The document summarizes key points that were presented at a town hall meeting about the current real estate market and opportunities for first-time home buyers using Federal Housing Administration (FHA) loans. It discusses the decline in home prices and rise in foreclosures since 2007. It then outlines benefits of FHA loans for first-time buyers, such as low down payment requirements, more flexible credit guidelines, and the ability to use gift funds and cosigners. It provides details on FHA loan limits, eligibility requirements, and underwriting guidelines.

1. Welcome to the… Town Hall Meeting Mission Viejo City Hall Sponsored by: David Crugnale Executive Vice President Mirad Financial Group Speakers : Doug Sheridan President | CEO Home-n-Loans Travis Pham Chief U. S. Department of Housing and Urban Development Processing & Underwriting Division Santa Ana Home Ownership Center Santa Ana, CA

2. “Home prices fall 14.1% in March” - NY Times, 3/08 “Foreclosures rose 53% in June, bank seizures triple” - Bloomberg News, 7/10/08 “Foreclosure activity is the highest since the Great Depression of the 1930s” - Realty Track, 7/10/08 The Reality of Market Volatility “Falling home prices have created a cycle where shrinking equity drives home owners into foreclosure, which in turn further pushes down home prices” - S&P/ Case Shiller, 7/10/08

3. Market conditions have created an ideal environment for FHA borrowers; Identifying your ‘First Time Home Buyer’ target market will enable you to focus on potential ‘PURCHASE’ transactions in Orange County. FHA Loans are the best option for today’s First Time Home Buyer; and, In order to sell more homes, you need to speak FHA . The Power of FHA Lending

4. Falling prices open up home buying for many more Americans “Homes are the biggest bargain since 2004” Housing affordability * in Orange County has increased from 4.4% in Q1 2007 to 17.4% in May, 2008 - CNN, May 20, 2008 More people can afford the average priced house in Orange County. Turning Misfortune into Opportunity * Affordability is defined as the ability of median Income households to qualify for a greater number of residences.

5. FHA is the largest insurer of mortgages in the world, insuring nearly 34 million properties since its inception in 1934; The Federal Government created the FHA loan programs to encourage homeownership throughout the country, stabilize and revitalize communities, and promote economic growth; and, FHA loan guidelines are less restrictive than conventional and other types of loan programs making it easier for potential borrowers to qualify. Federal Housing Administration FACTS

6. Minimum 3% cash investment from buyer; Down payment assistance programs available; No minimum FICO per FHA guidelines (under 580 FICO requires DU approval); FHA Benefits No cash reserves; Seller not required to pay buyer non-allowables; Gifts and cosigners allowed; Loan is assumable; No seasoning on recently listed properties; and, Seller can contribute up to 6% of sales price + all borrowers prepaid expenses.

7. FHA loans are limited to owner occupied, primary residences only; Property types include: Single Family Residences; FHA Property Eligibility Town homes and condominiums – FHA approved projects; Multi-family dwellings – 1 to 4 units; and, Manufactured homes - HUD guidelines apply

8. FHA Loan Limits for Orange County

9. Basic Loan Requirements: Eligible Borrowers: United States Citizen; FHA Eligibility Permanent Resident Alien: Must have evidence of permanent residence status; Non-Permanent Resident Alien: Must be eligible to work in the U.S.; Inter Vivos revocable trusts; and, Must be the first trust deed; Must be the borrower’s principal residence; and, Must occupy within 60 days of closing. Non-occupant co-borrowers.

10. Foreclosure: Delinquent Credit 3 year minimum seasoning requirement from foreclosure completion. Bankruptcy: Chapt. 7: 2 year minimum seasoning requirement from discharge date. Chapt. 13: Can remain open with at least 1 full year of documented repayment history reflecting no lates and permission from the court / counseling agency to enter into the mortgage transaction. Collections and Charge-offs: Not typically required to be paid, but can be taken into consideration for loan approval purposes.

11. Tax Liens, Judgments, and Federal Liens: Delinquent Credit (continued) Required to be paid. For Judgments, an exception may be considered if the borrower has a repayment plan with 6 months paid-as-agreed repayment (Note: This is at the discretion of the underwriter). Borrower(s) with an open Federal Lien are ineligible for financing.

12. FHA General Guidelines All FHA loans are full-income, full-assets documentation; Debt ratios are 31% / 43%; Guideline DTI can be exceeded with compensating factors; and, Ratios over 50% need DU approval or a cosigner.

13. Thank you for coming! Town Hall Meeting Mission Viejo City Hall Sponsored by: