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1 Free Money Financing Your Dream Home in Today's Market Though the current economic climate presents some challenges, the time to buy a home is now. Interest rates are low, money is available and sellers are willing to roll out the red carpet to entice a buyer to buy their home. Tips for Homebuyers All homebuyers must convince the lender that they deserve financing today and will keep up their end of the deal in making all their future payments on time. All mortgage loans today are full qualifying. We have more stringent lending practices then every before. Keep in mind when you are applying for a mortgage loan, an approval is based on the level of risk of the borrower and property. If you are a high risk buyer or business owner you aren t going to get an approval. If you lower your risk by being in compliance with the lending markets, having a good credit profile, a good personal credit score, good trade references, money in the bank you improve your chances of an approval. If you don t have all of those things to lower your risk, don t wait. Start now to improve your standing as a low risk borrower so as the credit markets loosen, and they will in due time, you are ready to take advantage of the programs that will be made available. If the property condition is poor, it will not qualify for financing. However, financing is available to purchase the home in its current condition, finance the repairs into the loan and have the repairs completed after closing. Lending Options for Repairs Researching your MLS for appropriate properties for you buyer, keep in mind today, not to max out their buying power in the front end. Leave room for the buyer to select a home that needs some TLC and be able to finance into their loan amount for limited repairs and upgrades, i.e. the buyer qualifies for $150,000 purchase, show home that are below $140,000 leaving room to finance $10,000 for home revisions. For every $1,000 the buyer adds to their loan amount, it only changes their monthly payment around $4.00. FHA 203(b) - Escrow holdbacks are used to facilitate loan closings for properties that require no more than $5000 of repairs to meet FHA s minimum property requirements. Purchaser(s) are permitted to include in their mortgage an amount equal to 110% of the estimated cost of the repairs. All repairs are to be completed by the purchaser within 90 days of closing.

2 FHA 203(k) Streamline - The Streamline (K) program permits homebuyers to finance up to $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. The buyer's lender will order an after repaired appraisal as through the work has been completed and allow 6 months to complete the project. The FHA 203K is available for a one-to-four unit property. FHA Energy Efficient - Under the FHA EEM Program, a borrower can finance into the mortgage 100 percent of the cost of eligible energy efficient improvements, subject to certain dollar limitations, without an appraisal of the energy improvements and without further credit qualification of the borrower. The total cost of the improvements (including maintenance costs) must be less than the total present value of the energy saved over the useful life of the improvements. The cost of any improvement to the property that will increase the property's energy efficiency and that is determined to be "cost effective" is eligible for financing into the mortgage and its cost may be added to the mortgage amount up to the greater of 5 percent of the property's value (not to exceed $8000) or $4000. Fannie Mae HomePath Renovation - Allows a buyer to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation - up to 35% of the as completed value, no more than $35,000. Down payment (at least 3 percent) can be funded by the buyer s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer and renovation amount is based on an appraisal as completed value. No mortgage insurance required. Available for primary residences, second homes, and investment properties. VA Energy Efficiency - Energy efficiency improvements up to $6,000 - The resulting increase in loan payments will normally be offset by a reduction in utility costs. VA Vendee Financing VA REO Property Only VA has re-opened Vendee Financing to purchasers of Vendee eligible VA REO Properties. Vendee financing is a loan product offered to veterans and non-veterans to help finance the purchase of VA REO Properties. Some of the Guidelines are Listed Below Seller may contribute up to six percent of the contract sales price to pay for funding fee, closing cost, prepaid and other expenses Vendee mortgages are assumable by qualification Vendee financing requires a 620 credit score Available terms of 15, 20, 25 and 30 year fix rate Interest rates are determined by the VA Mortgage insurance is not required Tax service fee, appraisal fee, flood certification or prepayment penalty are not required Owner Occupied Purchase Amount financed with as little as 0% down The loan amount may be increased up to 2% to finance closing costs, pre-paids or other expenses The funding fee may not be financed Non-owner Occupied Purchaser (Investor) Amount financed as little as 5% down

3 Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment Investors must have experience managing rental properties to include anticipated rent on subject property in underwriting No maximum number of investment properties VA Loan Limits VA does not impose a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan; however loan limits establish the maximum possible guaranty on a loan. The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2012 VA limit. A veteran with full entitlement available may borrow up to the limit shown below and VA will guarantee 25 percent of the loan amount. If a veteran has previously used entitlement that has not been restored, the maximum guaranty amount available to that veteran is reduced accordingly. Most states the VA loan limit is $417,000. VA loan limits in some counties in the following states, i.e. AK, CA, CO, DC, CT, GU, HI, ID, MA, MD, NJ, NY, PA, UT, VA and VI will range from $419,750 to $625,500. Down Payment Assistance, Gift and Grant Programs Home prices have dropped, and mortgage rates are low. For anyone with the tens of thousands of dollars now required for a down payment, it's a pretty good time to buy a house. Now, it's even getting easier without that hefty down payment, as governments step in to help out. A growing number of state and local governments are now offering what are called "down payment assistance programs," grants or low- and no-interest loans to firsttime buyers or those who haven't owned a house in a few years. The number of programs, now somewhere around 1,000 nationally, has increased 3% to 5% in the last six months alone. Sellers are not allowed to give homebuyers down payment funds. That's where down payment assistance, gift and grant programs step in. Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to achieve homeownership. By using down payment assistance, a seller can market a home to a much larger group of prospective buyers. Millions of people want to buy homes, have the income and credit to qualify for loans, but do not have the funds necessary for the down payment and closing costs. Down payment assistance bridges this gap. Property Standards HQS Inspection A Housing Quality Standard Inspection (HQS) must be performed on all eligible properties and are property standards that have been approved by the U.S. Department of Housing and Urban Development to insure that all properties are decent, safe, and sanitary. The Lender is responsible for contacting the HQS Inspector The HQS Inspection is ordered in advance of an appraisal The HQS Inspection report and fully executed sales contract must be provided to the FHA or VA appraiser prior to inspecting the property.

4 Property Repairs and Final Inspection Repairs noted on the appraisal and HQS inspection deficiencies must be corrected. Inspection room by room. Interior - walls, ceilings, floors, doors, windows, electrical outlets, stove, refrigerator, sinks, showers, tubs, toilets, smoke detectors, stairs etc. Utilities - plumbing, heating, AC, electrical, water supply, water heater, must be in working order at time of inspection. Exterior - lead paint on homes built prior to 1978, steps and handrails, patio, porches, roof, gutters, sewer, septic tank, well, chimney. Other - electrical hazards, site and neighborhood conditions. The Approved Lender Will Be Responsible For Approving all contractors, their work plans and cost estimate Establishing a repair escrow account that is held at closing Monitoring repairs and payment of contractors Timeline to complete repairs will vary from lender to lender. I.e days after closing. FHA 203(k) Streamline allows 6 months to complete repairs Obtaining reports to document compliance with any down payment program Funds are released upon completion and final inspection Property Value Two appraisals may be required and must meet the fair market appraisal guidelines REO sellers order an appraisal prior to listing the property Negotiate in your offer for the property to qualify for the down payment assistance program Order a fair market value BPO or appraisal prior to submitting an offer Appraisal for loan processing will be ordered by the lender Value must be greater than or equal to the loan amount Verify the work plans and cost estimates for a buy and repair program is reasonable and accurate Georgia Dream Homeownership Program HOME (4663) The Georgia Dream Homeownership Program makes it possible for eligible homebuyers to own their own home with affordable first mortgage financing and down payment assistance. The Department of Community Affairs offers qualified homebuyers statewide who meet certain guidelines. In addition, homebuyers must have modest assets and meet the flexible credit underwriting criteria for the loan program they have selected. It is easy to qualify. Georgia Dream Loans are available to: First-time homebuyers If you purchase a home in one of the targeted census tract areas, the first time homebuyer rule does not apply Those who have not owned a home in the past three years Those who purchase a home in targeted areas

5 Those who have household incomes below the maximum referenced below Those who have liquid assets no more than $20,000 or 20% of the sales price (whichever is greater) Those who meet mortgage loan credit requirements The Georgia Dream Loan is a 30 year, fixed interest rate mortgage. Local lenders give credit approval for FHA, USDA-RD, VA or conventional uninsured mortgage loans. Not all lenders are approved to offer the Georgia Dream Loan. To locate an approved lender, visit the website below: If you purchase a home in the Atlanta Metropolitan Statistical area your total household income, based on the number of people living in the home can be no more than: One to two persons $71,000 Three or more persons $82,000 The sales price of the home cannot exceed $250,000 Area coverage includes: Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Newton, Paulding, Pickens, Pike, Rockdale, Spalding or Walton County If you purchase a home in a county not listed above, your total household income, based on the number of people living in the home can be no more than: One to two persons $61,000 Three or more persons $70,000 The sales price of the home cannot exceed $200,000 An Applicant is not considered to have had a prior ownership interest in a single family residence if: The Applicant did not hold title to the home but did receive the benefits of the mortgage interest deduction through the filing of a joint federal income tax return with a spouse The Applicant did not hold title to the home, but did receive all or a portion of the proceeds of the sale of the residence The Applicant continued to hold title following a divorce which granted property to other spouse, but the Applicant has not used the property as a principal residence in the last three (3) years The residence is or was a manufactured home whose structure is not permanently affixed to a permanent foundation in accordance with local codes and taxed as personal property (subject to ad valorem taxes). If the manufactured home was or is taxed as real property, then the Applicant is considered to be a prior homeowner Applicants may own vacant land or a manufactured home taxed as personal property at the time they close on their Loan Co-Signers are Allowed Under the Following Guidelines Co-signers cannot take title to the property or live in the property securing our Loan. (Co-signers who live in the mortgaged property are considered co-applicants.) Co-signers must sign the Note. Co-signers may not sign the Security Deed or DCA forms nor may they hold title to the property.

6 The co-signers' income is not included in the Household Annual Income but may be used as qualifying income Co-signers credit and ratios must meet the underwriting requirements Annual Household Income Household Annual Income is defined as all amounts, which go to, or are provided on behalf of, the Applicant(s) or spouse (even if temporarily absent), or any household member who will occupy the subject property within the 12-month period immediately following loan closing. Household Annual Income is determined by ascertaining the income received from each source over the most recent representative period and projecting those amounts over a one (1) year period. Household members Include The Applicant, co-applicant, spouse (unless it can be shown that a spouse resides elsewhere), parents, and children who live with the applicant and co-applicant at least six (6) months of each year Any related or un-related person who will reside in the mortgaged property during the 12-month period immediately following closing, regardless of previous address Any person who has resided with the Applicant and/or co-applicant prior to closing and whose financial affairs are combined with the Applicant s and/or the co-applicant s according to the documents in the Underwriting Package. If such person will not occupy the mortgaged property, his or her income can be excluded from Household Annual Income only if the Underwriting Package contains an explanation from the Applicant(s) as to the person s future residence plans Household members does not include: foster children; live-in aides and children of live-in aides; unborn children; and children being pursued for legal custody or adoption who are not currently living with the household Non-Applicant adults (18 years of age or older) who are also full time high school or college students must provide evidence of enrollment from the high school or college at the time of application Eligible Properties - Georgia Dream Homeownership Program Loans must be secured by property which: Is located in the state of Georgia The title is held by the mortgagor at the time of closing as fee simple or under an eligible leasehold interest (the terms of the ground lease must extend beyond the maturity date of the Loan and only the land may be under a ground lease; the improvements must be owned by the mortgagor) Is a one (1) unit single family dwelling (attached or detached) designed for residential use, condominiums or planned unit developments approved by Fannie Mae, Freddie Mac or the Mortgage Insurer, townhomes and modular homes that are located in an area consistent with such use and intended for owner occupancy Is eligible for insurance through the Mortgage Insurer Other Requirements If the home is served by a well as its water source, DCA requires that a local or county health inspector test and certify to the safety and adequacy o the water source. Report must be dated within 30 days prior to closing. If the home is served by a septic tank, a test by a licensed plumbing contractor or local government health or building inspector will be required. Clear termite letters are required

7 Lenders must provide a copy of clear plumbing, electrical, and heating certifications if the appraiser indicated that the property was vacant and/or the systems were not operational at the time of the appraisal inspection Down Payment Assistance for Georgia Dram First Mortgage Loan Buyers who qualify for the Georgia Dream First Mortgage also qualify for down payment assistance. The buyer must: Use the loan in conjunction with a Georgia Dream First Mortgage Loan Complete a Homebuyer Education class and provide a certificate of completion Contribute a minimum of $1,000 to the purchase transaction Down Payment Loan Options STANDARD All eligible homebuyers qualify for $5,000 PEN (Protectors, Educators, Nurses), includes all employees of state licensed health care facilities Homebuyers who are employed in qualified public protection, military, health care or education qualify for $7,500 CHOICE (Consumer Home Ownership and Independence Choices for Everyone) Homebuyers whose household includes an individual living with a disability qualify for $7,500. Co-Op Homebuyers who are employed by local governments in participating Co-Op communities qualify for $7,500 Single Family Development Homebuyers who are purchasing homes in this special DCA Development qualify for up to $20,000 Down payment funds are provided as a Second Mortgage Loan for the purpose of principal reduction and the payment of pre-paid items and closing cost. Additional loan description: No monthly payments No interest Loan must be repaid when the home is sold or refinanced or no longer used as the buyer s person residence Resources Personalized Flyers - Homebuyer Education Agencies -

8 UDSA - United States Department of Agriculture Rural Development Rural Development Loan Assistance UDSA loans are government insured mortgages that are offered to purchase a home in rural areas with no down payment and low monthly mortgage insurance. Program assistance is provided in many ways, including direct or guaranteed loans, grants, technical assistance, research and educational materials. Currently, there are two kinds of USDA rural development loans available for single family households: USDA Guaranteed Rural Housing Loans USDA Guaranteed Loans are the most common type of USDA rural development loan and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate. USDA Direct Rural Housing Loans USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain home ownership. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Families must be without adequate housing, but be able to afford the mortgage payments including taxes and insurance, which are typically 24 percent of an applicant s income. However, payment subsidy is available to applicants to enhance repayment ability. Loans are for up to 33 years and the term for manufactured homes is 30 years. Other UDSA Loan Factors Owner occupied purchase At least a 620 FICO credit score Standard debt-to-income ratios are 29/41 - Housing ratio is 29% of your gross monthly income and 41% of your gross monthly income for total debt There are income limitations Maximum loan amount will be 102% of the appraised value of the home (100% plus the 2% USDA loan guarantee fee) USDA loans allow for the closing cost to be included in the loan amount (appraisal permitting) A bankruptcy Chapter 7 must have been discharged for three years or more A Chapter 13 When all court approved payments have been made on time as agreed for at least one year Rural Repair and Rehabilitation Loans and Grants - The Very Low-Income Housing Repair program provides loans and grants to very low-income homeowners to repair, improve, or modernize their dwellings or to remove health and safety hazards.

9 Eligibility - To obtain a loan, homeowner-occupants must be unable to obtain affordable credit elsewhere and must have very low incomes, defined as below 50 percent of the area median income. They must need to make repairs and improvements to make the dwelling more safe and sanitary or to remove health and safety hazards. Grants are only available to homeowners who are 62 years old or older and cannot repay a Section 504 loan. Mutual Self-Help Loans - The Section 502 Mutual Self-Help Housing Loan program is used primarily to help very low- and low-income households construct their own homes. The program is targeted to families who are unable to buy clean, safe housing through conventional methods. Families participating in a mutual self-help project perform approximately 65 percent of the construction labor on each other's homes under qualified supervision. The savings from the reduction in labor costs allows otherwise ineligible families to own their homes. If families cannot meet their mortgage payments during the construction phase, the funds for these payments can be included in the loan. Resources Property Eligibility Site - Income Eligibility Site - come@11 Various Conditions to Down Payment Assistance Georgia has many down payment assistance programs. Nothing is standard in qualifying and loan processing. Keep in mind: Funds are available on a first come, first serve basis May require the buyer to be a first time homebuyer, meaning that they have not owned a home within the last three years You may or may not be able to add and layer other programs together Not all lenders participate in down payment assistance programs Only certain areas of the state may qualify, i.e. rural areas Each city and county has their own programs limited to specific areas Purchase price limitation Income limitations - Entire household income Credit score limitations May require more than one appraisal Reserve requirements and or limits after closing The down payment assistance usually is provided in the form of a second lien placed against the qualifying property for a set period of time May require a home buying housing certificate Lender underwriting and down payment program sponsor underwriting Takes longer to close the transaction - Allow 60 day closings

10 Fair Housing Discrimination Complaints Fair Housing Law Housing discrimination based on your race, color, national origin, religion, sex, family status, or disability is illegal by federal law. If you have been trying to buy or rent a home or apartment and you believe your rights have been violated, you can file a fair housing complaint. The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members. What Is Prohibited In the Sale and Rental of Housing? No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap: Refuse to rent or sell housing Refuse to negotiate for housing Make housing unavailable Deny a dwelling Set different terms, conditions or privileges for sale or rental of a dwelling. Provide different housing services or facilities Falsely deny that housing is available for inspection, sale, or rental For profit, persuade owners to sell or rent (blockbusting) Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing In Addition: It is illegal for anyone to: Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act In Mortgage Lending No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability): Refuse to make a mortgage loan Refuse to provide information regarding loans Impose different terms or conditions on a loan, such as different interest rates, points, or fees Discriminate in appraising property Refuse to purchase a loan

11 Set different terms or conditions for purchasing a loan Fair Housing Penalties Civil penalties of up to $10,000 for the first offense, up to $25,000 for the second offense within a five-year period, and up to $50,000 for the third offense within a seven-year period Monetary fines for actual and/or punitive damages caused by the discrimination An injunction to stop the sale or rental of the property to someone else, making it available to the complainant Court costs Criminal penalties against those who coerce, intimidate, threaten, or interfere with a person s buying, renting, or selling of housing State penalties, including the loss of the real estate license Fraud is a reality. Get informed. Be prepared. Mortgage fraud schemes employ some type of material misstatement, misrepresentation, or omission relating to the property or potential borrower which is relied on by an underwriter or lender to fund, purchase, or insure a loan. These misstatements, misrepresentations, or omissions are indicative of mortgage fraud and include the following: Inflated Appraisals Fictitious/Stolen Identities Nominee/Straw Buyers False Loan Application Fraudulent Supporting Loan Documentation Kickbacks Although there are many different types of schemes, mortgage fraud can be summarized as a form of bank robbery where the bank is not even aware it has been robbed until months or years later. One benchmark illustrating this point is the Financial Crimes Enforcement Network s Mortgage Loan Fraud Update, which reveals an 88% uptick in U.S. mortgage fraud cases in the second quarter of 2011 from the same period a year ago. Report Mortgage Fraud, Mortgage Scams and Predatory Lending The Federal Bureau of Investigation (FBI) (202) National FBI Financial Institution Fraud Unit The Federal Trade Commission (FTC) and and To file complaint (877) Identity Theft Clearinghouse (877) Consumer Response Center To report fraud or register a complaint about a national bank, contact Office of the Comptroller of the Currency (OCC) Comptroller of the Currency (800)

12 To report fraud or register a complaint about a federal savings and loan association, contact: Office of Thrift Supervision (OTS) Consumer Affairs consumer.complaint@ots.treas.gov (202) (800) for consumer complaints National Credit Union Association (NCUA) Phone: (512) State Chartered Credit Unions The National Association of Attorneys General Phone: (202) National Fraud Information Center The National Fraud Information Center is a project of the National Consumers League. It focuses mainly on fraud against the elderly, and internet and telemarketing fraud all sources of mortgage fraud and mortgage scams. Center for Responsible Lending (919) U.S. Dept. of Housing and Urban Development (HUD) Office of Consumer and Regulatory Affairs Director, Interstate land Sales/RESPA Division (202) National Hotline: (800) Equifax For Fraud Alerts: P.O. Box Atlanta, GA (800) Experian For Fraud Alerts: P.O. Box 9530 Allen TX Phone: (888) Trans Union For Fraud Alerts: Phone: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634

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14 Free Money Financing Your Dream Home in Today's Market Though the current economic climate presents some challenges, the time to buy a home is now. Interest rates are low, money is available and sellers are willing to roll out the red carpet to entice a buyer to buy their home. Tips for Homebuyers All homebuyers must convince the lender that they deserve financing today and will keep up their end of the deal in making all their future payments on time. All mortgage loans today are full qualifying. We have more stringent lending practices then every before. Keep in mind when you are applying for a mortgage loan, an approval is based on the level of risk of the borrower and property. If you are a high risk buyer or business owner you aren t going to get an approval. If you lower your risk by being in compliance with the lending markets, having a good credit profile, a good personal credit score, good trade references, money in the bank you improve your chances of an approval. If you don t have all of those things to lower your risk, don t wait. Start now to improve your standing as a low risk borrower so as the credit markets loosen, and they will in due time, you are ready to take advantage of the programs that will be made available. If the property condition is poor, it will not qualify for financing. However, financing is available to purchase the home in its current condition, finance the repairs into the loan and have the repairs completed after closing. Lending Options for Repairs Researching your MLS for appropriate properties for you buyer, keep in mind today, not to max out their buying power in the front end. Leave room for the buyer to select a home that needs some TLC and be able to finance into their loan amount for limited repairs and upgrades, i.e. the buyer qualifies for $150,000 purchase, show home that are below $140,000 leaving room to finance $10,000 for home revisions. For every $1,000 the buyer adds to their loan amount, it only changes their monthly payment around $4.00. FHA 203(b) - Escrow holdbacks are used to facilitate loan closings for properties that require no more than $5000 of repairs to meet FHA s minimum property requirements. Purchaser(s) are permitted to include in their mortgage an amount equal to 110% of the estimated cost of the repairs. All repairs are to be completed by the purchaser within 90 days of closing.

