capturing new and emerging market opportunities Shelley Ervin, CML

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1 capturing new and emerging market opportunities Shelley Ervin, CML

2 chfa? Why in the world did they have the bond program come talk about new and emerging markets?

3 chfa fact or fiction? first time buyers? credit challenged? fha only? chfa takes forever! NO! NO! NO! NO! you must pay back the DPA? NOT anymore! complicated income calculation! NOT anymore! impossible to use chfa in this market??? (you may be surprised by our data)

4 chfa s activity in colorado In 2015, CHFA purchased more than $700 million in first mortgage loans, representing over 3,800 affordable homeownership opportunities for Colorado households. 84% of CHFA borrowers in 2015 were first time homebuyers, over 80% of whom used CHFA s DPA Grant 84% of non-first time homebuyers also used the CHFA DPA Grant

5 chfa loan production and 2015 production and % increase % change total loan production $421,719,050 $722,775,774 71% number of loans 2,483 3,843 55% year over year q1 production Q Q Q1 2016* change Q to Q Loan production $87,217,208 $117,991,711 $141,203,134 20% number of loans % *Through 3/24/2016

6 production growth total q1 first mortgage production $160,000,000 $141,203,134 $140,000,000 $117,991,711 $120,000,000 $100,000,000 $80,000,000 $87,217,208 $60,000,000 $40,000,000 $20,000,000 $- Q Q Q (through 3.24)

7 who s buying with chfa? Let s take a look at who is using CHFA to purchase a home; you might be surprised

8 annual average loan amounts Statewide, CHFA s average loan amount in 2015 rose to approximately $188,000, keeping pace with averages seen by many of our lenders for their portfolios. average loan amount 2014 and % change average loan amount $169,843 $188,076 11%

9 q1 average loan amounts And the upward trend in loan amounts continues, consistent with Colorado s growing market: $250,000 $200,000 $150,000 $100,000 $50,000 average loan amount - q $164,251 $174,803 $198,878 $- Q Q Q1 2016*

10 average credit scores CHFA s borrower credit scores remain very strong, averaging 693 in And scores are particularly strong for our conventional products: average credit score by loan type Loan Type average credit score government guaranteed 680 conventional 730

11 buyers by generation who says Millennials aren t buying? They are buying with CHFA, representing the largest generation of CHFA homebuyers in 2015: generation total loan production average loan amount % government guaranteed % conventional millennial $413,375,407 $186,121 71% 29% generation X $214,717,065 $196,808 79% 22% baby boomer $88,587,565 $178,965 81% 19%

12 loan type and characteristics FHA loans continue to comprise the majority of CHFA s lending, and were responsible for the lion s share of the growth in CHFA s 2015 production: production by loan type 2014 and 2015 number of first number of first % change % change in lien loans lien loans number total loan total loan total loan average loan average loan Loan Type of loans production 2014 production 2015 production amount 2014 amount 2015 FHA 1,431 2, % $236,708,849 $559,174, % $165,415 $190,519 VA % $3,232,751 $5,621,639 74% $190,162 $181,343 USDA-RD % $2,577,516 $985,504-62% $117,160 $164,251 Conventional 1,032 1,004-3% $182,749,454 $181,130,840-1% $177,083 $180,409

13 what are people buying with chfa? What are borrowers buying with CHFA? Again, you might be surprised..

14 property types As you might expect, single family detached properties dominate CHFA s production. However, what you might not expect is that CHFA saw almost a 100% increase in condominiums loans, and a 60% increase in attached PUD loans from 2014 to property type total loan production 2014 total loan production 2015 Dwelling Type number loans 2014 number of 2015 % change Condominium % $43,114,173 $94,364,789 Manufactured Housing % $13,763,187 $21,921,296 Modular Housing % $767,781 $2,650,474 Single Family 1,782 2,712 52% $321,551,613 $547,675,934 PUD attached % $46,071,816 $80,299,743

15 attached properties by location As you might expect, attached property purchases were more dominant in urban markets. County 2015 $ Loan production Arapahoe County $54,131,007 Jefferson County 31,810,114 Adams County 30,792,084 Denver County 22,371,837 El Paso County 11,483,950 Douglas County 7,524,365 Weld County 4,767,703 Boulder County 3,367,857 Larimer County 1,849,040

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17 property type by generation There is little variation among generations in property type preference, but attached product maintains a strong presence in both the Millennial and Baby Boomer generations.: % single generation family detached % attached / PUD % manufactured millennial 68% 29% 3% generation X 71% 26% 4% baby boomer 61% 34% 5%

18 where are people buying with chfa? More surprises..

19 loan production by county top 10 counties County % change Adams $ 82,376,667 $ 140,835,834 71% Arapahoe $ 62,167,619 $ 131,498, % Denver $ 54,675,170 $ 93,131,165 70% Weld $ 43,420,125 $ 80,367,359 85% Jefferson $ 40,475,293 $ 63,066,290 56% El Paso $ 39,122,111 $ 75,384,723 93% Pueblo $ 19,941,569 $ 24,076,266 21% Douglas $ 15,887,673 $ 24,321,685 53% Mesa $ 15,281,653 $ 18,618,181 22% Larimer $ 12,405,528 $ 18,122,994 46%

