre-approved for the maximum you can qualify for – Be prepared for competition Work with a buyer’s agent – Fiduciary duties require that your best interests are represented Work with a Real Estate Agent that is familiar with these special home purchase programs Work with a Lender that is already familiar with this program

Very First Step – Get pre-approved for financing

Get pre-approved for the maximum you can qualify for – Be prepared for competition

Work with a buyer’s agent – Fiduciary duties require that your best interests are represented

Work with a Real Estate Agent that is familiar with these special home purchase programs

Work with a Lender that is already familiar with this program

Wrap up and Take Aways Home prices have dropped 20-50% and homes are twice as affordable as they were 2 or 3 years ago Teachers and Employees in California Public Schools and Community Colleges have more purchasing power than many other buyers in the market Opportunities like this happen once in a lifetime Educate yourself on the process. Do not take anyone’s “word for it”.

Home prices have dropped 20-50% and homes are twice as affordable as they were 2 or 3 years ago

Teachers and Employees in California Public Schools and Community Colleges have more purchasing power than many other buyers in the market

Opportunities like this happen once in a lifetime

Educate yourself on the process. Do not take anyone’s “word for it”.

Wrap up and Take Aways We are the Lender for all CalSTRS, CalPERS, CalHFA, FHA & VA, Conventional and Jumbo Loans We can Refer you to a qualified Real Estate Agent in your area 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

We are the Lender for all CalSTRS, CalPERS, CalHFA, FHA & VA, Conventional and Jumbo Loans

We can Refer you to a qualified Real Estate Agent in your area

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

Upcoming Home Buyer Classes A Complete Guide to Buying Foreclosures and Short Sales Real Estate Agent Round Table Open Q&A with Experienced Buyer’s Agents talk about buying home in this market A First Time Home Buyer’s Complete Guide to Credit and Qualifying A First Time Home buyer’s Complete Guide to Closing Costs and the Good Faith Estimate Check back often for upcoming classe s

A Complete Guide to Buying Foreclosures and Short Sales

Real Estate Agent Round Table

Open Q&A with Experienced Buyer’s Agents talk about buying home in this market

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

A First Time Home buyer’s Complete Guide to Closing Costs and the Good Faith Estimate

Check back often for upcoming classe s

Thank you for Attending Please Join us for one of our other educational home buyer classes Presented By: Broadview Mortgage Corp. Presenter: Scott Schang Contact Information: Phone: 866-667-6724 [email_address]