15 FHA 203(k) Streamline - The Streamline (K) program permits homebuyers to finance up to $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. The buyer's lender will order an after repaired appraisal as through the work has been completed and allow 6 months to complete the project. The FHA 203K is available for a one-to-four unit property. FHA Energy Efficient - Under the FHA EEM Program, a borrower can finance into the mortgage 100 percent of the cost of eligible energy efficient improvements, subject to certain dollar limitations, without an appraisal of the energy improvements and without further credit qualification of the borrower. The total cost of the improvements (including maintenance costs) must be less than the total present value of the energy saved over the useful life of the improvements. The cost of any improvement to the property that will increase the property's energy efficiency and that is determined to be "cost effective" is eligible for financing into the mortgage and its cost may be added to the mortgage amount up to the greater of 5 percent of the property's value (not to exceed $8000) or $4000. Fannie Mae HomePath Renovation - Allows a buyer to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation - up to 35% of the as completed value, no more than $35,000. Down payment (at least 3 percent) can be funded by the buyer s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer and renovation amount is based on an appraisal as completed value. No mortgage insurance required. Available for primary residences, second homes, and investment properties. VA Energy Efficiency - Energy efficiency improvements up to $6,000 - The resulting increase in loan payments will normally be offset by a reduction in utility costs. VA Vendee Financing VA REO Property Only VA has re-opened Vendee Financing to purchasers of Vendee eligible VA REO Properties. Vendee financing is a loan product offered to veterans and non-veterans to help finance the purchase of VA REO Properties. Some of the Guidelines are Listed Below Seller may contribute up to six percent of the contract sales price to pay for funding fee, closing cost, prepaid and other expenses Vendee mortgages are assumable by qualification Vendee financing requires a 620 credit score Available terms of 15, 20, 25 and 30 year fix rate Interest rates are determined by the VA Mortgage insurance is not required Tax service fee, appraisal fee, flood certification or prepayment penalty are not required Owner Occupied Purchase Amount financed with as little as 0% down The loan amount may be increased up to 2% to finance closing costs, pre-paids or other expenses The funding fee may not be financed Non-owner Occupied Purchaser (Investor) Amount financed as little as 5% down

16 Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment Investors must have experience managing rental properties to include anticipated rent on subject property in underwriting No maximum number of investment properties VA Loan Limits VA does not impose a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan; however loan limits establish the maximum possible guaranty on a loan. The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2012 VA limit. A veteran with full entitlement available may borrow up to the limit shown below and VA will guarantee 25 percent of the loan amount. If a veteran has previously used entitlement that has not been restored, the maximum guaranty amount available to that veteran is reduced accordingly. Most states the VA loan limit is $417,000. VA loan limits in some counties in the following states, i.e. AK, CA, CO, DC, CT, GU, HI, ID, MA, MD, NJ, NY, PA, UT, VA and VI will range from $419,750 to $625,500. Down Payment Assistance, Gift and Grant Programs Home prices have dropped, and mortgage rates are low. For anyone with the tens of thousands of dollars now required for a down payment, it's a pretty good time to buy a house. Now, it's even getting easier without that hefty down payment, as governments step in to help out. A growing number of state and local governments are now offering what are called "down payment assistance programs," grants or low- and no-interest loans to firsttime buyers or those who haven't owned a house in a few years. The number of programs, now somewhere around 1,000 nationally, has increased 3% to 5% in the last six months alone. Sellers are not allowed to give homebuyers down payment funds. That's where down payment assistance, gift and grant programs step in. Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to achieve homeownership. By using down payment assistance, a seller can market a home to a much larger group of prospective buyers. Millions of people want to buy homes, have the income and credit to qualify for loans, but do not have the funds necessary for the down payment and closing costs. Down payment assistance bridges this gap. Property Standards HQS Inspection A Housing Quality Standard Inspection (HQS) must be performed on all eligible properties and are property standards that have been approved by the U.S. Department of Housing and Urban Development to insure that all properties are decent, safe, and sanitary. The Lender is responsible for contacting the HQS Inspector The HQS Inspection is ordered in advance of an appraisal The HQS Inspection report and fully executed sales contract must be provided to the FHA or VA appraiser prior to inspecting the property.

17 Property Repairs and Final Inspection Repairs noted on the appraisal and HQS inspection deficiencies must be corrected. Inspection room by room. Interior - walls, ceilings, floors, doors, windows, electrical outlets, stove, refrigerator, sinks, showers, tubs, toilets, smoke detectors, stairs etc. Utilities - plumbing, heating, AC, electrical, water supply, water heater, must be in working order at time of inspection. Exterior - lead paint on homes built prior to 1978, steps and handrails, patio, porches, roof, gutters, sewer, septic tank, well, chimney. Other - electrical hazards, site and neighborhood conditions. The Approved Lender Will Be Responsible For Approving all contractors, their work plans and cost estimate Establishing a repair escrow account that is held at closing Monitoring repairs and payment of contractors Timeline to complete repairs will vary from lender to lender. I.e days after closing. FHA 203(k) Streamline allows 6 months to complete repairs Obtaining reports to document compliance with any down payment program Funds are released upon completion and final inspection Property Value Two appraisals may be required and must meet the fair market appraisal guidelines REO sellers order an appraisal prior to listing the property Negotiate in your offer for the property to qualify for the down payment assistance program Order a fair market value BPO or appraisal prior to submitting an offer Appraisal for loan processing will be ordered by the lender Value must be greater than or equal to the loan amount Verify the work plans and cost estimates for a buy and repair program is reasonable and accurate Georgia Dream Homeownership Program HOME (4663) The Georgia Dream Homeownership Program makes it possible for eligible homebuyers to own their own home with affordable first mortgage financing and down payment assistance. The Department of Community Affairs offers qualified homebuyers statewide who meet certain guidelines. In addition, homebuyers must have modest assets and meet the flexible credit underwriting criteria for the loan program they have selected. It is easy to qualify. Georgia Dream Loans are available to: First-time homebuyers If you purchase a home in one of the targeted census tract areas, the first time homebuyer rule does not apply Those who have not owned a home in the past three years Those who purchase a home in targeted areas

18 Those who have household incomes below the maximum referenced below Those who have liquid assets no more than $20,000 or 20% of the sales price (whichever is greater) Those who meet mortgage loan credit requirements The Georgia Dream Loan is a 30 year, fixed interest rate mortgage. Local lenders give credit approval for FHA, USDA-RD, VA or conventional uninsured mortgage loans. Not all lenders are approved to offer the Georgia Dream Loan. To locate an approved lender, visit the website below: If you purchase a home in the Atlanta Metropolitan Statistical area your total household income, based on the number of people living in the home can be no more than: One to two persons $71,000 Three or more persons $82,000 The sales price of the home cannot exceed $250,000 Area coverage includes: Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Newton, Paulding, Pickens, Pike, Rockdale, Spalding or Walton County If you purchase a home in a county not listed above, your total household income, based on the number of people living in the home can be no more than: One to two persons $61,000 Three or more persons $70,000 The sales price of the home cannot exceed $200,000 An Applicant is not considered to have had a prior ownership interest in a single family residence if: The Applicant did not hold title to the home but did receive the benefits of the mortgage interest deduction through the filing of a joint federal income tax return with a spouse The Applicant did not hold title to the home, but did receive all or a portion of the proceeds of the sale of the residence The Applicant continued to hold title following a divorce which granted property to other spouse, but the Applicant has not used the property as a principal residence in the last three (3) years The residence is or was a manufactured home whose structure is not permanently affixed to a permanent foundation in accordance with local codes and taxed as personal property (subject to ad valorem taxes). If the manufactured home was or is taxed as real property, then the Applicant is considered to be a prior homeowner Applicants may own vacant land or a manufactured home taxed as personal property at the time they close on their Loan Co-Signers are Allowed Under the Following Guidelines Co-signers cannot take title to the property or live in the property securing our Loan. (Co-signers who live in the mortgaged property are considered co-applicants.) Co-signers must sign the Note. Co-signers may not sign the Security Deed or DCA forms nor may they hold title to the property.

19 The co-signers' income is not included in the Household Annual Income but may be used as qualifying income Co-signers credit and ratios must meet the underwriting requirements Annual Household Income Household Annual Income is defined as all amounts, which go to, or are provided on behalf of, the Applicant(s) or spouse (even if temporarily absent), or any household member who will occupy the subject property within the 12-month period immediately following loan closing. Household Annual Income is determined by ascertaining the income received from each source over the most recent representative period and projecting those amounts over a one (1) year period. Household members Include The Applicant, co-applicant, spouse (unless it can be shown that a spouse resides elsewhere), parents, and children who live with the applicant and co-applicant at least six (6) months of each year Any related or un-related person who will reside in the mortgaged property during the 12-month period immediately following closing, regardless of previous address Any person who has resided with the Applicant and/or co-applicant prior to closing and whose financial affairs are combined with the Applicant s and/or the co-applicant s according to the documents in the Underwriting Package. If such person will not occupy the mortgaged property, his or her income can be excluded from Household Annual Income only if the Underwriting Package contains an explanation from the Applicant(s) as to the person s future residence plans Household members does not include: foster children; live-in aides and children of live-in aides; unborn children; and children being pursued for legal custody or adoption who are not currently living with the household Non-Applicant adults (18 years of age or older) who are also full time high school or college students must provide evidence of enrollment from the high school or college at the time of application Eligible Properties - Georgia Dream Homeownership Program Loans must be secured by property which: Is located in the state of Georgia The title is held by the mortgagor at the time of closing as fee simple or under an eligible leasehold interest (the terms of the ground lease must extend beyond the maturity date of the Loan and only the land may be under a ground lease; the improvements must be owned by the mortgagor) Is a one (1) unit single family dwelling (attached or detached) designed for residential use, condominiums or planned unit developments approved by Fannie Mae, Freddie Mac or the Mortgage Insurer, townhomes and modular homes that are located in an area consistent with such use and intended for owner occupancy Is eligible for insurance through the Mortgage Insurer Other Requirements If the home is served by a well as its water source, DCA requires that a local or county health inspector test and certify to the safety and adequacy o the water source. Report must be dated within 30 days prior to closing. If the home is served by a septic tank, a test by a licensed plumbing contractor or local government health or building inspector will be required. Clear termite letters are required

20 Lenders must provide a copy of clear plumbing, electrical, and heating certifications if the appraiser indicated that the property was vacant and/or the systems were not operational at the time of the appraisal inspection Down Payment Assistance for Georgia Dram First Mortgage Loan Buyers who qualify for the Georgia Dream First Mortgage also qualify for down payment assistance. The buyer must: Use the loan in conjunction with a Georgia Dream First Mortgage Loan Complete a Homebuyer Education class and provide a certificate of completion Contribute a minimum of $1,000 to the purchase transaction Down Payment Loan Options STANDARD All eligible homebuyers qualify for $5,000 PEN (Protectors, Educators, Nurses), includes all employees of state licensed health care facilities Homebuyers who are employed in qualified public protection, military, health care or education qualify for $7,500 CHOICE (Consumer Home Ownership and Independence Choices for Everyone) Homebuyers whose household includes an individual living with a disability qualify for $7,500. Co-Op Homebuyers who are employed by local governments in participating Co-Op communities qualify for $7,500 Single Family Development Homebuyers who are purchasing homes in this special DCA Development qualify for up to $20,000 Down payment funds are provided as a Second Mortgage Loan for the purpose of principal reduction and the payment of pre-paid items and closing cost. Additional loan description: No monthly payments No interest Loan must be repaid when the home is sold or refinanced or no longer used as the buyer s person residence Resources Personalized Flyers - Homebuyer Education Agencies -

21 UDSA - United States Department of Agriculture Rural Development Rural Development Loan Assistance UDSA loans are government insured mortgages that are offered to purchase a home in rural areas with no down payment and low monthly mortgage insurance. Program assistance is provided in many ways, including direct or guaranteed loans, grants, technical assistance, research and educational materials. Currently, there are two kinds of USDA rural development loans available for single family households: USDA Guaranteed Rural Housing Loans USDA Guaranteed Loans are the most common type of USDA rural development loan and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate. USDA Direct Rural Housing Loans USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain home ownership. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Families must be without adequate housing, but be able to afford the mortgage payments including taxes and insurance, which are typically 24 percent of an applicant s income. However, payment subsidy is available to applicants to enhance repayment ability. Loans are for up to 33 years and the term for manufactured homes is 30 years. Other UDSA Loan Factors Owner occupied purchase At least a 620 FICO credit score Standard debt-to-income ratios are 29/41 - Housing ratio is 29% of your gross monthly income and 41% of your gross monthly income for total debt There are income limitations Maximum loan amount will be 102% of the appraised value of the home (100% plus the 2% USDA loan guarantee fee) USDA loans allow for the closing cost to be included in the loan amount (appraisal permitting) A bankruptcy Chapter 7 must have been discharged for three years or more A Chapter 13 When all court approved payments have been made on time as agreed for at least one year Rural Repair and Rehabilitation Loans and Grants - The Very Low-Income Housing Repair program provides loans and grants to very low-income homeowners to repair, improve, or modernize their dwellings or to remove health and safety hazards.

22 Eligibility - To obtain a loan, homeowner-occupants must be unable to obtain affordable credit elsewhere and must have very low incomes, defined as below 50 percent of the area median income. They must need to make repairs and improvements to make the dwelling more safe and sanitary or to remove health and safety hazards. Grants are only available to homeowners who are 62 years old or older and cannot repay a Section 504 loan. Mutual Self-Help Loans - The Section 502 Mutual Self-Help Housing Loan program is used primarily to help very low- and low-income households construct their own homes. The program is targeted to families who are unable to buy clean, safe housing through conventional methods. Families participating in a mutual self-help project perform approximately 65 percent of the construction labor on each other's homes under qualified supervision. The savings from the reduction in labor costs allows otherwise ineligible families to own their homes. If families cannot meet their mortgage payments during the construction phase, the funds for these payments can be included in the loan. Resources Property Eligibility Site - Income Eligibility Site - come@11 Various Conditions to Down Payment Assistance Georgia has many down payment assistance programs. Nothing is standard in qualifying and loan processing. Keep in mind: Funds are available on a first come, first serve basis May require the buyer to be a first time homebuyer, meaning that they have not owned a home within the last three years You may or may not be able to add and layer other programs together Not all lenders participate in down payment assistance programs Only certain areas of the state may qualify, i.e. rural areas Each city and county has their own programs limited to specific areas Purchase price limitation Income limitations - Entire household income Credit score limitations May require more than one appraisal Reserve requirements and or limits after closing The down payment assistance usually is provided in the form of a second lien placed against the qualifying property for a set period of time May require a home buying housing certificate Lender underwriting and down payment program sponsor underwriting Takes longer to close the transaction - Allow 60 day closings

23 Fair Housing Discrimination Complaints Fair Housing Law Housing discrimination based on your race, color, national origin, religion, sex, family status, or disability is illegal by federal law. If you have been trying to buy or rent a home or apartment and you believe your rights have been violated, you can file a fair housing complaint. The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members. What Is Prohibited In the Sale and Rental of Housing? No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap: Refuse to rent or sell housing Refuse to negotiate for housing Make housing unavailable Deny a dwelling Set different terms, conditions or privileges for sale or rental of a dwelling. Provide different housing services or facilities Falsely deny that housing is available for inspection, sale, or rental For profit, persuade owners to sell or rent (blockbusting) Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing In Addition: It is illegal for anyone to: Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act In Mortgage Lending No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability): Refuse to make a mortgage loan Refuse to provide information regarding loans Impose different terms or conditions on a loan, such as different interest rates, points, or fees Discriminate in appraising property Refuse to purchase a loan

24 Set different terms or conditions for purchasing a loan Fair Housing Penalties Civil penalties of up to $10,000 for the first offense, up to $25,000 for the second offense within a five-year period, and up to $50,000 for the third offense within a seven-year period Monetary fines for actual and/or punitive damages caused by the discrimination An injunction to stop the sale or rental of the property to someone else, making it available to the complainant Court costs Criminal penalties against those who coerce, intimidate, threaten, or interfere with a person s buying, renting, or selling of housing State penalties, including the loss of the real estate license Fraud is a reality. Get informed. Be prepared. Mortgage fraud schemes employ some type of material misstatement, misrepresentation, or omission relating to the property or potential borrower which is relied on by an underwriter or lender to fund, purchase, or insure a loan. These misstatements, misrepresentations, or omissions are indicative of mortgage fraud and include the following: Inflated Appraisals Fictitious/Stolen Identities Nominee/Straw Buyers False Loan Application Fraudulent Supporting Loan Documentation Kickbacks Although there are many different types of schemes, mortgage fraud can be summarized as a form of bank robbery where the bank is not even aware it has been robbed until months or years later. One benchmark illustrating this point is the Financial Crimes Enforcement Network s Mortgage Loan Fraud Update, which reveals an 88% uptick in U.S. mortgage fraud cases in the second quarter of 2011 from the same period a year ago. Report Mortgage Fraud, Mortgage Scams and Predatory Lending The Federal Bureau of Investigation (FBI) (202) National FBI Financial Institution Fraud Unit The Federal Trade Commission (FTC) and and To file complaint (877) Identity Theft Clearinghouse (877) Consumer Response Center To report fraud or register a complaint about a national bank, contact Office of the Comptroller of the Currency (OCC) Comptroller of the Currency (800)

25 To report fraud or register a complaint about a federal savings and loan association, contact: Office of Thrift Supervision (OTS) Consumer Affairs consumer.complaint@ots.treas.gov (202) (800) for consumer complaints National Credit Union Association (NCUA) Phone: (512) State Chartered Credit Unions The National Association of Attorneys General Phone: (202) National Fraud Information Center The National Fraud Information Center is a project of the National Consumers League. It focuses mainly on fraud against the elderly, and internet and telemarketing fraud all sources of mortgage fraud and mortgage scams. Center for Responsible Lending (919) U.S. Dept. of Housing and Urban Development (HUD) Office of Consumer and Regulatory Affairs Director, Interstate land Sales/RESPA Division (202) National Hotline: (800) Equifax For Fraud Alerts: P.O. Box Atlanta, GA (800) Experian For Fraud Alerts: P.O. Box 9530 Allen TX Phone: (888) Trans Union For Fraud Alerts: Phone: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634

26 Sponsor Today: Cathy McDaniel American Real Estate University Cell

27 Free Money Financing Your Dream Home in Today's Market Though the current economic climate presents some challenges, the time to buy a home is now. Interest rates are low, money is available and sellers are willing to roll out the red carpet to entice a buyer to buy their home. Tips for Homebuyers All homebuyers must convince the lender that they deserve financing today and will keep up their end of the deal in making all their future payments on time. All mortgage loans today are full qualifying. We have more stringent lending practices then every before. Keep in mind when you are applying for a mortgage loan, an approval is based on the level of risk of the borrower and property. If you are a high risk buyer or business owner you aren t going to get an approval. If you lower your risk by being in compliance with the lending markets, having a good credit profile, a good personal credit score, good trade references, money in the bank you improve your chances of an approval. If you don t have all of those things to lower your risk, don t wait. Start now to improve your standing as a low risk borrower so as the credit markets loosen, and they will in due time, you are ready to take advantage of the programs that will be made available. If the property condition is poor, it will not qualify for financing. However, financing is available to purchase the home in its current condition, finance the repairs into the loan and have the repairs completed after closing. Lending Options for Repairs Researching your MLS for appropriate properties for you buyer, keep in mind today, not to max out their buying power in the front end. Leave room for the buyer to select a home that needs some TLC and be able to finance into their loan amount for limited repairs and upgrades, i.e. the buyer qualifies for $150,000 purchase, show home that are below $140,000 leaving room to finance $10,000 for home revisions. For every $1,000 the buyer adds to their loan amount, it only changes their monthly payment around $4.00. FHA 203(b) - Escrow holdbacks are used to facilitate loan closings for properties that require no more than $5000 of repairs to meet FHA s minimum property requirements. Purchaser(s) are permitted to include in their mortgage an amount equal to 110% of the estimated cost of the repairs. All repairs are to be completed by the purchaser within 90 days of closing.

28 FHA 203(k) Streamline - The Streamline (K) program permits homebuyers to finance up to $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. The buyer's lender will order an after repaired appraisal as through the work has been completed and allow 6 months to complete the project. The FHA 203K is available for a one-to-four unit property. FHA Energy Efficient - Under the FHA EEM Program, a borrower can finance into the mortgage 100 percent of the cost of eligible energy efficient improvements, subject to certain dollar limitations, without an appraisal of the energy improvements and without further credit qualification of the borrower. The total cost of the improvements (including maintenance costs) must be less than the total present value of the energy saved over the useful life of the improvements. The cost of any improvement to the property that will increase the property's energy efficiency and that is determined to be "cost effective" is eligible for financing into the mortgage and its cost may be added to the mortgage amount up to the greater of 5 percent of the property's value (not to exceed $8000) or $4000. Fannie Mae HomePath Renovation - Allows a buyer to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation - up to 35% of the as completed value, no more than $35,000. Down payment (at least 3 percent) can be funded by the buyer s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer and renovation amount is based on an appraisal as completed value. No mortgage insurance required. Available for primary residences, second homes, and investment properties. VA Energy Efficiency - Energy efficiency improvements up to $6,000 - The resulting increase in loan payments will normally be offset by a reduction in utility costs. VA Vendee Financing VA REO Property Only VA has re-opened Vendee Financing to purchasers of Vendee eligible VA REO Properties. Vendee financing is a loan product offered to veterans and non-veterans to help finance the purchase of VA REO Properties. Some of the Guidelines are Listed Below Seller may contribute up to six percent of the contract sales price to pay for funding fee, closing cost, prepaid and other expenses Vendee mortgages are assumable by qualification Vendee financing requires a 620 credit score Available terms of 15, 20, 25 and 30 year fix rate Interest rates are determined by the VA Mortgage insurance is not required Tax service fee, appraisal fee, flood certification or prepayment penalty are not required Owner Occupied Purchase Amount financed with as little as 0% down The loan amount may be increased up to 2% to finance closing costs, pre-paids or other expenses The funding fee may not be financed Non-owner Occupied Purchaser (Investor) Amount financed as little as 5% down

29 Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment Investors must have experience managing rental properties to include anticipated rent on subject property in underwriting No maximum number of investment properties VA Loan Limits VA does not impose a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan; however loan limits establish the maximum possible guaranty on a loan. The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2012 VA limit. A veteran with full entitlement available may borrow up to the limit shown below and VA will guarantee 25 percent of the loan amount. If a veteran has previously used entitlement that has not been restored, the maximum guaranty amount available to that veteran is reduced accordingly. Most states the VA loan limit is $417,000. VA loan limits in some counties in the following states, i.e. AK, CA, CO, DC, CT, GU, HI, ID, MA, MD, NJ, NY, PA, UT, VA and VI will range from $419,750 to $625,500. Down Payment Assistance, Gift and Grant Programs Home prices have dropped, and mortgage rates are low. For anyone with the tens of thousands of dollars now required for a down payment, it's a pretty good time to buy a house. Now, it's even getting easier without that hefty down payment, as governments step in to help out. A growing number of state and local governments are now offering what are called "down payment assistance programs," grants or low- and no-interest loans to firsttime buyers or those who haven't owned a house in a few years. The number of programs, now somewhere around 1,000 nationally, has increased 3% to 5% in the last six months alone. Sellers are not allowed to give homebuyers down payment funds. That's where down payment assistance, gift and grant programs step in. Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to achieve homeownership. By using down payment assistance, a seller can market a home to a much larger group of prospective buyers. Millions of people want to buy homes, have the income and credit to qualify for loans, but do not have the funds necessary for the down payment and closing costs. Down payment assistance bridges this gap. Property Standards HQS Inspection A Housing Quality Standard Inspection (HQS) must be performed on all eligible properties and are property standards that have been approved by the U.S. Department of Housing and Urban Development to insure that all properties are decent, safe, and sanitary. The Lender is responsible for contacting the HQS Inspector The HQS Inspection is ordered in advance of an appraisal The HQS Inspection report and fully executed sales contract must be provided to the FHA or VA appraiser prior to inspecting the property.