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22 average loan $ by county: and 2016 ytd top 10 counties , ytd 2016 County YTD 2016 Adams $ 178,372 $ 203,279 $ 217,076 Arapahoe $ 175,953 $ 193,069 $ 193,850 Denver $ 175,241 $ 200,811 $ 214,339 Weld $ 175,836 $ 193,669 $ 210,646 Jefferson $ 182,708 $ 197,865 $ 228,447 El Paso $ 155,351 $ 162,473 $ 171,370 Pueblo $ 117,213 $ 119,730 $ 127,674 Douglas $ 223,847 $ 250,017 $ 243,711 Mesa $ 145,100 $ 150,310 $ 154,633 Larimer $ 194,165 $ 212,542 $ 203,347

23 loan production by city top 10 cities City % change Aurora $ 54,433,707 $ 117,121, % Denver $ 68,919,866 $ 116,507,489 69% Colorado Springs $ 32,631,385 $ 66,228, % Thornton $ 22,171,015 $ 40,390,233 82% Greeley $ 17,524,646 $ 32,057,260 83% Lakewood $ 11,677,280 $ 22,299,941 91% Westminster $ 14,399,185 $ 21,095,839 47% Commerce City $ 11,193,284 $ 20,158,227 80% Pueblo $ 14,881,910 $ 17,599,086 18% Littleton $ 13,132,825 $ 15,508,011 18%

24 why is this important to you? CHFA is experiencing dramatic growth +71% increase in 2015 vs % increase YTD 2016 CHFA s biggest increases are coming from the front range CHFA s biggest generational group is millennials CHFA has products that are condo friendly Is CHFA an opportunity for you or your company?

25 chfa can help you! Ideas, tools, and resources.

26 convince your real estate partners chfa is a viable option in metro markets show them the money! (with chfa data) chfa is fast-one day turn time no delay getting to closing chfa can be a tool to get sellers motivated chfa allows borrowers to own one other residential property seller afraid to list in case they can t find a new home? seller needs the equity in existing for down payment on new home? use CHFA with DPA to buy the new home (FHA, VA, RD)* borrower already has an FHA loan on existing? You can refinance that property into a conventional loan (additional transaction for you) then sell existing, or keep it as income property *non available with chfa conventional products

27 convince your real estate partners chfa might save the deal if your borrower gets involved in a multiple offer situation price gets bid up, and appraisal comes in below offered price borrower now has to use own funds (intended for down payment) to pay the difference between appraised value and agreed upon purchase price List price $250,000 Winning offer $261,000 Appraisal $252,000 Borrower s funds $12,000 (intended for down payment and costs) Borrower now must use $9,000 of own funds to pay difference between appraised value and agreed upon purchase price; use CHFA for DPA (up to 3% of loan amount) and up to 2% for costs. Go to closing on time!

28 convince your real estate partners real estate agents still not warming up to fha offers? chfa has conventional products chfa has a conventional product with no MI! this product might give your borrower the lowest payment option with the lowest down payment requirement borrower must have 3% down payment (own funds, gift, DPA from outside chfa) competitive rates due to no loan level pricing adjustments chfa has conventional products with DPA and reduced MI this product is available with or without, chfa dpa without chfa dpa, our rates are at or below market pmi coverage is 18% at 97% ltv Compare to 35% for standard, and 25% for HomeReady

29 create new real estate partners chfa loves condos and attached PUD s attached product represented 25% of our 2015 production our conventional products have no loan level pricing adjustments find listings for condos that indicate no FHA financing conventional condo guidelines have no occupancy requirement when subject property will be owner occupied no llpa s mean no condo adjustment to rate chfa s conventional product offers DPA, have reduced MI (lower than standard, lower than HomeReady) you could earn referrals from the listing real estate agent by sharing this knowledge

30 create new real estate partners chfa will accept loans secured by properties which are restricted by affordable covenants and/or deed restrictions lender must review covenants and/or deed restriction to ensure they meet with insurer / guarantor guidelines a successful (and efficient) strategy might be to specialize in a particular affordable development creating this niche, could earn you the reputation of being able to get these types of properties closed, and a reason to contact real estate agents to let them know you can get them to the closing table

31 educate your real estate partners chfa offers continuing education to real estate professionals at no charge you can sponsor / organize a chfa continuing eduation class chfa teaches the class you find the location, and do the marketing you benefit by offering value and knowledge to the agents

32 convince yourselves and your buyers chfa continues to cut the red tape chfa now uses the lenders underwriting qualifying income! only the borrower s qualifying income (as calculated by the underwriter) will be used to determine if this loan meets CHFA s income limits chfa does not include income from occupants who are nonborrowers however, all occupants count towards the household, Count, when determining the chfa income limit; for example: income limit in metro Denver for 1-2 person household = $79,900 Income limit in metro Denver for 3+ person household = $91,800 chfa s down payment assistance is now a grant the grant is treated as a gift-no waiting period in order for the grant to be forgiven however, there is an EPO (early pay-off penalty) charged to lenders when the loan is refinanced prior to 6 payments being made to chfa

33 Top 10 reasons to consider chfa 10. no asset restriction 9. affordable covenants and deed restrictions allowed 8. chfa loves condos 7. more resources on our website-all new pre-recorded trainings 6. fewer training requirements for our lenders (but added resources to help lenders)

34 Top 10 reasons to consider chfa 5. no loan level pricing adjustments on conventional loans, and reduced MI 4. DPA is a grant 3. one day turn time 2. qualifying income used to determine chfa eligibility 1. we re in COLORADO!

35 Thank you! Shelley Ervin, Elfriede Leicht, Kim Johnson, Pam Francil, Kim Longworth,