30 Property Repairs and Final Inspection Repairs noted on the appraisal and HQS inspection deficiencies must be corrected. Inspection room by room. Interior - walls, ceilings, floors, doors, windows, electrical outlets, stove, refrigerator, sinks, showers, tubs, toilets, smoke detectors, stairs etc. Utilities - plumbing, heating, AC, electrical, water supply, water heater, must be in working order at time of inspection. Exterior - lead paint on homes built prior to 1978, steps and handrails, patio, porches, roof, gutters, sewer, septic tank, well, chimney. Other - electrical hazards, site and neighborhood conditions. The Approved Lender Will Be Responsible For Approving all contractors, their work plans and cost estimate Establishing a repair escrow account that is held at closing Monitoring repairs and payment of contractors Timeline to complete repairs will vary from lender to lender. I.e days after closing. FHA 203(k) Streamline allows 6 months to complete repairs Obtaining reports to document compliance with any down payment program Funds are released upon completion and final inspection Property Value Two appraisals may be required and must meet the fair market appraisal guidelines REO sellers order an appraisal prior to listing the property Negotiate in your offer for the property to qualify for the down payment assistance program Order a fair market value BPO or appraisal prior to submitting an offer Appraisal for loan processing will be ordered by the lender Value must be greater than or equal to the loan amount Verify the work plans and cost estimates for a buy and repair program is reasonable and accurate Georgia Dream Homeownership Program HOME (4663) The Georgia Dream Homeownership Program makes it possible for eligible homebuyers to own their own home with affordable first mortgage financing and down payment assistance. The Department of Community Affairs offers qualified homebuyers statewide who meet certain guidelines. In addition, homebuyers must have modest assets and meet the flexible credit underwriting criteria for the loan program they have selected. It is easy to qualify. Georgia Dream Loans are available to: First-time homebuyers If you purchase a home in one of the targeted census tract areas, the first time homebuyer rule does not apply Those who have not owned a home in the past three years Those who purchase a home in targeted areas

31 Those who have household incomes below the maximum referenced below Those who have liquid assets no more than $20,000 or 20% of the sales price (whichever is greater) Those who meet mortgage loan credit requirements The Georgia Dream Loan is a 30 year, fixed interest rate mortgage. Local lenders give credit approval for FHA, USDA-RD, VA or conventional uninsured mortgage loans. Not all lenders are approved to offer the Georgia Dream Loan. To locate an approved lender, visit the website below: If you purchase a home in the Atlanta Metropolitan Statistical area your total household income, based on the number of people living in the home can be no more than: One to two persons $71,000 Three or more persons $82,000 The sales price of the home cannot exceed $250,000 Area coverage includes: Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Newton, Paulding, Pickens, Pike, Rockdale, Spalding or Walton County If you purchase a home in a county not listed above, your total household income, based on the number of people living in the home can be no more than: One to two persons $61,000 Three or more persons $70,000 The sales price of the home cannot exceed $200,000 An Applicant is not considered to have had a prior ownership interest in a single family residence if: The Applicant did not hold title to the home but did receive the benefits of the mortgage interest deduction through the filing of a joint federal income tax return with a spouse The Applicant did not hold title to the home, but did receive all or a portion of the proceeds of the sale of the residence The Applicant continued to hold title following a divorce which granted property to other spouse, but the Applicant has not used the property as a principal residence in the last three (3) years The residence is or was a manufactured home whose structure is not permanently affixed to a permanent foundation in accordance with local codes and taxed as personal property (subject to ad valorem taxes). If the manufactured home was or is taxed as real property, then the Applicant is considered to be a prior homeowner Applicants may own vacant land or a manufactured home taxed as personal property at the time they close on their Loan Co-Signers are Allowed Under the Following Guidelines Co-signers cannot take title to the property or live in the property securing our Loan. (Co-signers who live in the mortgaged property are considered co-applicants.) Co-signers must sign the Note. Co-signers may not sign the Security Deed or DCA forms nor may they hold title to the property.

32 The co-signers' income is not included in the Household Annual Income but may be used as qualifying income Co-signers credit and ratios must meet the underwriting requirements Annual Household Income Household Annual Income is defined as all amounts, which go to, or are provided on behalf of, the Applicant(s) or spouse (even if temporarily absent), or any household member who will occupy the subject property within the 12-month period immediately following loan closing. Household Annual Income is determined by ascertaining the income received from each source over the most recent representative period and projecting those amounts over a one (1) year period. Household members Include The Applicant, co-applicant, spouse (unless it can be shown that a spouse resides elsewhere), parents, and children who live with the applicant and co-applicant at least six (6) months of each year Any related or un-related person who will reside in the mortgaged property during the 12-month period immediately following closing, regardless of previous address Any person who has resided with the Applicant and/or co-applicant prior to closing and whose financial affairs are combined with the Applicant s and/or the co-applicant s according to the documents in the Underwriting Package. If such person will not occupy the mortgaged property, his or her income can be excluded from Household Annual Income only if the Underwriting Package contains an explanation from the Applicant(s) as to the person s future residence plans Household members does not include: foster children; live-in aides and children of live-in aides; unborn children; and children being pursued for legal custody or adoption who are not currently living with the household Non-Applicant adults (18 years of age or older) who are also full time high school or college students must provide evidence of enrollment from the high school or college at the time of application Eligible Properties - Georgia Dream Homeownership Program Loans must be secured by property which: Is located in the state of Georgia The title is held by the mortgagor at the time of closing as fee simple or under an eligible leasehold interest (the terms of the ground lease must extend beyond the maturity date of the Loan and only the land may be under a ground lease; the improvements must be owned by the mortgagor) Is a one (1) unit single family dwelling (attached or detached) designed for residential use, condominiums or planned unit developments approved by Fannie Mae, Freddie Mac or the Mortgage Insurer, townhomes and modular homes that are located in an area consistent with such use and intended for owner occupancy Is eligible for insurance through the Mortgage Insurer Other Requirements If the home is served by a well as its water source, DCA requires that a local or county health inspector test and certify to the safety and adequacy o the water source. Report must be dated within 30 days prior to closing. If the home is served by a septic tank, a test by a licensed plumbing contractor or local government health or building inspector will be required. Clear termite letters are required

33 Lenders must provide a copy of clear plumbing, electrical, and heating certifications if the appraiser indicated that the property was vacant and/or the systems were not operational at the time of the appraisal inspection Down Payment Assistance for Georgia Dram First Mortgage Loan Buyers who qualify for the Georgia Dream First Mortgage also qualify for down payment assistance. The buyer must: Use the loan in conjunction with a Georgia Dream First Mortgage Loan Complete a Homebuyer Education class and provide a certificate of completion Contribute a minimum of $1,000 to the purchase transaction Down Payment Loan Options STANDARD All eligible homebuyers qualify for $5,000 PEN (Protectors, Educators, Nurses), includes all employees of state licensed health care facilities Homebuyers who are employed in qualified public protection, military, health care or education qualify for $7,500 CHOICE (Consumer Home Ownership and Independence Choices for Everyone) Homebuyers whose household includes an individual living with a disability qualify for $7,500. Co-Op Homebuyers who are employed by local governments in participating Co-Op communities qualify for $7,500 Single Family Development Homebuyers who are purchasing homes in this special DCA Development qualify for up to $20,000 Down payment funds are provided as a Second Mortgage Loan for the purpose of principal reduction and the payment of pre-paid items and closing cost. Additional loan description: No monthly payments No interest Loan must be repaid when the home is sold or refinanced or no longer used as the buyer s person residence Resources Personalized Flyers - Homebuyer Education Agencies -

34 UDSA - United States Department of Agriculture Rural Development Rural Development Loan Assistance UDSA loans are government insured mortgages that are offered to purchase a home in rural areas with no down payment and low monthly mortgage insurance. Program assistance is provided in many ways, including direct or guaranteed loans, grants, technical assistance, research and educational materials. Currently, there are two kinds of USDA rural development loans available for single family households: USDA Guaranteed Rural Housing Loans USDA Guaranteed Loans are the most common type of USDA rural development loan and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate. USDA Direct Rural Housing Loans USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain home ownership. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Families must be without adequate housing, but be able to afford the mortgage payments including taxes and insurance, which are typically 24 percent of an applicant s income. However, payment subsidy is available to applicants to enhance repayment ability. Loans are for up to 33 years and the term for manufactured homes is 30 years. Other UDSA Loan Factors Owner occupied purchase At least a 620 FICO credit score Standard debt-to-income ratios are 29/41 - Housing ratio is 29% of your gross monthly income and 41% of your gross monthly income for total debt There are income limitations Maximum loan amount will be 102% of the appraised value of the home (100% plus the 2% USDA loan guarantee fee) USDA loans allow for the closing cost to be included in the loan amount (appraisal permitting) A bankruptcy Chapter 7 must have been discharged for three years or more A Chapter 13 When all court approved payments have been made on time as agreed for at least one year Rural Repair and Rehabilitation Loans and Grants - The Very Low-Income Housing Repair program provides loans and grants to very low-income homeowners to repair, improve, or modernize their dwellings or to remove health and safety hazards.

35 Eligibility - To obtain a loan, homeowner-occupants must be unable to obtain affordable credit elsewhere and must have very low incomes, defined as below 50 percent of the area median income. They must need to make repairs and improvements to make the dwelling more safe and sanitary or to remove health and safety hazards. Grants are only available to homeowners who are 62 years old or older and cannot repay a Section 504 loan. Mutual Self-Help Loans - The Section 502 Mutual Self-Help Housing Loan program is used primarily to help very low- and low-income households construct their own homes. The program is targeted to families who are unable to buy clean, safe housing through conventional methods. Families participating in a mutual self-help project perform approximately 65 percent of the construction labor on each other's homes under qualified supervision. The savings from the reduction in labor costs allows otherwise ineligible families to own their homes. If families cannot meet their mortgage payments during the construction phase, the funds for these payments can be included in the loan. Resources Property Eligibility Site - Income Eligibility Site - come@11 Various Conditions to Down Payment Assistance Georgia has many down payment assistance programs. Nothing is standard in qualifying and loan processing. Keep in mind: Funds are available on a first come, first serve basis May require the buyer to be a first time homebuyer, meaning that they have not owned a home within the last three years You may or may not be able to add and layer other programs together Not all lenders participate in down payment assistance programs Only certain areas of the state may qualify, i.e. rural areas Each city and county has their own programs limited to specific areas Purchase price limitation Income limitations - Entire household income Credit score limitations May require more than one appraisal Reserve requirements and or limits after closing The down payment assistance usually is provided in the form of a second lien placed against the qualifying property for a set period of time May require a home buying housing certificate Lender underwriting and down payment program sponsor underwriting Takes longer to close the transaction - Allow 60 day closings

36 Fair Housing Discrimination Complaints Fair Housing Law Housing discrimination based on your race, color, national origin, religion, sex, family status, or disability is illegal by federal law. If you have been trying to buy or rent a home or apartment and you believe your rights have been violated, you can file a fair housing complaint. The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members. What Is Prohibited In the Sale and Rental of Housing? No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap: Refuse to rent or sell housing Refuse to negotiate for housing Make housing unavailable Deny a dwelling Set different terms, conditions or privileges for sale or rental of a dwelling. Provide different housing services or facilities Falsely deny that housing is available for inspection, sale, or rental For profit, persuade owners to sell or rent (blockbusting) Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing In Addition: It is illegal for anyone to: Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act In Mortgage Lending No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability): Refuse to make a mortgage loan Refuse to provide information regarding loans Impose different terms or conditions on a loan, such as different interest rates, points, or fees Discriminate in appraising property Refuse to purchase a loan

37 Set different terms or conditions for purchasing a loan Fair Housing Penalties Civil penalties of up to $10,000 for the first offense, up to $25,000 for the second offense within a five-year period, and up to $50,000 for the third offense within a seven-year period Monetary fines for actual and/or punitive damages caused by the discrimination An injunction to stop the sale or rental of the property to someone else, making it available to the complainant Court costs Criminal penalties against those who coerce, intimidate, threaten, or interfere with a person s buying, renting, or selling of housing State penalties, including the loss of the real estate license Fraud is a reality. Get informed. Be prepared. Mortgage fraud schemes employ some type of material misstatement, misrepresentation, or omission relating to the property or potential borrower which is relied on by an underwriter or lender to fund, purchase, or insure a loan. These misstatements, misrepresentations, or omissions are indicative of mortgage fraud and include the following: Inflated Appraisals Fictitious/Stolen Identities Nominee/Straw Buyers False Loan Application Fraudulent Supporting Loan Documentation Kickbacks Although there are many different types of schemes, mortgage fraud can be summarized as a form of bank robbery where the bank is not even aware it has been robbed until months or years later. One benchmark illustrating this point is the Financial Crimes Enforcement Network s Mortgage Loan Fraud Update, which reveals an 88% uptick in U.S. mortgage fraud cases in the second quarter of 2011 from the same period a year ago. Report Mortgage Fraud, Mortgage Scams and Predatory Lending The Federal Bureau of Investigation (FBI) (202) National FBI Financial Institution Fraud Unit The Federal Trade Commission (FTC) and and To file complaint (877) Identity Theft Clearinghouse (877) Consumer Response Center To report fraud or register a complaint about a national bank, contact Office of the Comptroller of the Currency (OCC) Comptroller of the Currency (800)

38 To report fraud or register a complaint about a federal savings and loan association, contact: Office of Thrift Supervision (OTS) Consumer Affairs consumer.complaint@ots.treas.gov (202) (800) for consumer complaints National Credit Union Association (NCUA) Phone: (512) State Chartered Credit Unions The National Association of Attorneys General Phone: (202) National Fraud Information Center The National Fraud Information Center is a project of the National Consumers League. It focuses mainly on fraud against the elderly, and internet and telemarketing fraud all sources of mortgage fraud and mortgage scams. Center for Responsible Lending (919) U.S. Dept. of Housing and Urban Development (HUD) Office of Consumer and Regulatory Affairs Director, Interstate land Sales/RESPA Division (202) National Hotline: (800) Equifax For Fraud Alerts: P.O. Box Atlanta, GA (800) Experian For Fraud Alerts: P.O. Box 9530 Allen TX Phone: (888) Trans Union For Fraud Alerts: Phone: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634

39 Sponsor Today: Cathy McDaniel American Real Estate University Cell

40 Free Money Financing Your Dream Home in Today's Market Though the current economic climate presents some challenges, the time to buy a home is now. Interest rates are low, money is available and sellers are willing to roll out the red carpet to entice a buyer to buy their home. Tips for Homebuyers All homebuyers must convince the lender that they deserve financing today and will keep up their end of the deal in making all their future payments on time. All mortgage loans today are full qualifying. We have more stringent lending practices then every before. Keep in mind when you are applying for a mortgage loan, an approval is based on the level of risk of the borrower and property. If you are a high risk buyer or business owner you aren t going to get an approval. If you lower your risk by being in compliance with the lending markets, having a good credit profile, a good personal credit score, good trade references, money in the bank you improve your chances of an approval. If you don t have all of those things to lower your risk, don t wait. Start now to improve your standing as a low risk borrower so as the credit markets loosen, and they will in due time, you are ready to take advantage of the programs that will be made available. If the property condition is poor, it will not qualify for financing. However, financing is available to purchase the home in its current condition, finance the repairs into the loan and have the repairs completed after closing. Lending Options for Repairs Researching your MLS for appropriate properties for you buyer, keep in mind today, not to max out their buying power in the front end. Leave room for the buyer to select a home that needs some TLC and be able to finance into their loan amount for limited repairs and upgrades, i.e. the buyer qualifies for $150,000 purchase, show home that are below $140,000 leaving room to finance $10,000 for home revisions. For every $1,000 the buyer adds to their loan amount, it only changes their monthly payment around $4.00. FHA 203(b) - Escrow holdbacks are used to facilitate loan closings for properties that require no more than $5000 of repairs to meet FHA s minimum property requirements. Purchaser(s) are permitted to include in their mortgage an amount equal to 110% of the estimated cost of the repairs. All repairs are to be completed by the purchaser within 90 days of closing.

41 FHA 203(k) Streamline - The Streamline (K) program permits homebuyers to finance up to $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. The buyer's lender will order an after repaired appraisal as through the work has been completed and allow 6 months to complete the project. The FHA 203K is available for a one-to-four unit property. FHA Energy Efficient - Under the FHA EEM Program, a borrower can finance into the mortgage 100 percent of the cost of eligible energy efficient improvements, subject to certain dollar limitations, without an appraisal of the energy improvements and without further credit qualification of the borrower. The total cost of the improvements (including maintenance costs) must be less than the total present value of the energy saved over the useful life of the improvements. The cost of any improvement to the property that will increase the property's energy efficiency and that is determined to be "cost effective" is eligible for financing into the mortgage and its cost may be added to the mortgage amount up to the greater of 5 percent of the property's value (not to exceed $8000) or $4000. Fannie Mae HomePath Renovation - Allows a buyer to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation - up to 35% of the as completed value, no more than $35,000. Down payment (at least 3 percent) can be funded by the buyer s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer and renovation amount is based on an appraisal as completed value. No mortgage insurance required. Available for primary residences, second homes, and investment properties. VA Energy Efficiency - Energy efficiency improvements up to $6,000 - The resulting increase in loan payments will normally be offset by a reduction in utility costs. VA Vendee Financing VA REO Property Only VA has re-opened Vendee Financing to purchasers of Vendee eligible VA REO Properties. Vendee financing is a loan product offered to veterans and non-veterans to help finance the purchase of VA REO Properties. Some of the Guidelines are Listed Below Seller may contribute up to six percent of the contract sales price to pay for funding fee, closing cost, prepaid and other expenses Vendee mortgages are assumable by qualification Vendee financing requires a 620 credit score Available terms of 15, 20, 25 and 30 year fix rate Interest rates are determined by the VA Mortgage insurance is not required Tax service fee, appraisal fee, flood certification or prepayment penalty are not required Owner Occupied Purchase Amount financed with as little as 0% down The loan amount may be increased up to 2% to finance closing costs, pre-paids or other expenses The funding fee may not be financed Non-owner Occupied Purchaser (Investor) Amount financed as little as 5% down

42 Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment Investors must have experience managing rental properties to include anticipated rent on subject property in underwriting No maximum number of investment properties VA Loan Limits VA does not impose a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan; however loan limits establish the maximum possible guaranty on a loan. The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2012 VA limit. A veteran with full entitlement available may borrow up to the limit shown below and VA will guarantee 25 percent of the loan amount. If a veteran has previously used entitlement that has not been restored, the maximum guaranty amount available to that veteran is reduced accordingly. Most states the VA loan limit is $417,000. VA loan limits in some counties in the following states, i.e. AK, CA, CO, DC, CT, GU, HI, ID, MA, MD, NJ, NY, PA, UT, VA and VI will range from $419,750 to $625,500. Down Payment Assistance, Gift and Grant Programs Home prices have dropped, and mortgage rates are low. For anyone with the tens of thousands of dollars now required for a down payment, it's a pretty good time to buy a house. Now, it's even getting easier without that hefty down payment, as governments step in to help out. A growing number of state and local governments are now offering what are called "down payment assistance programs," grants or low- and no-interest loans to firsttime buyers or those who haven't owned a house in a few years. The number of programs, now somewhere around 1,000 nationally, has increased 3% to 5% in the last six months alone. Sellers are not allowed to give homebuyers down payment funds. That's where down payment assistance, gift and grant programs step in. Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to achieve homeownership. By using down payment assistance, a seller can market a home to a much larger group of prospective buyers. Millions of people want to buy homes, have the income and credit to qualify for loans, but do not have the funds necessary for the down payment and closing costs. Down payment assistance bridges this gap. Property Standards HQS Inspection A Housing Quality Standard Inspection (HQS) must be performed on all eligible properties and are property standards that have been approved by the U.S. Department of Housing and Urban Development to insure that all properties are decent, safe, and sanitary. The Lender is responsible for contacting the HQS Inspector The HQS Inspection is ordered in advance of an appraisal The HQS Inspection report and fully executed sales contract must be provided to the FHA or VA appraiser prior to inspecting the property.

43 Property Repairs and Final Inspection Repairs noted on the appraisal and HQS inspection deficiencies must be corrected. Inspection room by room. Interior - walls, ceilings, floors, doors, windows, electrical outlets, stove, refrigerator, sinks, showers, tubs, toilets, smoke detectors, stairs etc. Utilities - plumbing, heating, AC, electrical, water supply, water heater, must be in working order at time of inspection. Exterior - lead paint on homes built prior to 1978, steps and handrails, patio, porches, roof, gutters, sewer, septic tank, well, chimney. Other - electrical hazards, site and neighborhood conditions. The Approved Lender Will Be Responsible For Approving all contractors, their work plans and cost estimate Establishing a repair escrow account that is held at closing Monitoring repairs and payment of contractors Timeline to complete repairs will vary from lender to lender. I.e days after closing. FHA 203(k) Streamline allows 6 months to complete repairs Obtaining reports to document compliance with any down payment program Funds are released upon completion and final inspection Property Value Two appraisals may be required and must meet the fair market appraisal guidelines REO sellers order an appraisal prior to listing the property Negotiate in your offer for the property to qualify for the down payment assistance program Order a fair market value BPO or appraisal prior to submitting an offer Appraisal for loan processing will be ordered by the lender Value must be greater than or equal to the loan amount Verify the work plans and cost estimates for a buy and repair program is reasonable and accurate Georgia Dream Homeownership Program HOME (4663) The Georgia Dream Homeownership Program makes it possible for eligible homebuyers to own their own home with affordable first mortgage financing and down payment assistance. The Department of Community Affairs offers qualified homebuyers statewide who meet certain guidelines. In addition, homebuyers must have modest assets and meet the flexible credit underwriting criteria for the loan program they have selected. It is easy to qualify. Georgia Dream Loans are available to: First-time homebuyers If you purchase a home in one of the targeted census tract areas, the first time homebuyer rule does not apply Those who have not owned a home in the past three years Those who purchase a home in targeted areas

44 Those who have household incomes below the maximum referenced below Those who have liquid assets no more than $20,000 or 20% of the sales price (whichever is greater) Those who meet mortgage loan credit requirements The Georgia Dream Loan is a 30 year, fixed interest rate mortgage. Local lenders give credit approval for FHA, USDA-RD, VA or conventional uninsured mortgage loans. Not all lenders are approved to offer the Georgia Dream Loan. To locate an approved lender, visit the website below: If you purchase a home in the Atlanta Metropolitan Statistical area your total household income, based on the number of people living in the home can be no more than: One to two persons $71,000 Three or more persons $82,000 The sales price of the home cannot exceed $250,000 Area coverage includes: Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Newton, Paulding, Pickens, Pike, Rockdale, Spalding or Walton County If you purchase a home in a county not listed above, your total household income, based on the number of people living in the home can be no more than: One to two persons $61,000 Three or more persons $70,000 The sales price of the home cannot exceed $200,000 An Applicant is not considered to have had a prior ownership interest in a single family residence if: The Applicant did not hold title to the home but did receive the benefits of the mortgage interest deduction through the filing of a joint federal income tax return with a spouse The Applicant did not hold title to the home, but did receive all or a portion of the proceeds of the sale of the residence The Applicant continued to hold title following a divorce which granted property to other spouse, but the Applicant has not used the property as a principal residence in the last three (3) years The residence is or was a manufactured home whose structure is not permanently affixed to a permanent foundation in accordance with local codes and taxed as personal property (subject to ad valorem taxes). If the manufactured home was or is taxed as real property, then the Applicant is considered to be a prior homeowner Applicants may own vacant land or a manufactured home taxed as personal property at the time they close on their Loan Co-Signers are Allowed Under the Following Guidelines Co-signers cannot take title to the property or live in the property securing our Loan. (Co-signers who live in the mortgaged property are considered co-applicants.) Co-signers must sign the Note. Co-signers may not sign the Security Deed or DCA forms nor may they hold title to the property.

45 The co-signers' income is not included in the Household Annual Income but may be used as qualifying income Co-signers credit and ratios must meet the underwriting requirements Annual Household Income Household Annual Income is defined as all amounts, which go to, or are provided on behalf of, the Applicant(s) or spouse (even if temporarily absent), or any household member who will occupy the subject property within the 12-month period immediately following loan closing. Household Annual Income is determined by ascertaining the income received from each source over the most recent representative period and projecting those amounts over a one (1) year period. Household members Include The Applicant, co-applicant, spouse (unless it can be shown that a spouse resides elsewhere), parents, and children who live with the applicant and co-applicant at least six (6) months of each year Any related or un-related person who will reside in the mortgaged property during the 12-month period immediately following closing, regardless of previous address Any person who has resided with the Applicant and/or co-applicant prior to closing and whose financial affairs are combined with the Applicant s and/or the co-applicant s according to the documents in the Underwriting Package. If such person will not occupy the mortgaged property, his or her income can be excluded from Household Annual Income only if the Underwriting Package contains an explanation from the Applicant(s) as to the person s future residence plans Household members does not include: foster children; live-in aides and children of live-in aides; unborn children; and children being pursued for legal custody or adoption who are not currently living with the household Non-Applicant adults (18 years of age or older) who are also full time high school or college students must provide evidence of enrollment from the high school or college at the time of application Eligible Properties - Georgia Dream Homeownership Program Loans must be secured by property which: Is located in the state of Georgia The title is held by the mortgagor at the time of closing as fee simple or under an eligible leasehold interest (the terms of the ground lease must extend beyond the maturity date of the Loan and only the land may be under a ground lease; the improvements must be owned by the mortgagor) Is a one (1) unit single family dwelling (attached or detached) designed for residential use, condominiums or planned unit developments approved by Fannie Mae, Freddie Mac or the Mortgage Insurer, townhomes and modular homes that are located in an area consistent with such use and intended for owner occupancy Is eligible for insurance through the Mortgage Insurer Other Requirements If the home is served by a well as its water source, DCA requires that a local or county health inspector test and certify to the safety and adequacy o the water source. Report must be dated within 30 days prior to closing. If the home is served by a septic tank, a test by a licensed plumbing contractor or local government health or building inspector will be required. Clear termite letters are required

46 Lenders must provide a copy of clear plumbing, electrical, and heating certifications if the appraiser indicated that the property was vacant and/or the systems were not operational at the time of the appraisal inspection Down Payment Assistance for Georgia Dram First Mortgage Loan Buyers who qualify for the Georgia Dream First Mortgage also qualify for down payment assistance. The buyer must: Use the loan in conjunction with a Georgia Dream First Mortgage Loan Complete a Homebuyer Education class and provide a certificate of completion Contribute a minimum of $1,000 to the purchase transaction Down Payment Loan Options STANDARD All eligible homebuyers qualify for $5,000 PEN (Protectors, Educators, Nurses), includes all employees of state licensed health care facilities Homebuyers who are employed in qualified public protection, military, health care or education qualify for $7,500 CHOICE (Consumer Home Ownership and Independence Choices for Everyone) Homebuyers whose household includes an individual living with a disability qualify for $7,500. Co-Op Homebuyers who are employed by local governments in participating Co-Op communities qualify for $7,500 Single Family Development Homebuyers who are purchasing homes in this special DCA Development qualify for up to $20,000 Down payment funds are provided as a Second Mortgage Loan for the purpose of principal reduction and the payment of pre-paid items and closing cost. Additional loan description: No monthly payments No interest Loan must be repaid when the home is sold or refinanced or no longer used as the buyer s person residence Resources Personalized Flyers - Homebuyer Education Agencies -

47 UDSA - United States Department of Agriculture Rural Development Rural Development Loan Assistance UDSA loans are government insured mortgages that are offered to purchase a home in rural areas with no down payment and low monthly mortgage insurance. Program assistance is provided in many ways, including direct or guaranteed loans, grants, technical assistance, research and educational materials. Currently, there are two kinds of USDA rural development loans available for single family households: USDA Guaranteed Rural Housing Loans USDA Guaranteed Loans are the most common type of USDA rural development loan and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate. USDA Direct Rural Housing Loans USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain home ownership. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Families must be without adequate housing, but be able to afford the mortgage payments including taxes and insurance, which are typically 24 percent of an applicant s income. However, payment subsidy is available to applicants to enhance repayment ability. Loans are for up to 33 years and the term for manufactured homes is 30 years. Other UDSA Loan Factors Owner occupied purchase At least a 620 FICO credit score Standard debt-to-income ratios are 29/41 - Housing ratio is 29% of your gross monthly income and 41% of your gross monthly income for total debt There are income limitations Maximum loan amount will be 102% of the appraised value of the home (100% plus the 2% USDA loan guarantee fee) USDA loans allow for the closing cost to be included in the loan amount (appraisal permitting) A bankruptcy Chapter 7 must have been discharged for three years or more A Chapter 13 When all court approved payments have been made on time as agreed for at least one year Rural Repair and Rehabilitation Loans and Grants - The Very Low-Income Housing Repair program provides loans and grants to very low-income homeowners to repair, improve, or modernize their dwellings or to remove health and safety hazards.

48 Eligibility - To obtain a loan, homeowner-occupants must be unable to obtain affordable credit elsewhere and must have very low incomes, defined as below 50 percent of the area median income. They must need to make repairs and improvements to make the dwelling more safe and sanitary or to remove health and safety hazards. Grants are only available to homeowners who are 62 years old or older and cannot repay a Section 504 loan. Mutual Self-Help Loans - The Section 502 Mutual Self-Help Housing Loan program is used primarily to help very low- and low-income households construct their own homes. The program is targeted to families who are unable to buy clean, safe housing through conventional methods. Families participating in a mutual self-help project perform approximately 65 percent of the construction labor on each other's homes under qualified supervision. The savings from the reduction in labor costs allows otherwise ineligible families to own their homes. If families cannot meet their mortgage payments during the construction phase, the funds for these payments can be included in the loan. Resources Property Eligibility Site - Income Eligibility Site - come@11 Various Conditions to Down Payment Assistance Georgia has many down payment assistance programs. Nothing is standard in qualifying and loan processing. Keep in mind: Funds are available on a first come, first serve basis May require the buyer to be a first time homebuyer, meaning that they have not owned a home within the last three years You may or may not be able to add and layer other programs together Not all lenders participate in down payment assistance programs Only certain areas of the state may qualify, i.e. rural areas Each city and county has their own programs limited to specific areas Purchase price limitation Income limitations - Entire household income Credit score limitations May require more than one appraisal Reserve requirements and or limits after closing The down payment assistance usually is provided in the form of a second lien placed against the qualifying property for a set period of time May require a home buying housing certificate Lender underwriting and down payment program sponsor underwriting Takes longer to close the transaction - Allow 60 day closings

49 Fair Housing Discrimination Complaints Fair Housing Law Housing discrimination based on your race, color, national origin, religion, sex, family status, or disability is illegal by federal law. If you have been trying to buy or rent a home or apartment and you believe your rights have been violated, you can file a fair housing complaint. The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members. What Is Prohibited In the Sale and Rental of Housing? No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap: Refuse to rent or sell housing Refuse to negotiate for housing Make housing unavailable Deny a dwelling Set different terms, conditions or privileges for sale or rental of a dwelling. Provide different housing services or facilities Falsely deny that housing is available for inspection, sale, or rental For profit, persuade owners to sell or rent (blockbusting) Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing In Addition: It is illegal for anyone to: Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act In Mortgage Lending No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability): Refuse to make a mortgage loan Refuse to provide information regarding loans Impose different terms or conditions on a loan, such as different interest rates, points, or fees Discriminate in appraising property Refuse to purchase a loan

50 Set different terms or conditions for purchasing a loan Fair Housing Penalties Civil penalties of up to $10,000 for the first offense, up to $25,000 for the second offense within a five-year period, and up to $50,000 for the third offense within a seven-year period Monetary fines for actual and/or punitive damages caused by the discrimination An injunction to stop the sale or rental of the property to someone else, making it available to the complainant Court costs Criminal penalties against those who coerce, intimidate, threaten, or interfere with a person s buying, renting, or selling of housing State penalties, including the loss of the real estate license Fraud is a reality. Get informed. Be prepared. Mortgage fraud schemes employ some type of material misstatement, misrepresentation, or omission relating to the property or potential borrower which is relied on by an underwriter or lender to fund, purchase, or insure a loan. These misstatements, misrepresentations, or omissions are indicative of mortgage fraud and include the following: Inflated Appraisals Fictitious/Stolen Identities Nominee/Straw Buyers False Loan Application Fraudulent Supporting Loan Documentation Kickbacks Although there are many different types of schemes, mortgage fraud can be summarized as a form of bank robbery where the bank is not even aware it has been robbed until months or years later. One benchmark illustrating this point is the Financial Crimes Enforcement Network s Mortgage Loan Fraud Update, which reveals an 88% uptick in U.S. mortgage fraud cases in the second quarter of 2011 from the same period a year ago. Report Mortgage Fraud, Mortgage Scams and Predatory Lending The Federal Bureau of Investigation (FBI) (202) National FBI Financial Institution Fraud Unit The Federal Trade Commission (FTC) and and To file complaint (877) Identity Theft Clearinghouse (877) Consumer Response Center To report fraud or register a complaint about a national bank, contact Office of the Comptroller of the Currency (OCC) Comptroller of the Currency (800)

51 To report fraud or register a complaint about a federal savings and loan association, contact: Office of Thrift Supervision (OTS) Consumer Affairs consumer.complaint@ots.treas.gov (202) (800) for consumer complaints National Credit Union Association (NCUA) Phone: (512) State Chartered Credit Unions The National Association of Attorneys General Phone: (202) National Fraud Information Center The National Fraud Information Center is a project of the National Consumers League. It focuses mainly on fraud against the elderly, and internet and telemarketing fraud all sources of mortgage fraud and mortgage scams. Center for Responsible Lending (919) U.S. Dept. of Housing and Urban Development (HUD) Office of Consumer and Regulatory Affairs Director, Interstate land Sales/RESPA Division (202) National Hotline: (800) Equifax For Fraud Alerts: P.O. Box Atlanta, GA (800) Experian For Fraud Alerts: P.O. Box 9530 Allen TX Phone: (888) Trans Union For Fraud Alerts: Phone: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634

52 Sponsor Today: Cathy McDaniel American Real Estate University Cell

53 Free Money Financing Your Dream Home in Today's Market Though the current economic climate presents some challenges, the time to buy a home is now. Interest rates are low, money is available and sellers are willing to roll out the red carpet to entice a buyer to buy their home. Tips for Homebuyers All homebuyers must convince the lender that they deserve financing today and will keep up their end of the deal in making all their future payments on time. All mortgage loans today are full qualifying. We have more stringent lending practices then every before. Keep in mind when you are applying for a mortgage loan, an approval is based on the level of risk of the borrower and property. If you are a high risk buyer or business owner you aren t going to get an approval. If you lower your risk by being in compliance with the lending markets, having a good credit profile, a good personal credit score, good trade references, money in the bank you improve your chances of an approval. If you don t have all of those things to lower your risk, don t wait. Start now to improve your standing as a low risk borrower so as the credit markets loosen, and they will in due time, you are ready to take advantage of the programs that will be made available. If the property condition is poor, it will not qualify for financing. However, financing is available to purchase the home in its current condition, finance the repairs into the loan and have the repairs completed after closing. Lending Options for Repairs Researching your MLS for appropriate properties for you buyer, keep in mind today, not to max out their buying power in the front end. Leave room for the buyer to select a home that needs some TLC and be able to finance into their loan amount for limited repairs and upgrades, i.e. the buyer qualifies for $150,000 purchase, show home that are below $140,000 leaving room to finance $10,000 for home revisions. For every $1,000 the buyer adds to their loan amount, it only changes their monthly payment around $4.00. FHA 203(b) - Escrow holdbacks are used to facilitate loan closings for properties that require no more than $5000 of repairs to meet FHA s minimum property requirements. Purchaser(s) are permitted to include in their mortgage an amount equal to 110% of the estimated cost of the repairs. All repairs are to be completed by the purchaser within 90 days of closing.

54 FHA 203(k) Streamline - The Streamline (K) program permits homebuyers to finance up to $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. The buyer's lender will order an after repaired appraisal as through the work has been completed and allow 6 months to complete the project. The FHA 203K is available for a one-to-four unit property. FHA Energy Efficient - Under the FHA EEM Program, a borrower can finance into the mortgage 100 percent of the cost of eligible energy efficient improvements, subject to certain dollar limitations, without an appraisal of the energy improvements and without further credit qualification of the borrower. The total cost of the improvements (including maintenance costs) must be less than the total present value of the energy saved over the useful life of the improvements. The cost of any improvement to the property that will increase the property's energy efficiency and that is determined to be "cost effective" is eligible for financing into the mortgage and its cost may be added to the mortgage amount up to the greater of 5 percent of the property's value (not to exceed $8000) or $4000. Fannie Mae HomePath Renovation - Allows a buyer to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation - up to 35% of the as completed value, no more than $35,000. Down payment (at least 3 percent) can be funded by the buyer s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer and renovation amount is based on an appraisal as completed value. No mortgage insurance required. Available for primary residences, second homes, and investment properties. VA Energy Efficiency - Energy efficiency improvements up to $6,000 - The resulting increase in loan payments will normally be offset by a reduction in utility costs. VA Vendee Financing VA REO Property Only VA has re-opened Vendee Financing to purchasers of Vendee eligible VA REO Properties. Vendee financing is a loan product offered to veterans and non-veterans to help finance the purchase of VA REO Properties. Some of the Guidelines are Listed Below Seller may contribute up to six percent of the contract sales price to pay for funding fee, closing cost, prepaid and other expenses Vendee mortgages are assumable by qualification Vendee financing requires a 620 credit score Available terms of 15, 20, 25 and 30 year fix rate Interest rates are determined by the VA Mortgage insurance is not required Tax service fee, appraisal fee, flood certification or prepayment penalty are not required Owner Occupied Purchase Amount financed with as little as 0% down The loan amount may be increased up to 2% to finance closing costs, pre-paids or other expenses The funding fee may not be financed Non-owner Occupied Purchaser (Investor) Amount financed as little as 5% down

55 Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment Investors must have experience managing rental properties to include anticipated rent on subject property in underwriting No maximum number of investment properties VA Loan Limits VA does not impose a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan; however loan limits establish the maximum possible guaranty on a loan. The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2012 VA limit. A veteran with full entitlement available may borrow up to the limit shown below and VA will guarantee 25 percent of the loan amount. If a veteran has previously used entitlement that has not been restored, the maximum guaranty amount available to that veteran is reduced accordingly. Most states the VA loan limit is $417,000. VA loan limits in some counties in the following states, i.e. AK, CA, CO, DC, CT, GU, HI, ID, MA, MD, NJ, NY, PA, UT, VA and VI will range from $419,750 to $625,500. Down Payment Assistance, Gift and Grant Programs Home prices have dropped, and mortgage rates are low. For anyone with the tens of thousands of dollars now required for a down payment, it's a pretty good time to buy a house. Now, it's even getting easier without that hefty down payment, as governments step in to help out. A growing number of state and local governments are now offering what are called "down payment assistance programs," grants or low- and no-interest loans to firsttime buyers or those who haven't owned a house in a few years. The number of programs, now somewhere around 1,000 nationally, has increased 3% to 5% in the last six months alone. Sellers are not allowed to give homebuyers down payment funds. That's where down payment assistance, gift and grant programs step in. Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to achieve homeownership. By using down payment assistance, a seller can market a home to a much larger group of prospective buyers. Millions of people want to buy homes, have the income and credit to qualify for loans, but do not have the funds necessary for the down payment and closing costs. Down payment assistance bridges this gap. Property Standards HQS Inspection A Housing Quality Standard Inspection (HQS) must be performed on all eligible properties and are property standards that have been approved by the U.S. Department of Housing and Urban Development to insure that all properties are decent, safe, and sanitary. The Lender is responsible for contacting the HQS Inspector The HQS Inspection is ordered in advance of an appraisal The HQS Inspection report and fully executed sales contract must be provided to the FHA or VA appraiser prior to inspecting the property.

56 Property Repairs and Final Inspection Repairs noted on the appraisal and HQS inspection deficiencies must be corrected. Inspection room by room. Interior - walls, ceilings, floors, doors, windows, electrical outlets, stove, refrigerator, sinks, showers, tubs, toilets, smoke detectors, stairs etc. Utilities - plumbing, heating, AC, electrical, water supply, water heater, must be in working order at time of inspection. Exterior - lead paint on homes built prior to 1978, steps and handrails, patio, porches, roof, gutters, sewer, septic tank, well, chimney. Other - electrical hazards, site and neighborhood conditions. The Approved Lender Will Be Responsible For Approving all contractors, their work plans and cost estimate Establishing a repair escrow account that is held at closing Monitoring repairs and payment of contractors Timeline to complete repairs will vary from lender to lender. I.e days after closing. FHA 203(k) Streamline allows 6 months to complete repairs Obtaining reports to document compliance with any down payment program Funds are released upon completion and final inspection Property Value Two appraisals may be required and must meet the fair market appraisal guidelines REO sellers order an appraisal prior to listing the property Negotiate in your offer for the property to qualify for the down payment assistance program Order a fair market value BPO or appraisal prior to submitting an offer Appraisal for loan processing will be ordered by the lender Value must be greater than or equal to the loan amount Verify the work plans and cost estimates for a buy and repair program is reasonable and accurate Georgia Dream Homeownership Program HOME (4663) The Georgia Dream Homeownership Program makes it possible for eligible homebuyers to own their own home with affordable first mortgage financing and down payment assistance. The Department of Community Affairs offers qualified homebuyers statewide who meet certain guidelines. In addition, homebuyers must have modest assets and meet the flexible credit underwriting criteria for the loan program they have selected. It is easy to qualify. Georgia Dream Loans are available to: First-time homebuyers If you purchase a home in one of the targeted census tract areas, the first time homebuyer rule does not apply Those who have not owned a home in the past three years Those who purchase a home in targeted areas

57 Those who have household incomes below the maximum referenced below Those who have liquid assets no more than $20,000 or 20% of the sales price (whichever is greater) Those who meet mortgage loan credit requirements The Georgia Dream Loan is a 30 year, fixed interest rate mortgage. Local lenders give credit approval for FHA, USDA-RD, VA or conventional uninsured mortgage loans. Not all lenders are approved to offer the Georgia Dream Loan. To locate an approved lender, visit the website below: If you purchase a home in the Atlanta Metropolitan Statistical area your total household income, based on the number of people living in the home can be no more than: One to two persons $71,000 Three or more persons $82,000 The sales price of the home cannot exceed $250,000 Area coverage includes: Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Newton, Paulding, Pickens, Pike, Rockdale, Spalding or Walton County If you purchase a home in a county not listed above, your total household income, based on the number of people living in the home can be no more than: One to two persons $61,000 Three or more persons $70,000 The sales price of the home cannot exceed $200,000 An Applicant is not considered to have had a prior ownership interest in a single family residence if: The Applicant did not hold title to the home but did receive the benefits of the mortgage interest deduction through the filing of a joint federal income tax return with a spouse The Applicant did not hold title to the home, but did receive all or a portion of the proceeds of the sale of the residence The Applicant continued to hold title following a divorce which granted property to other spouse, but the Applicant has not used the property as a principal residence in the last three (3) years The residence is or was a manufactured home whose structure is not permanently affixed to a permanent foundation in accordance with local codes and taxed as personal property (subject to ad valorem taxes). If the manufactured home was or is taxed as real property, then the Applicant is considered to be a prior homeowner Applicants may own vacant land or a manufactured home taxed as personal property at the time they close on their Loan Co-Signers are Allowed Under the Following Guidelines Co-signers cannot take title to the property or live in the property securing our Loan. (Co-signers who live in the mortgaged property are considered co-applicants.) Co-signers must sign the Note. Co-signers may not sign the Security Deed or DCA forms nor may they hold title to the property.

58 The co-signers' income is not included in the Household Annual Income but may be used as qualifying income Co-signers credit and ratios must meet the underwriting requirements Annual Household Income Household Annual Income is defined as all amounts, which go to, or are provided on behalf of, the Applicant(s) or spouse (even if temporarily absent), or any household member who will occupy the subject property within the 12-month period immediately following loan closing. Household Annual Income is determined by ascertaining the income received from each source over the most recent representative period and projecting those amounts over a one (1) year period. Household members Include The Applicant, co-applicant, spouse (unless it can be shown that a spouse resides elsewhere), parents, and children who live with the applicant and co-applicant at least six (6) months of each year Any related or un-related person who will reside in the mortgaged property during the 12-month period immediately following closing, regardless of previous address Any person who has resided with the Applicant and/or co-applicant prior to closing and whose financial affairs are combined with the Applicant s and/or the co-applicant s according to the documents in the Underwriting Package. If such person will not occupy the mortgaged property, his or her income can be excluded from Household Annual Income only if the Underwriting Package contains an explanation from the Applicant(s) as to the person s future residence plans Household members does not include: foster children; live-in aides and children of live-in aides; unborn children; and children being pursued for legal custody or adoption who are not currently living with the household Non-Applicant adults (18 years of age or older) who are also full time high school or college students must provide evidence of enrollment from the high school or college at the time of application Eligible Properties - Georgia Dream Homeownership Program Loans must be secured by property which: Is located in the state of Georgia The title is held by the mortgagor at the time of closing as fee simple or under an eligible leasehold interest (the terms of the ground lease must extend beyond the maturity date of the Loan and only the land may be under a ground lease; the improvements must be owned by the mortgagor) Is a one (1) unit single family dwelling (attached or detached) designed for residential use, condominiums or planned unit developments approved by Fannie Mae, Freddie Mac or the Mortgage Insurer, townhomes and modular homes that are located in an area consistent with such use and intended for owner occupancy Is eligible for insurance through the Mortgage Insurer Other Requirements If the home is served by a well as its water source, DCA requires that a local or county health inspector test and certify to the safety and adequacy o the water source. Report must be dated within 30 days prior to closing. If the home is served by a septic tank, a test by a licensed plumbing contractor or local government health or building inspector will be required. Clear termite letters are required

59 Lenders must provide a copy of clear plumbing, electrical, and heating certifications if the appraiser indicated that the property was vacant and/or the systems were not operational at the time of the appraisal inspection Down Payment Assistance for Georgia Dram First Mortgage Loan Buyers who qualify for the Georgia Dream First Mortgage also qualify for down payment assistance. The buyer must: Use the loan in conjunction with a Georgia Dream First Mortgage Loan Complete a Homebuyer Education class and provide a certificate of completion Contribute a minimum of $1,000 to the purchase transaction Down Payment Loan Options STANDARD All eligible homebuyers qualify for $5,000 PEN (Protectors, Educators, Nurses), includes all employees of state licensed health care facilities Homebuyers who are employed in qualified public protection, military, health care or education qualify for $7,500 CHOICE (Consumer Home Ownership and Independence Choices for Everyone) Homebuyers whose household includes an individual living with a disability qualify for $7,500. Co-Op Homebuyers who are employed by local governments in participating Co-Op communities qualify for $7,500 Single Family Development Homebuyers who are purchasing homes in this special DCA Development qualify for up to $20,000 Down payment funds are provided as a Second Mortgage Loan for the purpose of principal reduction and the payment of pre-paid items and closing cost. Additional loan description: No monthly payments No interest Loan must be repaid when the home is sold or refinanced or no longer used as the buyer s person residence Resources Personalized Flyers - Homebuyer Education Agencies -

60 UDSA - United States Department of Agriculture Rural Development Rural Development Loan Assistance UDSA loans are government insured mortgages that are offered to purchase a home in rural areas with no down payment and low monthly mortgage insurance. Program assistance is provided in many ways, including direct or guaranteed loans, grants, technical assistance, research and educational materials. Currently, there are two kinds of USDA rural development loans available for single family households: USDA Guaranteed Rural Housing Loans USDA Guaranteed Loans are the most common type of USDA rural development loan and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate. USDA Direct Rural Housing Loans USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain home ownership. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Families must be without adequate housing, but be able to afford the mortgage payments including taxes and insurance, which are typically 24 percent of an applicant s income. However, payment subsidy is available to applicants to enhance repayment ability. Loans are for up to 33 years and the term for manufactured homes is 30 years. Other UDSA Loan Factors Owner occupied purchase At least a 620 FICO credit score Standard debt-to-income ratios are 29/41 - Housing ratio is 29% of your gross monthly income and 41% of your gross monthly income for total debt There are income limitations Maximum loan amount will be 102% of the appraised value of the home (100% plus the 2% USDA loan guarantee fee) USDA loans allow for the closing cost to be included in the loan amount (appraisal permitting) A bankruptcy Chapter 7 must have been discharged for three years or more A Chapter 13 When all court approved payments have been made on time as agreed for at least one year Rural Repair and Rehabilitation Loans and Grants - The Very Low-Income Housing Repair program provides loans and grants to very low-income homeowners to repair, improve, or modernize their dwellings or to remove health and safety hazards.

61 Eligibility - To obtain a loan, homeowner-occupants must be unable to obtain affordable credit elsewhere and must have very low incomes, defined as below 50 percent of the area median income. They must need to make repairs and improvements to make the dwelling more safe and sanitary or to remove health and safety hazards. Grants are only available to homeowners who are 62 years old or older and cannot repay a Section 504 loan. Mutual Self-Help Loans - The Section 502 Mutual Self-Help Housing Loan program is used primarily to help very low- and low-income households construct their own homes. The program is targeted to families who are unable to buy clean, safe housing through conventional methods. Families participating in a mutual self-help project perform approximately 65 percent of the construction labor on each other's homes under qualified supervision. The savings from the reduction in labor costs allows otherwise ineligible families to own their homes. If families cannot meet their mortgage payments during the construction phase, the funds for these payments can be included in the loan. Resources Property Eligibility Site - Income Eligibility Site - come@11 Various Conditions to Down Payment Assistance Georgia has many down payment assistance programs. Nothing is standard in qualifying and loan processing. Keep in mind: Funds are available on a first come, first serve basis May require the buyer to be a first time homebuyer, meaning that they have not owned a home within the last three years You may or may not be able to add and layer other programs together Not all lenders participate in down payment assistance programs Only certain areas of the state may qualify, i.e. rural areas Each city and county has their own programs limited to specific areas Purchase price limitation Income limitations - Entire household income Credit score limitations May require more than one appraisal Reserve requirements and or limits after closing The down payment assistance usually is provided in the form of a second lien placed against the qualifying property for a set period of time May require a home buying housing certificate Lender underwriting and down payment program sponsor underwriting Takes longer to close the transaction - Allow 60 day closings

62 Fair Housing Discrimination Complaints Fair Housing Law Housing discrimination based on your race, color, national origin, religion, sex, family status, or disability is illegal by federal law. If you have been trying to buy or rent a home or apartment and you believe your rights have been violated, you can file a fair housing complaint. The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members. What Is Prohibited In the Sale and Rental of Housing? No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap: Refuse to rent or sell housing Refuse to negotiate for housing Make housing unavailable Deny a dwelling Set different terms, conditions or privileges for sale or rental of a dwelling. Provide different housing services or facilities Falsely deny that housing is available for inspection, sale, or rental For profit, persuade owners to sell or rent (blockbusting) Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing In Addition: It is illegal for anyone to: Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act In Mortgage Lending No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability): Refuse to make a mortgage loan Refuse to provide information regarding loans Impose different terms or conditions on a loan, such as different interest rates, points, or fees Discriminate in appraising property Refuse to purchase a loan

63 Set different terms or conditions for purchasing a loan Fair Housing Penalties Civil penalties of up to $10,000 for the first offense, up to $25,000 for the second offense within a five-year period, and up to $50,000 for the third offense within a seven-year period Monetary fines for actual and/or punitive damages caused by the discrimination An injunction to stop the sale or rental of the property to someone else, making it available to the complainant Court costs Criminal penalties against those who coerce, intimidate, threaten, or interfere with a person s buying, renting, or selling of housing State penalties, including the loss of the real estate license Fraud is a reality. Get informed. Be prepared. Mortgage fraud schemes employ some type of material misstatement, misrepresentation, or omission relating to the property or potential borrower which is relied on by an underwriter or lender to fund, purchase, or insure a loan. These misstatements, misrepresentations, or omissions are indicative of mortgage fraud and include the following: Inflated Appraisals Fictitious/Stolen Identities Nominee/Straw Buyers False Loan Application Fraudulent Supporting Loan Documentation Kickbacks Although there are many different types of schemes, mortgage fraud can be summarized as a form of bank robbery where the bank is not even aware it has been robbed until months or years later. One benchmark illustrating this point is the Financial Crimes Enforcement Network s Mortgage Loan Fraud Update, which reveals an 88% uptick in U.S. mortgage fraud cases in the second quarter of 2011 from the same period a year ago. Report Mortgage Fraud, Mortgage Scams and Predatory Lending The Federal Bureau of Investigation (FBI) (202) National FBI Financial Institution Fraud Unit The Federal Trade Commission (FTC) and and To file complaint (877) Identity Theft Clearinghouse (877) Consumer Response Center To report fraud or register a complaint about a national bank, contact Office of the Comptroller of the Currency (OCC) Comptroller of the Currency (800)

64 To report fraud or register a complaint about a federal savings and loan association, contact: Office of Thrift Supervision (OTS) Consumer Affairs consumer.complaint@ots.treas.gov (202) (800) for consumer complaints National Credit Union Association (NCUA) Phone: (512) State Chartered Credit Unions The National Association of Attorneys General Phone: (202) National Fraud Information Center The National Fraud Information Center is a project of the National Consumers League. It focuses mainly on fraud against the elderly, and internet and telemarketing fraud all sources of mortgage fraud and mortgage scams. Center for Responsible Lending (919) U.S. Dept. of Housing and Urban Development (HUD) Office of Consumer and Regulatory Affairs Director, Interstate land Sales/RESPA Division (202) National Hotline: (800) Equifax For Fraud Alerts: P.O. Box Atlanta, GA (800) Experian For Fraud Alerts: P.O. Box 9530 Allen TX Phone: (888) Trans Union For Fraud Alerts: Phone: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634

65 Sponsor Today: Cathy McDaniel American Real Estate University Cell

66 Free Money Financing Your Dream Home in Today's Market Though the current economic climate presents some challenges, the time to buy a home is now. Interest rates are low, money is available and sellers are willing to roll out the red carpet to entice a buyer to buy their home. Tips for Homebuyers All homebuyers must convince the lender that they deserve financing today and will keep up their end of the deal in making all their future payments on time. All mortgage loans today are full qualifying. We have more stringent lending practices then every before. Keep in mind when you are applying for a mortgage loan, an approval is based on the level of risk of the borrower and property. If you are a high risk buyer or business owner you aren t going to get an approval. If you lower your risk by being in compliance with the lending markets, having a good credit profile, a good personal credit score, good trade references, money in the bank you improve your chances of an approval. If you don t have all of those things to lower your risk, don t wait. Start now to improve your standing as a low risk borrower so as the credit markets loosen, and they will in due time, you are ready to take advantage of the programs that will be made available. If the property condition is poor, it will not qualify for financing. However, financing is available to purchase the home in its current condition, finance the repairs into the loan and have the repairs completed after closing. Lending Options for Repairs Researching your MLS for appropriate properties for you buyer, keep in mind today, not to max out their buying power in the front end. Leave room for the buyer to select a home that needs some TLC and be able to finance into their loan amount for limited repairs and upgrades, i.e. the buyer qualifies for $150,000 purchase, show home that are below $140,000 leaving room to finance $10,000 for home revisions. For every $1,000 the buyer adds to their loan amount, it only changes their monthly payment around $4.00. FHA 203(b) - Escrow holdbacks are used to facilitate loan closings for properties that require no more than $5000 of repairs to meet FHA s minimum property requirements. Purchaser(s) are permitted to include in their mortgage an amount equal to 110% of the estimated cost of the repairs. All repairs are to be completed by the purchaser within 90 days of closing.

67 FHA 203(k) Streamline - The Streamline (K) program permits homebuyers to finance up to $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. The buyer's lender will order an after repaired appraisal as through the work has been completed and allow 6 months to complete the project. The FHA 203K is available for a one-to-four unit property. FHA Energy Efficient - Under the FHA EEM Program, a borrower can finance into the mortgage 100 percent of the cost of eligible energy efficient improvements, subject to certain dollar limitations, without an appraisal of the energy improvements and without further credit qualification of the borrower. The total cost of the improvements (including maintenance costs) must be less than the total present value of the energy saved over the useful life of the improvements. The cost of any improvement to the property that will increase the property's energy efficiency and that is determined to be "cost effective" is eligible for financing into the mortgage and its cost may be added to the mortgage amount up to the greater of 5 percent of the property's value (not to exceed $8000) or $4000. Fannie Mae HomePath Renovation - Allows a buyer to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation - up to 35% of the as completed value, no more than $35,000. Down payment (at least 3 percent) can be funded by the buyer s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer and renovation amount is based on an appraisal as completed value. No mortgage insurance required. Available for primary residences, second homes, and investment properties. VA Energy Efficiency - Energy efficiency improvements up to $6,000 - The resulting increase in loan payments will normally be offset by a reduction in utility costs. VA Vendee Financing VA REO Property Only VA has re-opened Vendee Financing to purchasers of Vendee eligible VA REO Properties. Vendee financing is a loan product offered to veterans and non-veterans to help finance the purchase of VA REO Properties. Some of the Guidelines are Listed Below Seller may contribute up to six percent of the contract sales price to pay for funding fee, closing cost, prepaid and other expenses Vendee mortgages are assumable by qualification Vendee financing requires a 620 credit score Available terms of 15, 20, 25 and 30 year fix rate Interest rates are determined by the VA Mortgage insurance is not required Tax service fee, appraisal fee, flood certification or prepayment penalty are not required Owner Occupied Purchase Amount financed with as little as 0% down The loan amount may be increased up to 2% to finance closing costs, pre-paids or other expenses The funding fee may not be financed Non-owner Occupied Purchaser (Investor) Amount financed as little as 5% down

68 Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment Investors must have experience managing rental properties to include anticipated rent on subject property in underwriting No maximum number of investment properties VA Loan Limits VA does not impose a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan; however loan limits establish the maximum possible guaranty on a loan. The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2012 VA limit. A veteran with full entitlement available may borrow up to the limit shown below and VA will guarantee 25 percent of the loan amount. If a veteran has previously used entitlement that has not been restored, the maximum guaranty amount available to that veteran is reduced accordingly. Most states the VA loan limit is $417,000. VA loan limits in some counties in the following states, i.e. AK, CA, CO, DC, CT, GU, HI, ID, MA, MD, NJ, NY, PA, UT, VA and VI will range from $419,750 to $625,500. Down Payment Assistance, Gift and Grant Programs Home prices have dropped, and mortgage rates are low. For anyone with the tens of thousands of dollars now required for a down payment, it's a pretty good time to buy a house. Now, it's even getting easier without that hefty down payment, as governments step in to help out. A growing number of state and local governments are now offering what are called "down payment assistance programs," grants or low- and no-interest loans to firsttime buyers or those who haven't owned a house in a few years. The number of programs, now somewhere around 1,000 nationally, has increased 3% to 5% in the last six months alone. Sellers are not allowed to give homebuyers down payment funds. That's where down payment assistance, gift and grant programs step in. Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to achieve homeownership. By using down payment assistance, a seller can market a home to a much larger group of prospective buyers. Millions of people want to buy homes, have the income and credit to qualify for loans, but do not have the funds necessary for the down payment and closing costs. Down payment assistance bridges this gap. Property Standards HQS Inspection A Housing Quality Standard Inspection (HQS) must be performed on all eligible properties and are property standards that have been approved by the U.S. Department of Housing and Urban Development to insure that all properties are decent, safe, and sanitary. The Lender is responsible for contacting the HQS Inspector The HQS Inspection is ordered in advance of an appraisal The HQS Inspection report and fully executed sales contract must be provided to the FHA or VA appraiser prior to inspecting the property.

69 Property Repairs and Final Inspection Repairs noted on the appraisal and HQS inspection deficiencies must be corrected. Inspection room by room. Interior - walls, ceilings, floors, doors, windows, electrical outlets, stove, refrigerator, sinks, showers, tubs, toilets, smoke detectors, stairs etc. Utilities - plumbing, heating, AC, electrical, water supply, water heater, must be in working order at time of inspection. Exterior - lead paint on homes built prior to 1978, steps and handrails, patio, porches, roof, gutters, sewer, septic tank, well, chimney. Other - electrical hazards, site and neighborhood conditions. The Approved Lender Will Be Responsible For Approving all contractors, their work plans and cost estimate Establishing a repair escrow account that is held at closing Monitoring repairs and payment of contractors Timeline to complete repairs will vary from lender to lender. I.e days after closing. FHA 203(k) Streamline allows 6 months to complete repairs Obtaining reports to document compliance with any down payment program Funds are released upon completion and final inspection Property Value Two appraisals may be required and must meet the fair market appraisal guidelines REO sellers order an appraisal prior to listing the property Negotiate in your offer for the property to qualify for the down payment assistance program Order a fair market value BPO or appraisal prior to submitting an offer Appraisal for loan processing will be ordered by the lender Value must be greater than or equal to the loan amount Verify the work plans and cost estimates for a buy and repair program is reasonable and accurate Georgia Dream Homeownership Program HOME (4663) The Georgia Dream Homeownership Program makes it possible for eligible homebuyers to own their own home with affordable first mortgage financing and down payment assistance. The Department of Community Affairs offers qualified homebuyers statewide who meet certain guidelines. In addition, homebuyers must have modest assets and meet the flexible credit underwriting criteria for the loan program they have selected. It is easy to qualify. Georgia Dream Loans are available to: First-time homebuyers If you purchase a home in one of the targeted census tract areas, the first time homebuyer rule does not apply Those who have not owned a home in the past three years Those who purchase a home in targeted areas

70 Those who have household incomes below the maximum referenced below Those who have liquid assets no more than $20,000 or 20% of the sales price (whichever is greater) Those who meet mortgage loan credit requirements The Georgia Dream Loan is a 30 year, fixed interest rate mortgage. Local lenders give credit approval for FHA, USDA-RD, VA or conventional uninsured mortgage loans. Not all lenders are approved to offer the Georgia Dream Loan. To locate an approved lender, visit the website below: If you purchase a home in the Atlanta Metropolitan Statistical area your total household income, based on the number of people living in the home can be no more than: One to two persons $71,000 Three or more persons $82,000 The sales price of the home cannot exceed $250,000 Area coverage includes: Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Newton, Paulding, Pickens, Pike, Rockdale, Spalding or Walton County If you purchase a home in a county not listed above, your total household income, based on the number of people living in the home can be no more than: One to two persons $61,000 Three or more persons $70,000 The sales price of the home cannot exceed $200,000 An Applicant is not considered to have had a prior ownership interest in a single family residence if: The Applicant did not hold title to the home but did receive the benefits of the mortgage interest deduction through the filing of a joint federal income tax return with a spouse The Applicant did not hold title to the home, but did receive all or a portion of the proceeds of the sale of the residence The Applicant continued to hold title following a divorce which granted property to other spouse, but the Applicant has not used the property as a principal residence in the last three (3) years The residence is or was a manufactured home whose structure is not permanently affixed to a permanent foundation in accordance with local codes and taxed as personal property (subject to ad valorem taxes). If the manufactured home was or is taxed as real property, then the Applicant is considered to be a prior homeowner Applicants may own vacant land or a manufactured home taxed as personal property at the time they close on their Loan Co-Signers are Allowed Under the Following Guidelines Co-signers cannot take title to the property or live in the property securing our Loan. (Co-signers who live in the mortgaged property are considered co-applicants.) Co-signers must sign the Note. Co-signers may not sign the Security Deed or DCA forms nor may they hold title to the property.

71 The co-signers' income is not included in the Household Annual Income but may be used as qualifying income Co-signers credit and ratios must meet the underwriting requirements Annual Household Income Household Annual Income is defined as all amounts, which go to, or are provided on behalf of, the Applicant(s) or spouse (even if temporarily absent), or any household member who will occupy the subject property within the 12-month period immediately following loan closing. Household Annual Income is determined by ascertaining the income received from each source over the most recent representative period and projecting those amounts over a one (1) year period. Household members Include The Applicant, co-applicant, spouse (unless it can be shown that a spouse resides elsewhere), parents, and children who live with the applicant and co-applicant at least six (6) months of each year Any related or un-related person who will reside in the mortgaged property during the 12-month period immediately following closing, regardless of previous address Any person who has resided with the Applicant and/or co-applicant prior to closing and whose financial affairs are combined with the Applicant s and/or the co-applicant s according to the documents in the Underwriting Package. If such person will not occupy the mortgaged property, his or her income can be excluded from Household Annual Income only if the Underwriting Package contains an explanation from the Applicant(s) as to the person s future residence plans Household members does not include: foster children; live-in aides and children of live-in aides; unborn children; and children being pursued for legal custody or adoption who are not currently living with the household Non-Applicant adults (18 years of age or older) who are also full time high school or college students must provide evidence of enrollment from the high school or college at the time of application Eligible Properties - Georgia Dream Homeownership Program Loans must be secured by property which: Is located in the state of Georgia The title is held by the mortgagor at the time of closing as fee simple or under an eligible leasehold interest (the terms of the ground lease must extend beyond the maturity date of the Loan and only the land may be under a ground lease; the improvements must be owned by the mortgagor) Is a one (1) unit single family dwelling (attached or detached) designed for residential use, condominiums or planned unit developments approved by Fannie Mae, Freddie Mac or the Mortgage Insurer, townhomes and modular homes that are located in an area consistent with such use and intended for owner occupancy Is eligible for insurance through the Mortgage Insurer Other Requirements If the home is served by a well as its water source, DCA requires that a local or county health inspector test and certify to the safety and adequacy o the water source. Report must be dated within 30 days prior to closing. If the home is served by a septic tank, a test by a licensed plumbing contractor or local government health or building inspector will be required. Clear termite letters are required

72 Lenders must provide a copy of clear plumbing, electrical, and heating certifications if the appraiser indicated that the property was vacant and/or the systems were not operational at the time of the appraisal inspection Down Payment Assistance for Georgia Dram First Mortgage Loan Buyers who qualify for the Georgia Dream First Mortgage also qualify for down payment assistance. The buyer must: Use the loan in conjunction with a Georgia Dream First Mortgage Loan Complete a Homebuyer Education class and provide a certificate of completion Contribute a minimum of $1,000 to the purchase transaction Down Payment Loan Options STANDARD All eligible homebuyers qualify for $5,000 PEN (Protectors, Educators, Nurses), includes all employees of state licensed health care facilities Homebuyers who are employed in qualified public protection, military, health care or education qualify for $7,500 CHOICE (Consumer Home Ownership and Independence Choices for Everyone) Homebuyers whose household includes an individual living with a disability qualify for $7,500. Co-Op Homebuyers who are employed by local governments in participating Co-Op communities qualify for $7,500 Single Family Development Homebuyers who are purchasing homes in this special DCA Development qualify for up to $20,000 Down payment funds are provided as a Second Mortgage Loan for the purpose of principal reduction and the payment of pre-paid items and closing cost. Additional loan description: No monthly payments No interest Loan must be repaid when the home is sold or refinanced or no longer used as the buyer s person residence Resources Personalized Flyers - Homebuyer Education Agencies -

73 UDSA - United States Department of Agriculture Rural Development Rural Development Loan Assistance UDSA loans are government insured mortgages that are offered to purchase a home in rural areas with no down payment and low monthly mortgage insurance. Program assistance is provided in many ways, including direct or guaranteed loans, grants, technical assistance, research and educational materials. Currently, there are two kinds of USDA rural development loans available for single family households: USDA Guaranteed Rural Housing Loans USDA Guaranteed Loans are the most common type of USDA rural development loan and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate. USDA Direct Rural Housing Loans USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain home ownership. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Families must be without adequate housing, but be able to afford the mortgage payments including taxes and insurance, which are typically 24 percent of an applicant s income. However, payment subsidy is available to applicants to enhance repayment ability. Loans are for up to 33 years and the term for manufactured homes is 30 years. Other UDSA Loan Factors Owner occupied purchase At least a 620 FICO credit score Standard debt-to-income ratios are 29/41 - Housing ratio is 29% of your gross monthly income and 41% of your gross monthly income for total debt There are income limitations Maximum loan amount will be 102% of the appraised value of the home (100% plus the 2% USDA loan guarantee fee) USDA loans allow for the closing cost to be included in the loan amount (appraisal permitting) A bankruptcy Chapter 7 must have been discharged for three years or more A Chapter 13 When all court approved payments have been made on time as agreed for at least one year Rural Repair and Rehabilitation Loans and Grants - The Very Low-Income Housing Repair program provides loans and grants to very low-income homeowners to repair, improve, or modernize their dwellings or to remove health and safety hazards.

74 Eligibility - To obtain a loan, homeowner-occupants must be unable to obtain affordable credit elsewhere and must have very low incomes, defined as below 50 percent of the area median income. They must need to make repairs and improvements to make the dwelling more safe and sanitary or to remove health and safety hazards. Grants are only available to homeowners who are 62 years old or older and cannot repay a Section 504 loan. Mutual Self-Help Loans - The Section 502 Mutual Self-Help Housing Loan program is used primarily to help very low- and low-income households construct their own homes. The program is targeted to families who are unable to buy clean, safe housing through conventional methods. Families participating in a mutual self-help project perform approximately 65 percent of the construction labor on each other's homes under qualified supervision. The savings from the reduction in labor costs allows otherwise ineligible families to own their homes. If families cannot meet their mortgage payments during the construction phase, the funds for these payments can be included in the loan. Resources Property Eligibility Site - Income Eligibility Site - come@11 Various Conditions to Down Payment Assistance Georgia has many down payment assistance programs. Nothing is standard in qualifying and loan processing. Keep in mind: Funds are available on a first come, first serve basis May require the buyer to be a first time homebuyer, meaning that they have not owned a home within the last three years You may or may not be able to add and layer other programs together Not all lenders participate in down payment assistance programs Only certain areas of the state may qualify, i.e. rural areas Each city and county has their own programs limited to specific areas Purchase price limitation Income limitations - Entire household income Credit score limitations May require more than one appraisal Reserve requirements and or limits after closing The down payment assistance usually is provided in the form of a second lien placed against the qualifying property for a set period of time May require a home buying housing certificate Lender underwriting and down payment program sponsor underwriting Takes longer to close the transaction - Allow 60 day closings

75 Fair Housing Discrimination Complaints Fair Housing Law Housing discrimination based on your race, color, national origin, religion, sex, family status, or disability is illegal by federal law. If you have been trying to buy or rent a home or apartment and you believe your rights have been violated, you can file a fair housing complaint. The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members. What Is Prohibited In the Sale and Rental of Housing? No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap: Refuse to rent or sell housing Refuse to negotiate for housing Make housing unavailable Deny a dwelling Set different terms, conditions or privileges for sale or rental of a dwelling. Provide different housing services or facilities Falsely deny that housing is available for inspection, sale, or rental For profit, persuade owners to sell or rent (blockbusting) Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing In Addition: It is illegal for anyone to: Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act In Mortgage Lending No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability): Refuse to make a mortgage loan Refuse to provide information regarding loans Impose different terms or conditions on a loan, such as different interest rates, points, or fees Discriminate in appraising property Refuse to purchase a loan

76 Set different terms or conditions for purchasing a loan Fair Housing Penalties Civil penalties of up to $10,000 for the first offense, up to $25,000 for the second offense within a five-year period, and up to $50,000 for the third offense within a seven-year period Monetary fines for actual and/or punitive damages caused by the discrimination An injunction to stop the sale or rental of the property to someone else, making it available to the complainant Court costs Criminal penalties against those who coerce, intimidate, threaten, or interfere with a person s buying, renting, or selling of housing State penalties, including the loss of the real estate license Fraud is a reality. Get informed. Be prepared. Mortgage fraud schemes employ some type of material misstatement, misrepresentation, or omission relating to the property or potential borrower which is relied on by an underwriter or lender to fund, purchase, or insure a loan. These misstatements, misrepresentations, or omissions are indicative of mortgage fraud and include the following: Inflated Appraisals Fictitious/Stolen Identities Nominee/Straw Buyers False Loan Application Fraudulent Supporting Loan Documentation Kickbacks Although there are many different types of schemes, mortgage fraud can be summarized as a form of bank robbery where the bank is not even aware it has been robbed until months or years later. One benchmark illustrating this point is the Financial Crimes Enforcement Network s Mortgage Loan Fraud Update, which reveals an 88% uptick in U.S. mortgage fraud cases in the second quarter of 2011 from the same period a year ago. Report Mortgage Fraud, Mortgage Scams and Predatory Lending The Federal Bureau of Investigation (FBI) (202) National FBI Financial Institution Fraud Unit The Federal Trade Commission (FTC) and and To file complaint (877) Identity Theft Clearinghouse (877) Consumer Response Center To report fraud or register a complaint about a national bank, contact Office of the Comptroller of the Currency (OCC) Comptroller of the Currency (800)

77 To report fraud or register a complaint about a federal savings and loan association, contact: Office of Thrift Supervision (OTS) Consumer Affairs consumer.complaint@ots.treas.gov (202) (800) for consumer complaints National Credit Union Association (NCUA) Phone: (512) State Chartered Credit Unions The National Association of Attorneys General Phone: (202) National Fraud Information Center The National Fraud Information Center is a project of the National Consumers League. It focuses mainly on fraud against the elderly, and internet and telemarketing fraud all sources of mortgage fraud and mortgage scams. Center for Responsible Lending (919) U.S. Dept. of Housing and Urban Development (HUD) Office of Consumer and Regulatory Affairs Director, Interstate land Sales/RESPA Division (202) National Hotline: (800) Equifax For Fraud Alerts: P.O. Box Atlanta, GA (800) Experian For Fraud Alerts: P.O. Box 9530 Allen TX Phone: (888) Trans Union For Fraud Alerts: Phone: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634

78 Sponsor Today: Cathy McDaniel American Real Estate University Cell

79 Free Money Financing Your Dream Home in Today's Market Though the current economic climate presents some challenges, the time to buy a home is now. Interest rates are low, money is available and sellers are willing to roll out the red carpet to entice a buyer to buy their home. Tips for Homebuyers All homebuyers must convince the lender that they deserve financing today and will keep up their end of the deal in making all their future payments on time. All mortgage loans today are full qualifying. We have more stringent lending practices then every before. Keep in mind when you are applying for a mortgage loan, an approval is based on the level of risk of the borrower and property. If you are a high risk buyer or business owner you aren t going to get an approval. If you lower your risk by being in compliance with the lending markets, having a good credit profile, a good personal credit score, good trade references, money in the bank you improve your chances of an approval. If you don t have all of those things to lower your risk, don t wait. Start now to improve your standing as a low risk borrower so as the credit markets loosen, and they will in due time, you are ready to take advantage of the programs that will be made available. If the property condition is poor, it will not qualify for financing. However, financing is available to purchase the home in its current condition, finance the repairs into the loan and have the repairs completed after closing. Lending Options for Repairs Researching your MLS for appropriate properties for you buyer, keep in mind today, not to max out their buying power in the front end. Leave room for the buyer to select a home that needs some TLC and be able to finance into their loan amount for limited repairs and upgrades, i.e. the buyer qualifies for $150,000 purchase, show home that are below $140,000 leaving room to finance $10,000 for home revisions. For every $1,000 the buyer adds to their loan amount, it only changes their monthly payment around $4.00. FHA 203(b) - Escrow holdbacks are used to facilitate loan closings for properties that require no more than $5000 of repairs to meet FHA s minimum property requirements. Purchaser(s) are permitted to include in their mortgage an amount equal to 110% of the estimated cost of the repairs. All repairs are to be completed by the purchaser within 90 days of closing.

80 FHA 203(k) Streamline - The Streamline (K) program permits homebuyers to finance up to $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. The buyer's lender will order an after repaired appraisal as through the work has been completed and allow 6 months to complete the project. The FHA 203K is available for a one-to-four unit property. FHA Energy Efficient - Under the FHA EEM Program, a borrower can finance into the mortgage 100 percent of the cost of eligible energy efficient improvements, subject to certain dollar limitations, without an appraisal of the energy improvements and without further credit qualification of the borrower. The total cost of the improvements (including maintenance costs) must be less than the total present value of the energy saved over the useful life of the improvements. The cost of any improvement to the property that will increase the property's energy efficiency and that is determined to be "cost effective" is eligible for financing into the mortgage and its cost may be added to the mortgage amount up to the greater of 5 percent of the property's value (not to exceed $8000) or $4000. Fannie Mae HomePath Renovation - Allows a buyer to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation - up to 35% of the as completed value, no more than $35,000. Down payment (at least 3 percent) can be funded by the buyer s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer and renovation amount is based on an appraisal as completed value. No mortgage insurance required. Available for primary residences, second homes, and investment properties. VA Energy Efficiency - Energy efficiency improvements up to $6,000 - The resulting increase in loan payments will normally be offset by a reduction in utility costs. VA Vendee Financing VA REO Property Only VA has re-opened Vendee Financing to purchasers of Vendee eligible VA REO Properties. Vendee financing is a loan product offered to veterans and non-veterans to help finance the purchase of VA REO Properties. Some of the Guidelines are Listed Below Seller may contribute up to six percent of the contract sales price to pay for funding fee, closing cost, prepaid and other expenses Vendee mortgages are assumable by qualification Vendee financing requires a 620 credit score Available terms of 15, 20, 25 and 30 year fix rate Interest rates are determined by the VA Mortgage insurance is not required Tax service fee, appraisal fee, flood certification or prepayment penalty are not required Owner Occupied Purchase Amount financed with as little as 0% down The loan amount may be increased up to 2% to finance closing costs, pre-paids or other expenses The funding fee may not be financed Non-owner Occupied Purchaser (Investor) Amount financed as little as 5% down

81 Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment Investors must have experience managing rental properties to include anticipated rent on subject property in underwriting No maximum number of investment properties VA Loan Limits VA does not impose a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan; however loan limits establish the maximum possible guaranty on a loan. The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2012 VA limit. A veteran with full entitlement available may borrow up to the limit shown below and VA will guarantee 25 percent of the loan amount. If a veteran has previously used entitlement that has not been restored, the maximum guaranty amount available to that veteran is reduced accordingly. Most states the VA loan limit is $417,000. VA loan limits in some counties in the following states, i.e. AK, CA, CO, DC, CT, GU, HI, ID, MA, MD, NJ, NY, PA, UT, VA and VI will range from $419,750 to $625,500. Down Payment Assistance, Gift and Grant Programs Home prices have dropped, and mortgage rates are low. For anyone with the tens of thousands of dollars now required for a down payment, it's a pretty good time to buy a house. Now, it's even getting easier without that hefty down payment, as governments step in to help out. A growing number of state and local governments are now offering what are called "down payment assistance programs," grants or low- and no-interest loans to firsttime buyers or those who haven't owned a house in a few years. The number of programs, now somewhere around 1,000 nationally, has increased 3% to 5% in the last six months alone. Sellers are not allowed to give homebuyers down payment funds. That's where down payment assistance, gift and grant programs step in. Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to achieve homeownership. By using down payment assistance, a seller can market a home to a much larger group of prospective buyers. Millions of people want to buy homes, have the income and credit to qualify for loans, but do not have the funds necessary for the down payment and closing costs. Down payment assistance bridges this gap. Property Standards HQS Inspection A Housing Quality Standard Inspection (HQS) must be performed on all eligible properties and are property standards that have been approved by the U.S. Department of Housing and Urban Development to insure that all properties are decent, safe, and sanitary. The Lender is responsible for contacting the HQS Inspector The HQS Inspection is ordered in advance of an appraisal The HQS Inspection report and fully executed sales contract must be provided to the FHA or VA appraiser prior to inspecting the property.

82 Property Repairs and Final Inspection Repairs noted on the appraisal and HQS inspection deficiencies must be corrected. Inspection room by room. Interior - walls, ceilings, floors, doors, windows, electrical outlets, stove, refrigerator, sinks, showers, tubs, toilets, smoke detectors, stairs etc. Utilities - plumbing, heating, AC, electrical, water supply, water heater, must be in working order at time of inspection. Exterior - lead paint on homes built prior to 1978, steps and handrails, patio, porches, roof, gutters, sewer, septic tank, well, chimney. Other - electrical hazards, site and neighborhood conditions. The Approved Lender Will Be Responsible For Approving all contractors, their work plans and cost estimate Establishing a repair escrow account that is held at closing Monitoring repairs and payment of contractors Timeline to complete repairs will vary from lender to lender. I.e days after closing. FHA 203(k) Streamline allows 6 months to complete repairs Obtaining reports to document compliance with any down payment program Funds are released upon completion and final inspection Property Value Two appraisals may be required and must meet the fair market appraisal guidelines REO sellers order an appraisal prior to listing the property Negotiate in your offer for the property to qualify for the down payment assistance program Order a fair market value BPO or appraisal prior to submitting an offer Appraisal for loan processing will be ordered by the lender Value must be greater than or equal to the loan amount Verify the work plans and cost estimates for a buy and repair program is reasonable and accurate Georgia Dream Homeownership Program HOME (4663) The Georgia Dream Homeownership Program makes it possible for eligible homebuyers to own their own home with affordable first mortgage financing and down payment assistance. The Department of Community Affairs offers qualified homebuyers statewide who meet certain guidelines. In addition, homebuyers must have modest assets and meet the flexible credit underwriting criteria for the loan program they have selected. It is easy to qualify. Georgia Dream Loans are available to: First-time homebuyers If you purchase a home in one of the targeted census tract areas, the first time homebuyer rule does not apply Those who have not owned a home in the past three years Those who purchase a home in targeted areas

83 Those who have household incomes below the maximum referenced below Those who have liquid assets no more than $20,000 or 20% of the sales price (whichever is greater) Those who meet mortgage loan credit requirements The Georgia Dream Loan is a 30 year, fixed interest rate mortgage. Local lenders give credit approval for FHA, USDA-RD, VA or conventional uninsured mortgage loans. Not all lenders are approved to offer the Georgia Dream Loan. To locate an approved lender, visit the website below: If you purchase a home in the Atlanta Metropolitan Statistical area your total household income, based on the number of people living in the home can be no more than: One to two persons $71,000 Three or more persons $82,000 The sales price of the home cannot exceed $250,000 Area coverage includes: Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Newton, Paulding, Pickens, Pike, Rockdale, Spalding or Walton County If you purchase a home in a county not listed above, your total household income, based on the number of people living in the home can be no more than: One to two persons $61,000 Three or more persons $70,000 The sales price of the home cannot exceed $200,000 An Applicant is not considered to have had a prior ownership interest in a single family residence if: The Applicant did not hold title to the home but did receive the benefits of the mortgage interest deduction through the filing of a joint federal income tax return with a spouse The Applicant did not hold title to the home, but did receive all or a portion of the proceeds of the sale of the residence The Applicant continued to hold title following a divorce which granted property to other spouse, but the Applicant has not used the property as a principal residence in the last three (3) years The residence is or was a manufactured home whose structure is not permanently affixed to a permanent foundation in accordance with local codes and taxed as personal property (subject to ad valorem taxes). If the manufactured home was or is taxed as real property, then the Applicant is considered to be a prior homeowner Applicants may own vacant land or a manufactured home taxed as personal property at the time they close on their Loan Co-Signers are Allowed Under the Following Guidelines Co-signers cannot take title to the property or live in the property securing our Loan. (Co-signers who live in the mortgaged property are considered co-applicants.) Co-signers must sign the Note. Co-signers may not sign the Security Deed or DCA forms nor may they hold title to the property.

84 The co-signers' income is not included in the Household Annual Income but may be used as qualifying income Co-signers credit and ratios must meet the underwriting requirements Annual Household Income Household Annual Income is defined as all amounts, which go to, or are provided on behalf of, the Applicant(s) or spouse (even if temporarily absent), or any household member who will occupy the subject property within the 12-month period immediately following loan closing. Household Annual Income is determined by ascertaining the income received from each source over the most recent representative period and projecting those amounts over a one (1) year period. Household members Include The Applicant, co-applicant, spouse (unless it can be shown that a spouse resides elsewhere), parents, and children who live with the applicant and co-applicant at least six (6) months of each year Any related or un-related person who will reside in the mortgaged property during the 12-month period immediately following closing, regardless of previous address Any person who has resided with the Applicant and/or co-applicant prior to closing and whose financial affairs are combined with the Applicant s and/or the co-applicant s according to the documents in the Underwriting Package. If such person will not occupy the mortgaged property, his or her income can be excluded from Household Annual Income only if the Underwriting Package contains an explanation from the Applicant(s) as to the person s future residence plans Household members does not include: foster children; live-in aides and children of live-in aides; unborn children; and children being pursued for legal custody or adoption who are not currently living with the household Non-Applicant adults (18 years of age or older) who are also full time high school or college students must provide evidence of enrollment from the high school or college at the time of application Eligible Properties - Georgia Dream Homeownership Program Loans must be secured by property which: Is located in the state of Georgia The title is held by the mortgagor at the time of closing as fee simple or under an eligible leasehold interest (the terms of the ground lease must extend beyond the maturity date of the Loan and only the land may be under a ground lease; the improvements must be owned by the mortgagor) Is a one (1) unit single family dwelling (attached or detached) designed for residential use, condominiums or planned unit developments approved by Fannie Mae, Freddie Mac or the Mortgage Insurer, townhomes and modular homes that are located in an area consistent with such use and intended for owner occupancy Is eligible for insurance through the Mortgage Insurer Other Requirements If the home is served by a well as its water source, DCA requires that a local or county health inspector test and certify to the safety and adequacy o the water source. Report must be dated within 30 days prior to closing. If the home is served by a septic tank, a test by a licensed plumbing contractor or local government health or building inspector will be required. Clear termite letters are required

85 Lenders must provide a copy of clear plumbing, electrical, and heating certifications if the appraiser indicated that the property was vacant and/or the systems were not operational at the time of the appraisal inspection Down Payment Assistance for Georgia Dram First Mortgage Loan Buyers who qualify for the Georgia Dream First Mortgage also qualify for down payment assistance. The buyer must: Use the loan in conjunction with a Georgia Dream First Mortgage Loan Complete a Homebuyer Education class and provide a certificate of completion Contribute a minimum of $1,000 to the purchase transaction Down Payment Loan Options STANDARD All eligible homebuyers qualify for $5,000 PEN (Protectors, Educators, Nurses), includes all employees of state licensed health care facilities Homebuyers who are employed in qualified public protection, military, health care or education qualify for $7,500 CHOICE (Consumer Home Ownership and Independence Choices for Everyone) Homebuyers whose household includes an individual living with a disability qualify for $7,500. Co-Op Homebuyers who are employed by local governments in participating Co-Op communities qualify for $7,500 Single Family Development Homebuyers who are purchasing homes in this special DCA Development qualify for up to $20,000 Down payment funds are provided as a Second Mortgage Loan for the purpose of principal reduction and the payment of pre-paid items and closing cost. Additional loan description: No monthly payments No interest Loan must be repaid when the home is sold or refinanced or no longer used as the buyer s person residence Resources Personalized Flyers - Homebuyer Education Agencies -

86 UDSA - United States Department of Agriculture Rural Development Rural Development Loan Assistance UDSA loans are government insured mortgages that are offered to purchase a home in rural areas with no down payment and low monthly mortgage insurance. Program assistance is provided in many ways, including direct or guaranteed loans, grants, technical assistance, research and educational materials. Currently, there are two kinds of USDA rural development loans available for single family households: USDA Guaranteed Rural Housing Loans USDA Guaranteed Loans are the most common type of USDA rural development loan and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate. USDA Direct Rural Housing Loans USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain home ownership. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Families must be without adequate housing, but be able to afford the mortgage payments including taxes and insurance, which are typically 24 percent of an applicant s income. However, payment subsidy is available to applicants to enhance repayment ability. Loans are for up to 33 years and the term for manufactured homes is 30 years. Other UDSA Loan Factors Owner occupied purchase At least a 620 FICO credit score Standard debt-to-income ratios are 29/41 - Housing ratio is 29% of your gross monthly income and 41% of your gross monthly income for total debt There are income limitations Maximum loan amount will be 102% of the appraised value of the home (100% plus the 2% USDA loan guarantee fee) USDA loans allow for the closing cost to be included in the loan amount (appraisal permitting) A bankruptcy Chapter 7 must have been discharged for three years or more A Chapter 13 When all court approved payments have been made on time as agreed for at least one year Rural Repair and Rehabilitation Loans and Grants - The Very Low-Income Housing Repair program provides loans and grants to very low-income homeowners to repair, improve, or modernize their dwellings or to remove health and safety hazards.

87 Eligibility - To obtain a loan, homeowner-occupants must be unable to obtain affordable credit elsewhere and must have very low incomes, defined as below 50 percent of the area median income. They must need to make repairs and improvements to make the dwelling more safe and sanitary or to remove health and safety hazards. Grants are only available to homeowners who are 62 years old or older and cannot repay a Section 504 loan. Mutual Self-Help Loans - The Section 502 Mutual Self-Help Housing Loan program is used primarily to help very low- and low-income households construct their own homes. The program is targeted to families who are unable to buy clean, safe housing through conventional methods. Families participating in a mutual self-help project perform approximately 65 percent of the construction labor on each other's homes under qualified supervision. The savings from the reduction in labor costs allows otherwise ineligible families to own their homes. If families cannot meet their mortgage payments during the construction phase, the funds for these payments can be included in the loan. Resources Property Eligibility Site - Income Eligibility Site - come@11 Various Conditions to Down Payment Assistance Georgia has many down payment assistance programs. Nothing is standard in qualifying and loan processing. Keep in mind: Funds are available on a first come, first serve basis May require the buyer to be a first time homebuyer, meaning that they have not owned a home within the last three years You may or may not be able to add and layer other programs together Not all lenders participate in down payment assistance programs Only certain areas of the state may qualify, i.e. rural areas Each city and county has their own programs limited to specific areas Purchase price limitation Income limitations - Entire household income Credit score limitations May require more than one appraisal Reserve requirements and or limits after closing The down payment assistance usually is provided in the form of a second lien placed against the qualifying property for a set period of time May require a home buying housing certificate Lender underwriting and down payment program sponsor underwriting Takes longer to close the transaction - Allow 60 day closings

88 Fair Housing Discrimination Complaints Fair Housing Law Housing discrimination based on your race, color, national origin, religion, sex, family status, or disability is illegal by federal law. If you have been trying to buy or rent a home or apartment and you believe your rights have been violated, you can file a fair housing complaint. The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members. What Is Prohibited In the Sale and Rental of Housing? No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap: Refuse to rent or sell housing Refuse to negotiate for housing Make housing unavailable Deny a dwelling Set different terms, conditions or privileges for sale or rental of a dwelling. Provide different housing services or facilities Falsely deny that housing is available for inspection, sale, or rental For profit, persuade owners to sell or rent (blockbusting) Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing In Addition: It is illegal for anyone to: Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act In Mortgage Lending No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability): Refuse to make a mortgage loan Refuse to provide information regarding loans Impose different terms or conditions on a loan, such as different interest rates, points, or fees Discriminate in appraising property Refuse to purchase a loan

89 Set different terms or conditions for purchasing a loan Fair Housing Penalties Civil penalties of up to $10,000 for the first offense, up to $25,000 for the second offense within a five-year period, and up to $50,000 for the third offense within a seven-year period Monetary fines for actual and/or punitive damages caused by the discrimination An injunction to stop the sale or rental of the property to someone else, making it available to the complainant Court costs Criminal penalties against those who coerce, intimidate, threaten, or interfere with a person s buying, renting, or selling of housing State penalties, including the loss of the real estate license Fraud is a reality. Get informed. Be prepared. Mortgage fraud schemes employ some type of material misstatement, misrepresentation, or omission relating to the property or potential borrower which is relied on by an underwriter or lender to fund, purchase, or insure a loan. These misstatements, misrepresentations, or omissions are indicative of mortgage fraud and include the following: Inflated Appraisals Fictitious/Stolen Identities Nominee/Straw Buyers False Loan Application Fraudulent Supporting Loan Documentation Kickbacks Although there are many different types of schemes, mortgage fraud can be summarized as a form of bank robbery where the bank is not even aware it has been robbed until months or years later. One benchmark illustrating this point is the Financial Crimes Enforcement Network s Mortgage Loan Fraud Update, which reveals an 88% uptick in U.S. mortgage fraud cases in the second quarter of 2011 from the same period a year ago. Report Mortgage Fraud, Mortgage Scams and Predatory Lending The Federal Bureau of Investigation (FBI) (202) National FBI Financial Institution Fraud Unit The Federal Trade Commission (FTC) and and To file complaint (877) Identity Theft Clearinghouse (877) Consumer Response Center To report fraud or register a complaint about a national bank, contact Office of the Comptroller of the Currency (OCC) Comptroller of the Currency (800)

90 To report fraud or register a complaint about a federal savings and loan association, contact: Office of Thrift Supervision (OTS) Consumer Affairs consumer.complaint@ots.treas.gov (202) (800) for consumer complaints National Credit Union Association (NCUA) Phone: (512) State Chartered Credit Unions The National Association of Attorneys General Phone: (202) National Fraud Information Center The National Fraud Information Center is a project of the National Consumers League. It focuses mainly on fraud against the elderly, and internet and telemarketing fraud all sources of mortgage fraud and mortgage scams. Center for Responsible Lending (919) U.S. Dept. of Housing and Urban Development (HUD) Office of Consumer and Regulatory Affairs Director, Interstate land Sales/RESPA Division (202) National Hotline: (800) Equifax For Fraud Alerts: P.O. Box Atlanta, GA (800) Experian For Fraud Alerts: P.O. Box 9530 Allen TX Phone: (888) Trans Union For Fraud Alerts: Phone: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634

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92 Free Money Financing Your Dream Home in Today's Market Though the current economic climate presents some challenges, the time to buy a home is now. Interest rates are low, money is available and sellers are willing to roll out the red carpet to entice a buyer to buy their home. Tips for Homebuyers All homebuyers must convince the lender that they deserve financing today and will keep up their end of the deal in making all their future payments on time. All mortgage loans today are full qualifying. We have more stringent lending practices then every before. Keep in mind when you are applying for a mortgage loan, an approval is based on the level of risk of the borrower and property. If you are a high risk buyer or business owner you aren t going to get an approval. If you lower your risk by being in compliance with the lending markets, having a good credit profile, a good personal credit score, good trade references, money in the bank you improve your chances of an approval. If you don t have all of those things to lower your risk, don t wait. Start now to improve your standing as a low risk borrower so as the credit markets loosen, and they will in due time, you are ready to take advantage of the programs that will be made available. If the property condition is poor, it will not qualify for financing. However, financing is available to purchase the home in its current condition, finance the repairs into the loan and have the repairs completed after closing. Lending Options for Repairs Researching your MLS for appropriate properties for you buyer, keep in mind today, not to max out their buying power in the front end. Leave room for the buyer to select a home that needs some TLC and be able to finance into their loan amount for limited repairs and upgrades, i.e. the buyer qualifies for $150,000 purchase, show home that are below $140,000 leaving room to finance $10,000 for home revisions. For every $1,000 the buyer adds to their loan amount, it only changes their monthly payment around $4.00. FHA 203(b) - Escrow holdbacks are used to facilitate loan closings for properties that require no more than $5000 of repairs to meet FHA s minimum property requirements. Purchaser(s) are permitted to include in their mortgage an amount equal to 110% of the estimated cost of the repairs. All repairs are to be completed by the purchaser within 90 days of closing.

93 FHA 203(k) Streamline - The Streamline (K) program permits homebuyers to finance up to $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. The buyer's lender will order an after repaired appraisal as through the work has been completed and allow 6 months to complete the project. The FHA 203K is available for a one-to-four unit property. FHA Energy Efficient - Under the FHA EEM Program, a borrower can finance into the mortgage 100 percent of the cost of eligible energy efficient improvements, subject to certain dollar limitations, without an appraisal of the energy improvements and without further credit qualification of the borrower. The total cost of the improvements (including maintenance costs) must be less than the total present value of the energy saved over the useful life of the improvements. The cost of any improvement to the property that will increase the property's energy efficiency and that is determined to be "cost effective" is eligible for financing into the mortgage and its cost may be added to the mortgage amount up to the greater of 5 percent of the property's value (not to exceed $8000) or $4000. Fannie Mae HomePath Renovation - Allows a buyer to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation - up to 35% of the as completed value, no more than $35,000. Down payment (at least 3 percent) can be funded by the buyer s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer and renovation amount is based on an appraisal as completed value. No mortgage insurance required. Available for primary residences, second homes, and investment properties. VA Energy Efficiency - Energy efficiency improvements up to $6,000 - The resulting increase in loan payments will normally be offset by a reduction in utility costs. VA Vendee Financing VA REO Property Only VA has re-opened Vendee Financing to purchasers of Vendee eligible VA REO Properties. Vendee financing is a loan product offered to veterans and non-veterans to help finance the purchase of VA REO Properties. Some of the Guidelines are Listed Below Seller may contribute up to six percent of the contract sales price to pay for funding fee, closing cost, prepaid and other expenses Vendee mortgages are assumable by qualification Vendee financing requires a 620 credit score Available terms of 15, 20, 25 and 30 year fix rate Interest rates are determined by the VA Mortgage insurance is not required Tax service fee, appraisal fee, flood certification or prepayment penalty are not required Owner Occupied Purchase Amount financed with as little as 0% down The loan amount may be increased up to 2% to finance closing costs, pre-paids or other expenses The funding fee may not be financed Non-owner Occupied Purchaser (Investor) Amount financed as little as 5% down

94 Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment Investors must have experience managing rental properties to include anticipated rent on subject property in underwriting No maximum number of investment properties VA Loan Limits VA does not impose a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan; however loan limits establish the maximum possible guaranty on a loan. The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2012 VA limit. A veteran with full entitlement available may borrow up to the limit shown below and VA will guarantee 25 percent of the loan amount. If a veteran has previously used entitlement that has not been restored, the maximum guaranty amount available to that veteran is reduced accordingly. Most states the VA loan limit is $417,000. VA loan limits in some counties in the following states, i.e. AK, CA, CO, DC, CT, GU, HI, ID, MA, MD, NJ, NY, PA, UT, VA and VI will range from $419,750 to $625,500. Down Payment Assistance, Gift and Grant Programs Home prices have dropped, and mortgage rates are low. For anyone with the tens of thousands of dollars now required for a down payment, it's a pretty good time to buy a house. Now, it's even getting easier without that hefty down payment, as governments step in to help out. A growing number of state and local governments are now offering what are called "down payment assistance programs," grants or low- and no-interest loans to firsttime buyers or those who haven't owned a house in a few years. The number of programs, now somewhere around 1,000 nationally, has increased 3% to 5% in the last six months alone. Sellers are not allowed to give homebuyers down payment funds. That's where down payment assistance, gift and grant programs step in. Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to achieve homeownership. By using down payment assistance, a seller can market a home to a much larger group of prospective buyers. Millions of people want to buy homes, have the income and credit to qualify for loans, but do not have the funds necessary for the down payment and closing costs. Down payment assistance bridges this gap. Property Standards HQS Inspection A Housing Quality Standard Inspection (HQS) must be performed on all eligible properties and are property standards that have been approved by the U.S. Department of Housing and Urban Development to insure that all properties are decent, safe, and sanitary. The Lender is responsible for contacting the HQS Inspector The HQS Inspection is ordered in advance of an appraisal The HQS Inspection report and fully executed sales contract must be provided to the FHA or VA appraiser prior to inspecting the property.

95 Property Repairs and Final Inspection Repairs noted on the appraisal and HQS inspection deficiencies must be corrected. Inspection room by room. Interior - walls, ceilings, floors, doors, windows, electrical outlets, stove, refrigerator, sinks, showers, tubs, toilets, smoke detectors, stairs etc. Utilities - plumbing, heating, AC, electrical, water supply, water heater, must be in working order at time of inspection. Exterior - lead paint on homes built prior to 1978, steps and handrails, patio, porches, roof, gutters, sewer, septic tank, well, chimney. Other - electrical hazards, site and neighborhood conditions. The Approved Lender Will Be Responsible For Approving all contractors, their work plans and cost estimate Establishing a repair escrow account that is held at closing Monitoring repairs and payment of contractors Timeline to complete repairs will vary from lender to lender. I.e days after closing. FHA 203(k) Streamline allows 6 months to complete repairs Obtaining reports to document compliance with any down payment program Funds are released upon completion and final inspection Property Value Two appraisals may be required and must meet the fair market appraisal guidelines REO sellers order an appraisal prior to listing the property Negotiate in your offer for the property to qualify for the down payment assistance program Order a fair market value BPO or appraisal prior to submitting an offer Appraisal for loan processing will be ordered by the lender Value must be greater than or equal to the loan amount Verify the work plans and cost estimates for a buy and repair program is reasonable and accurate Georgia Dream Homeownership Program HOME (4663) The Georgia Dream Homeownership Program makes it possible for eligible homebuyers to own their own home with affordable first mortgage financing and down payment assistance. The Department of Community Affairs offers qualified homebuyers statewide who meet certain guidelines. In addition, homebuyers must have modest assets and meet the flexible credit underwriting criteria for the loan program they have selected. It is easy to qualify. Georgia Dream Loans are available to: First-time homebuyers If you purchase a home in one of the targeted census tract areas, the first time homebuyer rule does not apply Those who have not owned a home in the past three years Those who purchase a home in targeted areas

96 Those who have household incomes below the maximum referenced below Those who have liquid assets no more than $20,000 or 20% of the sales price (whichever is greater) Those who meet mortgage loan credit requirements The Georgia Dream Loan is a 30 year, fixed interest rate mortgage. Local lenders give credit approval for FHA, USDA-RD, VA or conventional uninsured mortgage loans. Not all lenders are approved to offer the Georgia Dream Loan. To locate an approved lender, visit the website below: If you purchase a home in the Atlanta Metropolitan Statistical area your total household income, based on the number of people living in the home can be no more than: One to two persons $71,000 Three or more persons $82,000 The sales price of the home cannot exceed $250,000 Area coverage includes: Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Newton, Paulding, Pickens, Pike, Rockdale, Spalding or Walton County If you purchase a home in a county not listed above, your total household income, based on the number of people living in the home can be no more than: One to two persons $61,000 Three or more persons $70,000 The sales price of the home cannot exceed $200,000 An Applicant is not considered to have had a prior ownership interest in a single family residence if: The Applicant did not hold title to the home but did receive the benefits of the mortgage interest deduction through the filing of a joint federal income tax return with a spouse The Applicant did not hold title to the home, but did receive all or a portion of the proceeds of the sale of the residence The Applicant continued to hold title following a divorce which granted property to other spouse, but the Applicant has not used the property as a principal residence in the last three (3) years The residence is or was a manufactured home whose structure is not permanently affixed to a permanent foundation in accordance with local codes and taxed as personal property (subject to ad valorem taxes). If the manufactured home was or is taxed as real property, then the Applicant is considered to be a prior homeowner Applicants may own vacant land or a manufactured home taxed as personal property at the time they close on their Loan Co-Signers are Allowed Under the Following Guidelines Co-signers cannot take title to the property or live in the property securing our Loan. (Co-signers who live in the mortgaged property are considered co-applicants.) Co-signers must sign the Note. Co-signers may not sign the Security Deed or DCA forms nor may they hold title to the property.

97 The co-signers' income is not included in the Household Annual Income but may be used as qualifying income Co-signers credit and ratios must meet the underwriting requirements Annual Household Income Household Annual Income is defined as all amounts, which go to, or are provided on behalf of, the Applicant(s) or spouse (even if temporarily absent), or any household member who will occupy the subject property within the 12-month period immediately following loan closing. Household Annual Income is determined by ascertaining the income received from each source over the most recent representative period and projecting those amounts over a one (1) year period. Household members Include The Applicant, co-applicant, spouse (unless it can be shown that a spouse resides elsewhere), parents, and children who live with the applicant and co-applicant at least six (6) months of each year Any related or un-related person who will reside in the mortgaged property during the 12-month period immediately following closing, regardless of previous address Any person who has resided with the Applicant and/or co-applicant prior to closing and whose financial affairs are combined with the Applicant s and/or the co-applicant s according to the documents in the Underwriting Package. If such person will not occupy the mortgaged property, his or her income can be excluded from Household Annual Income only if the Underwriting Package contains an explanation from the Applicant(s) as to the person s future residence plans Household members does not include: foster children; live-in aides and children of live-in aides; unborn children; and children being pursued for legal custody or adoption who are not currently living with the household Non-Applicant adults (18 years of age or older) who are also full time high school or college students must provide evidence of enrollment from the high school or college at the time of application Eligible Properties - Georgia Dream Homeownership Program Loans must be secured by property which: Is located in the state of Georgia The title is held by the mortgagor at the time of closing as fee simple or under an eligible leasehold interest (the terms of the ground lease must extend beyond the maturity date of the Loan and only the land may be under a ground lease; the improvements must be owned by the mortgagor) Is a one (1) unit single family dwelling (attached or detached) designed for residential use, condominiums or planned unit developments approved by Fannie Mae, Freddie Mac or the Mortgage Insurer, townhomes and modular homes that are located in an area consistent with such use and intended for owner occupancy Is eligible for insurance through the Mortgage Insurer Other Requirements If the home is served by a well as its water source, DCA requires that a local or county health inspector test and certify to the safety and adequacy o the water source. Report must be dated within 30 days prior to closing. If the home is served by a septic tank, a test by a licensed plumbing contractor or local government health or building inspector will be required. Clear termite letters are required

98 Lenders must provide a copy of clear plumbing, electrical, and heating certifications if the appraiser indicated that the property was vacant and/or the systems were not operational at the time of the appraisal inspection Down Payment Assistance for Georgia Dram First Mortgage Loan Buyers who qualify for the Georgia Dream First Mortgage also qualify for down payment assistance. The buyer must: Use the loan in conjunction with a Georgia Dream First Mortgage Loan Complete a Homebuyer Education class and provide a certificate of completion Contribute a minimum of $1,000 to the purchase transaction Down Payment Loan Options STANDARD All eligible homebuyers qualify for $5,000 PEN (Protectors, Educators, Nurses), includes all employees of state licensed health care facilities Homebuyers who are employed in qualified public protection, military, health care or education qualify for $7,500 CHOICE (Consumer Home Ownership and Independence Choices for Everyone) Homebuyers whose household includes an individual living with a disability qualify for $7,500. Co-Op Homebuyers who are employed by local governments in participating Co-Op communities qualify for $7,500 Single Family Development Homebuyers who are purchasing homes in this special DCA Development qualify for up to $20,000 Down payment funds are provided as a Second Mortgage Loan for the purpose of principal reduction and the payment of pre-paid items and closing cost. Additional loan description: No monthly payments No interest Loan must be repaid when the home is sold or refinanced or no longer used as the buyer s person residence Resources Personalized Flyers - Homebuyer Education Agencies -

99 UDSA - United States Department of Agriculture Rural Development Rural Development Loan Assistance UDSA loans are government insured mortgages that are offered to purchase a home in rural areas with no down payment and low monthly mortgage insurance. Program assistance is provided in many ways, including direct or guaranteed loans, grants, technical assistance, research and educational materials. Currently, there are two kinds of USDA rural development loans available for single family households: USDA Guaranteed Rural Housing Loans USDA Guaranteed Loans are the most common type of USDA rural development loan and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate. USDA Direct Rural Housing Loans USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain home ownership. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Families must be without adequate housing, but be able to afford the mortgage payments including taxes and insurance, which are typically 24 percent of an applicant s income. However, payment subsidy is available to applicants to enhance repayment ability. Loans are for up to 33 years and the term for manufactured homes is 30 years. Other UDSA Loan Factors Owner occupied purchase At least a 620 FICO credit score Standard debt-to-income ratios are 29/41 - Housing ratio is 29% of your gross monthly income and 41% of your gross monthly income for total debt There are income limitations Maximum loan amount will be 102% of the appraised value of the home (100% plus the 2% USDA loan guarantee fee) USDA loans allow for the closing cost to be included in the loan amount (appraisal permitting) A bankruptcy Chapter 7 must have been discharged for three years or more A Chapter 13 When all court approved payments have been made on time as agreed for at least one year Rural Repair and Rehabilitation Loans and Grants - The Very Low-Income Housing Repair program provides loans and grants to very low-income homeowners to repair, improve, or modernize their dwellings or to remove health and safety hazards.

100 Eligibility - To obtain a loan, homeowner-occupants must be unable to obtain affordable credit elsewhere and must have very low incomes, defined as below 50 percent of the area median income. They must need to make repairs and improvements to make the dwelling more safe and sanitary or to remove health and safety hazards. Grants are only available to homeowners who are 62 years old or older and cannot repay a Section 504 loan. Mutual Self-Help Loans - The Section 502 Mutual Self-Help Housing Loan program is used primarily to help very low- and low-income households construct their own homes. The program is targeted to families who are unable to buy clean, safe housing through conventional methods. Families participating in a mutual self-help project perform approximately 65 percent of the construction labor on each other's homes under qualified supervision. The savings from the reduction in labor costs allows otherwise ineligible families to own their homes. If families cannot meet their mortgage payments during the construction phase, the funds for these payments can be included in the loan. Resources Property Eligibility Site - Income Eligibility Site - come@11 Various Conditions to Down Payment Assistance Georgia has many down payment assistance programs. Nothing is standard in qualifying and loan processing. Keep in mind: Funds are available on a first come, first serve basis May require the buyer to be a first time homebuyer, meaning that they have not owned a home within the last three years You may or may not be able to add and layer other programs together Not all lenders participate in down payment assistance programs Only certain areas of the state may qualify, i.e. rural areas Each city and county has their own programs limited to specific areas Purchase price limitation Income limitations - Entire household income Credit score limitations May require more than one appraisal Reserve requirements and or limits after closing The down payment assistance usually is provided in the form of a second lien placed against the qualifying property for a set period of time May require a home buying housing certificate Lender underwriting and down payment program sponsor underwriting Takes longer to close the transaction - Allow 60 day closings

101 Fair Housing Discrimination Complaints Fair Housing Law Housing discrimination based on your race, color, national origin, religion, sex, family status, or disability is illegal by federal law. If you have been trying to buy or rent a home or apartment and you believe your rights have been violated, you can file a fair housing complaint. The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members. What Is Prohibited In the Sale and Rental of Housing? No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap: Refuse to rent or sell housing Refuse to negotiate for housing Make housing unavailable Deny a dwelling Set different terms, conditions or privileges for sale or rental of a dwelling. Provide different housing services or facilities Falsely deny that housing is available for inspection, sale, or rental For profit, persuade owners to sell or rent (blockbusting) Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing In Addition: It is illegal for anyone to: Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act In Mortgage Lending No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability): Refuse to make a mortgage loan Refuse to provide information regarding loans Impose different terms or conditions on a loan, such as different interest rates, points, or fees Discriminate in appraising property Refuse to purchase a loan

102 Set different terms or conditions for purchasing a loan Fair Housing Penalties Civil penalties of up to $10,000 for the first offense, up to $25,000 for the second offense within a five-year period, and up to $50,000 for the third offense within a seven-year period Monetary fines for actual and/or punitive damages caused by the discrimination An injunction to stop the sale or rental of the property to someone else, making it available to the complainant Court costs Criminal penalties against those who coerce, intimidate, threaten, or interfere with a person s buying, renting, or selling of housing State penalties, including the loss of the real estate license Fraud is a reality. Get informed. Be prepared. Mortgage fraud schemes employ some type of material misstatement, misrepresentation, or omission relating to the property or potential borrower which is relied on by an underwriter or lender to fund, purchase, or insure a loan. These misstatements, misrepresentations, or omissions are indicative of mortgage fraud and include the following: Inflated Appraisals Fictitious/Stolen Identities Nominee/Straw Buyers False Loan Application Fraudulent Supporting Loan Documentation Kickbacks Although there are many different types of schemes, mortgage fraud can be summarized as a form of bank robbery where the bank is not even aware it has been robbed until months or years later. One benchmark illustrating this point is the Financial Crimes Enforcement Network s Mortgage Loan Fraud Update, which reveals an 88% uptick in U.S. mortgage fraud cases in the second quarter of 2011 from the same period a year ago. Report Mortgage Fraud, Mortgage Scams and Predatory Lending The Federal Bureau of Investigation (FBI) (202) National FBI Financial Institution Fraud Unit The Federal Trade Commission (FTC) and and To file complaint (877) Identity Theft Clearinghouse (877) Consumer Response Center To report fraud or register a complaint about a national bank, contact Office of the Comptroller of the Currency (OCC) Comptroller of the Currency (800)

103 To report fraud or register a complaint about a federal savings and loan association, contact: Office of Thrift Supervision (OTS) Consumer Affairs consumer.complaint@ots.treas.gov (202) (800) for consumer complaints National Credit Union Association (NCUA) Phone: (512) State Chartered Credit Unions The National Association of Attorneys General Phone: (202) National Fraud Information Center The National Fraud Information Center is a project of the National Consumers League. It focuses mainly on fraud against the elderly, and internet and telemarketing fraud all sources of mortgage fraud and mortgage scams. Center for Responsible Lending (919) U.S. Dept. of Housing and Urban Development (HUD) Office of Consumer and Regulatory Affairs Director, Interstate land Sales/RESPA Division (202) National Hotline: (800) Equifax For Fraud Alerts: P.O. Box Atlanta, GA (800) Experian For Fraud Alerts: P.O. Box 9530 Allen TX Phone: (888) Trans Union For Fraud Alerts: Phone: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634

104 Sponsor Today: Cathy McDaniel American Real Estate University Cell

105 Free Money Financing Your Dream Home in Today's Market Though the current economic climate presents some challenges, the time to buy a home is now. Interest rates are low, money is available and sellers are willing to roll out the red carpet to entice a buyer to buy their home. Tips for Homebuyers All homebuyers must convince the lender that they deserve financing today and will keep up their end of the deal in making all their future payments on time. All mortgage loans today are full qualifying. We have more stringent lending practices then every before. Keep in mind when you are applying for a mortgage loan, an approval is based on the level of risk of the borrower and property. If you are a high risk buyer or business owner you aren t going to get an approval. If you lower your risk by being in compliance with the lending markets, having a good credit profile, a good personal credit score, good trade references, money in the bank you improve your chances of an approval. If you don t have all of those things to lower your risk, don t wait. Start now to improve your standing as a low risk borrower so as the credit markets loosen, and they will in due time, you are ready to take advantage of the programs that will be made available. If the property condition is poor, it will not qualify for financing. However, financing is available to purchase the home in its current condition, finance the repairs into the loan and have the repairs completed after closing. Lending Options for Repairs Researching your MLS for appropriate properties for you buyer, keep in mind today, not to max out their buying power in the front end. Leave room for the buyer to select a home that needs some TLC and be able to finance into their loan amount for limited repairs and upgrades, i.e. the buyer qualifies for $150,000 purchase, show home that are below $140,000 leaving room to finance $10,000 for home revisions. For every $1,000 the buyer adds to their loan amount, it only changes their monthly payment around $4.00. FHA 203(b) - Escrow holdbacks are used to facilitate loan closings for properties that require no more than $5000 of repairs to meet FHA s minimum property requirements. Purchaser(s) are permitted to include in their mortgage an amount equal to 110% of the estimated cost of the repairs. All repairs are to be completed by the purchaser within 90 days of closing.

106 FHA 203(k) Streamline - The Streamline (K) program permits homebuyers to finance up to $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. The buyer's lender will order an after repaired appraisal as through the work has been completed and allow 6 months to complete the project. The FHA 203K is available for a one-to-four unit property. FHA Energy Efficient - Under the FHA EEM Program, a borrower can finance into the mortgage 100 percent of the cost of eligible energy efficient improvements, subject to certain dollar limitations, without an appraisal of the energy improvements and without further credit qualification of the borrower. The total cost of the improvements (including maintenance costs) must be less than the total present value of the energy saved over the useful life of the improvements. The cost of any improvement to the property that will increase the property's energy efficiency and that is determined to be "cost effective" is eligible for financing into the mortgage and its cost may be added to the mortgage amount up to the greater of 5 percent of the property's value (not to exceed $8000) or $4000. Fannie Mae HomePath Renovation - Allows a buyer to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation - up to 35% of the as completed value, no more than $35,000. Down payment (at least 3 percent) can be funded by the buyer s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer and renovation amount is based on an appraisal as completed value. No mortgage insurance required. Available for primary residences, second homes, and investment properties. VA Energy Efficiency - Energy efficiency improvements up to $6,000 - The resulting increase in loan payments will normally be offset by a reduction in utility costs. VA Vendee Financing VA REO Property Only VA has re-opened Vendee Financing to purchasers of Vendee eligible VA REO Properties. Vendee financing is a loan product offered to veterans and non-veterans to help finance the purchase of VA REO Properties. Some of the Guidelines are Listed Below Seller may contribute up to six percent of the contract sales price to pay for funding fee, closing cost, prepaid and other expenses Vendee mortgages are assumable by qualification Vendee financing requires a 620 credit score Available terms of 15, 20, 25 and 30 year fix rate Interest rates are determined by the VA Mortgage insurance is not required Tax service fee, appraisal fee, flood certification or prepayment penalty are not required Owner Occupied Purchase Amount financed with as little as 0% down The loan amount may be increased up to 2% to finance closing costs, pre-paids or other expenses The funding fee may not be financed Non-owner Occupied Purchaser (Investor) Amount financed as little as 5% down

107 Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment Investors must have experience managing rental properties to include anticipated rent on subject property in underwriting No maximum number of investment properties VA Loan Limits VA does not impose a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan; however loan limits establish the maximum possible guaranty on a loan. The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2012 VA limit. A veteran with full entitlement available may borrow up to the limit shown below and VA will guarantee 25 percent of the loan amount. If a veteran has previously used entitlement that has not been restored, the maximum guaranty amount available to that veteran is reduced accordingly. Most states the VA loan limit is $417,000. VA loan limits in some counties in the following states, i.e. AK, CA, CO, DC, CT, GU, HI, ID, MA, MD, NJ, NY, PA, UT, VA and VI will range from $419,750 to $625,500. Down Payment Assistance, Gift and Grant Programs Home prices have dropped, and mortgage rates are low. For anyone with the tens of thousands of dollars now required for a down payment, it's a pretty good time to buy a house. Now, it's even getting easier without that hefty down payment, as governments step in to help out. A growing number of state and local governments are now offering what are called "down payment assistance programs," grants or low- and no-interest loans to firsttime buyers or those who haven't owned a house in a few years. The number of programs, now somewhere around 1,000 nationally, has increased 3% to 5% in the last six months alone. Sellers are not allowed to give homebuyers down payment funds. That's where down payment assistance, gift and grant programs step in. Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to achieve homeownership. By using down payment assistance, a seller can market a home to a much larger group of prospective buyers. Millions of people want to buy homes, have the income and credit to qualify for loans, but do not have the funds necessary for the down payment and closing costs. Down payment assistance bridges this gap. Property Standards HQS Inspection A Housing Quality Standard Inspection (HQS) must be performed on all eligible properties and are property standards that have been approved by the U.S. Department of Housing and Urban Development to insure that all properties are decent, safe, and sanitary. The Lender is responsible for contacting the HQS Inspector The HQS Inspection is ordered in advance of an appraisal The HQS Inspection report and fully executed sales contract must be provided to the FHA or VA appraiser prior to inspecting the property.

108 Property Repairs and Final Inspection Repairs noted on the appraisal and HQS inspection deficiencies must be corrected. Inspection room by room. Interior - walls, ceilings, floors, doors, windows, electrical outlets, stove, refrigerator, sinks, showers, tubs, toilets, smoke detectors, stairs etc. Utilities - plumbing, heating, AC, electrical, water supply, water heater, must be in working order at time of inspection. Exterior - lead paint on homes built prior to 1978, steps and handrails, patio, porches, roof, gutters, sewer, septic tank, well, chimney. Other - electrical hazards, site and neighborhood conditions. The Approved Lender Will Be Responsible For Approving all contractors, their work plans and cost estimate Establishing a repair escrow account that is held at closing Monitoring repairs and payment of contractors Timeline to complete repairs will vary from lender to lender. I.e days after closing. FHA 203(k) Streamline allows 6 months to complete repairs Obtaining reports to document compliance with any down payment program Funds are released upon completion and final inspection Property Value Two appraisals may be required and must meet the fair market appraisal guidelines REO sellers order an appraisal prior to listing the property Negotiate in your offer for the property to qualify for the down payment assistance program Order a fair market value BPO or appraisal prior to submitting an offer Appraisal for loan processing will be ordered by the lender Value must be greater than or equal to the loan amount Verify the work plans and cost estimates for a buy and repair program is reasonable and accurate Georgia Dream Homeownership Program HOME (4663) The Georgia Dream Homeownership Program makes it possible for eligible homebuyers to own their own home with affordable first mortgage financing and down payment assistance. The Department of Community Affairs offers qualified homebuyers statewide who meet certain guidelines. In addition, homebuyers must have modest assets and meet the flexible credit underwriting criteria for the loan program they have selected. It is easy to qualify. Georgia Dream Loans are available to: First-time homebuyers If you purchase a home in one of the targeted census tract areas, the first time homebuyer rule does not apply Those who have not owned a home in the past three years Those who purchase a home in targeted areas

109 Those who have household incomes below the maximum referenced below Those who have liquid assets no more than $20,000 or 20% of the sales price (whichever is greater) Those who meet mortgage loan credit requirements The Georgia Dream Loan is a 30 year, fixed interest rate mortgage. Local lenders give credit approval for FHA, USDA-RD, VA or conventional uninsured mortgage loans. Not all lenders are approved to offer the Georgia Dream Loan. To locate an approved lender, visit the website below: If you purchase a home in the Atlanta Metropolitan Statistical area your total household income, based on the number of people living in the home can be no more than: One to two persons $71,000 Three or more persons $82,000 The sales price of the home cannot exceed $250,000 Area coverage includes: Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Newton, Paulding, Pickens, Pike, Rockdale, Spalding or Walton County If you purchase a home in a county not listed above, your total household income, based on the number of people living in the home can be no more than: One to two persons $61,000 Three or more persons $70,000 The sales price of the home cannot exceed $200,000 An Applicant is not considered to have had a prior ownership interest in a single family residence if: The Applicant did not hold title to the home but did receive the benefits of the mortgage interest deduction through the filing of a joint federal income tax return with a spouse The Applicant did not hold title to the home, but did receive all or a portion of the proceeds of the sale of the residence The Applicant continued to hold title following a divorce which granted property to other spouse, but the Applicant has not used the property as a principal residence in the last three (3) years The residence is or was a manufactured home whose structure is not permanently affixed to a permanent foundation in accordance with local codes and taxed as personal property (subject to ad valorem taxes). If the manufactured home was or is taxed as real property, then the Applicant is considered to be a prior homeowner Applicants may own vacant land or a manufactured home taxed as personal property at the time they close on their Loan Co-Signers are Allowed Under the Following Guidelines Co-signers cannot take title to the property or live in the property securing our Loan. (Co-signers who live in the mortgaged property are considered co-applicants.) Co-signers must sign the Note. Co-signers may not sign the Security Deed or DCA forms nor may they hold title to the property.

110 The co-signers' income is not included in the Household Annual Income but may be used as qualifying income Co-signers credit and ratios must meet the underwriting requirements Annual Household Income Household Annual Income is defined as all amounts, which go to, or are provided on behalf of, the Applicant(s) or spouse (even if temporarily absent), or any household member who will occupy the subject property within the 12-month period immediately following loan closing. Household Annual Income is determined by ascertaining the income received from each source over the most recent representative period and projecting those amounts over a one (1) year period. Household members Include The Applicant, co-applicant, spouse (unless it can be shown that a spouse resides elsewhere), parents, and children who live with the applicant and co-applicant at least six (6) months of each year Any related or un-related person who will reside in the mortgaged property during the 12-month period immediately following closing, regardless of previous address Any person who has resided with the Applicant and/or co-applicant prior to closing and whose financial affairs are combined with the Applicant s and/or the co-applicant s according to the documents in the Underwriting Package. If such person will not occupy the mortgaged property, his or her income can be excluded from Household Annual Income only if the Underwriting Package contains an explanation from the Applicant(s) as to the person s future residence plans Household members does not include: foster children; live-in aides and children of live-in aides; unborn children; and children being pursued for legal custody or adoption who are not currently living with the household Non-Applicant adults (18 years of age or older) who are also full time high school or college students must provide evidence of enrollment from the high school or college at the time of application Eligible Properties - Georgia Dream Homeownership Program Loans must be secured by property which: Is located in the state of Georgia The title is held by the mortgagor at the time of closing as fee simple or under an eligible leasehold interest (the terms of the ground lease must extend beyond the maturity date of the Loan and only the land may be under a ground lease; the improvements must be owned by the mortgagor) Is a one (1) unit single family dwelling (attached or detached) designed for residential use, condominiums or planned unit developments approved by Fannie Mae, Freddie Mac or the Mortgage Insurer, townhomes and modular homes that are located in an area consistent with such use and intended for owner occupancy Is eligible for insurance through the Mortgage Insurer Other Requirements If the home is served by a well as its water source, DCA requires that a local or county health inspector test and certify to the safety and adequacy o the water source. Report must be dated within 30 days prior to closing. If the home is served by a septic tank, a test by a licensed plumbing contractor or local government health or building inspector will be required. Clear termite letters are required

111 Lenders must provide a copy of clear plumbing, electrical, and heating certifications if the appraiser indicated that the property was vacant and/or the systems were not operational at the time of the appraisal inspection Down Payment Assistance for Georgia Dram First Mortgage Loan Buyers who qualify for the Georgia Dream First Mortgage also qualify for down payment assistance. The buyer must: Use the loan in conjunction with a Georgia Dream First Mortgage Loan Complete a Homebuyer Education class and provide a certificate of completion Contribute a minimum of $1,000 to the purchase transaction Down Payment Loan Options STANDARD All eligible homebuyers qualify for $5,000 PEN (Protectors, Educators, Nurses), includes all employees of state licensed health care facilities Homebuyers who are employed in qualified public protection, military, health care or education qualify for $7,500 CHOICE (Consumer Home Ownership and Independence Choices for Everyone) Homebuyers whose household includes an individual living with a disability qualify for $7,500. Co-Op Homebuyers who are employed by local governments in participating Co-Op communities qualify for $7,500 Single Family Development Homebuyers who are purchasing homes in this special DCA Development qualify for up to $20,000 Down payment funds are provided as a Second Mortgage Loan for the purpose of principal reduction and the payment of pre-paid items and closing cost. Additional loan description: No monthly payments No interest Loan must be repaid when the home is sold or refinanced or no longer used as the buyer s person residence Resources Personalized Flyers - Homebuyer Education Agencies -

112 UDSA - United States Department of Agriculture Rural Development Rural Development Loan Assistance UDSA loans are government insured mortgages that are offered to purchase a home in rural areas with no down payment and low monthly mortgage insurance. Program assistance is provided in many ways, including direct or guaranteed loans, grants, technical assistance, research and educational materials. Currently, there are two kinds of USDA rural development loans available for single family households: USDA Guaranteed Rural Housing Loans USDA Guaranteed Loans are the most common type of USDA rural development loan and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate. USDA Direct Rural Housing Loans USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain home ownership. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Families must be without adequate housing, but be able to afford the mortgage payments including taxes and insurance, which are typically 24 percent of an applicant s income. However, payment subsidy is available to applicants to enhance repayment ability. Loans are for up to 33 years and the term for manufactured homes is 30 years. Other UDSA Loan Factors Owner occupied purchase At least a 620 FICO credit score Standard debt-to-income ratios are 29/41 - Housing ratio is 29% of your gross monthly income and 41% of your gross monthly income for total debt There are income limitations Maximum loan amount will be 102% of the appraised value of the home (100% plus the 2% USDA loan guarantee fee) USDA loans allow for the closing cost to be included in the loan amount (appraisal permitting) A bankruptcy Chapter 7 must have been discharged for three years or more A Chapter 13 When all court approved payments have been made on time as agreed for at least one year Rural Repair and Rehabilitation Loans and Grants - The Very Low-Income Housing Repair program provides loans and grants to very low-income homeowners to repair, improve, or modernize their dwellings or to remove health and safety hazards.

113 Eligibility - To obtain a loan, homeowner-occupants must be unable to obtain affordable credit elsewhere and must have very low incomes, defined as below 50 percent of the area median income. They must need to make repairs and improvements to make the dwelling more safe and sanitary or to remove health and safety hazards. Grants are only available to homeowners who are 62 years old or older and cannot repay a Section 504 loan. Mutual Self-Help Loans - The Section 502 Mutual Self-Help Housing Loan program is used primarily to help very low- and low-income households construct their own homes. The program is targeted to families who are unable to buy clean, safe housing through conventional methods. Families participating in a mutual self-help project perform approximately 65 percent of the construction labor on each other's homes under qualified supervision. The savings from the reduction in labor costs allows otherwise ineligible families to own their homes. If families cannot meet their mortgage payments during the construction phase, the funds for these payments can be included in the loan. Resources Property Eligibility Site - Income Eligibility Site - come@11 Various Conditions to Down Payment Assistance Georgia has many down payment assistance programs. Nothing is standard in qualifying and loan processing. Keep in mind: Funds are available on a first come, first serve basis May require the buyer to be a first time homebuyer, meaning that they have not owned a home within the last three years You may or may not be able to add and layer other programs together Not all lenders participate in down payment assistance programs Only certain areas of the state may qualify, i.e. rural areas Each city and county has their own programs limited to specific areas Purchase price limitation Income limitations - Entire household income Credit score limitations May require more than one appraisal Reserve requirements and or limits after closing The down payment assistance usually is provided in the form of a second lien placed against the qualifying property for a set period of time May require a home buying housing certificate Lender underwriting and down payment program sponsor underwriting Takes longer to close the transaction - Allow 60 day closings

114 Fair Housing Discrimination Complaints Fair Housing Law Housing discrimination based on your race, color, national origin, religion, sex, family status, or disability is illegal by federal law. If you have been trying to buy or rent a home or apartment and you believe your rights have been violated, you can file a fair housing complaint. The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members. What Is Prohibited In the Sale and Rental of Housing? No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap: Refuse to rent or sell housing Refuse to negotiate for housing Make housing unavailable Deny a dwelling Set different terms, conditions or privileges for sale or rental of a dwelling. Provide different housing services or facilities Falsely deny that housing is available for inspection, sale, or rental For profit, persuade owners to sell or rent (blockbusting) Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing In Addition: It is illegal for anyone to: Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act In Mortgage Lending No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability): Refuse to make a mortgage loan Refuse to provide information regarding loans Impose different terms or conditions on a loan, such as different interest rates, points, or fees Discriminate in appraising property Refuse to purchase a loan

115 Set different terms or conditions for purchasing a loan Fair Housing Penalties Civil penalties of up to $10,000 for the first offense, up to $25,000 for the second offense within a five-year period, and up to $50,000 for the third offense within a seven-year period Monetary fines for actual and/or punitive damages caused by the discrimination An injunction to stop the sale or rental of the property to someone else, making it available to the complainant Court costs Criminal penalties against those who coerce, intimidate, threaten, or interfere with a person s buying, renting, or selling of housing State penalties, including the loss of the real estate license Fraud is a reality. Get informed. Be prepared. Mortgage fraud schemes employ some type of material misstatement, misrepresentation, or omission relating to the property or potential borrower which is relied on by an underwriter or lender to fund, purchase, or insure a loan. These misstatements, misrepresentations, or omissions are indicative of mortgage fraud and include the following: Inflated Appraisals Fictitious/Stolen Identities Nominee/Straw Buyers False Loan Application Fraudulent Supporting Loan Documentation Kickbacks Although there are many different types of schemes, mortgage fraud can be summarized as a form of bank robbery where the bank is not even aware it has been robbed until months or years later. One benchmark illustrating this point is the Financial Crimes Enforcement Network s Mortgage Loan Fraud Update, which reveals an 88% uptick in U.S. mortgage fraud cases in the second quarter of 2011 from the same period a year ago. Report Mortgage Fraud, Mortgage Scams and Predatory Lending The Federal Bureau of Investigation (FBI) (202) National FBI Financial Institution Fraud Unit The Federal Trade Commission (FTC) and and To file complaint (877) Identity Theft Clearinghouse (877) Consumer Response Center To report fraud or register a complaint about a national bank, contact Office of the Comptroller of the Currency (OCC) Comptroller of the Currency (800)

116 To report fraud or register a complaint about a federal savings and loan association, contact: Office of Thrift Supervision (OTS) Consumer Affairs consumer.complaint@ots.treas.gov (202) (800) for consumer complaints National Credit Union Association (NCUA) Phone: (512) State Chartered Credit Unions The National Association of Attorneys General Phone: (202) National Fraud Information Center The National Fraud Information Center is a project of the National Consumers League. It focuses mainly on fraud against the elderly, and internet and telemarketing fraud all sources of mortgage fraud and mortgage scams. Center for Responsible Lending (919) U.S. Dept. of Housing and Urban Development (HUD) Office of Consumer and Regulatory Affairs Director, Interstate land Sales/RESPA Division (202) National Hotline: (800) Equifax For Fraud Alerts: P.O. Box Atlanta, GA (800) Experian For Fraud Alerts: P.O. Box 9530 Allen TX Phone: (888) Trans Union For Fraud Alerts: Phone: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634

117 Sponsor Today: Cathy McDaniel American Real Estate University Cell

118 Free Money Financing Your Dream Home in Today's Market Though the current economic climate presents some challenges, the time to buy a home is now. Interest rates are low, money is available and sellers are willing to roll out the red carpet to entice a buyer to buy their home. Tips for Homebuyers All homebuyers must convince the lender that they deserve financing today and will keep up their end of the deal in making all their future payments on time. All mortgage loans today are full qualifying. We have more stringent lending practices then every before. Keep in mind when you are applying for a mortgage loan, an approval is based on the level of risk of the borrower and property. If you are a high risk buyer or business owner you aren t going to get an approval. If you lower your risk by being in compliance with the lending markets, having a good credit profile, a good personal credit score, good trade references, money in the bank you improve your chances of an approval. If you don t have all of those things to lower your risk, don t wait. Start now to improve your standing as a low risk borrower so as the credit markets loosen, and they will in due time, you are ready to take advantage of the programs that will be made available. If the property condition is poor, it will not qualify for financing. However, financing is available to purchase the home in its current condition, finance the repairs into the loan and have the repairs completed after closing. Lending Options for Repairs Researching your MLS for appropriate properties for you buyer, keep in mind today, not to max out their buying power in the front end. Leave room for the buyer to select a home that needs some TLC and be able to finance into their loan amount for limited repairs and upgrades, i.e. the buyer qualifies for $150,000 purchase, show home that are below $140,000 leaving room to finance $10,000 for home revisions. For every $1,000 the buyer adds to their loan amount, it only changes their monthly payment around $4.00. FHA 203(b) - Escrow holdbacks are used to facilitate loan closings for properties that require no more than $5000 of repairs to meet FHA s minimum property requirements. Purchaser(s) are permitted to include in their mortgage an amount equal to 110% of the estimated cost of the repairs. All repairs are to be completed by the purchaser within 90 days of closing.

119 FHA 203(k) Streamline - The Streamline (K) program permits homebuyers to finance up to $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. The buyer's lender will order an after repaired appraisal as through the work has been completed and allow 6 months to complete the project. The FHA 203K is available for a one-to-four unit property. FHA Energy Efficient - Under the FHA EEM Program, a borrower can finance into the mortgage 100 percent of the cost of eligible energy efficient improvements, subject to certain dollar limitations, without an appraisal of the energy improvements and without further credit qualification of the borrower. The total cost of the improvements (including maintenance costs) must be less than the total present value of the energy saved over the useful life of the improvements. The cost of any improvement to the property that will increase the property's energy efficiency and that is determined to be "cost effective" is eligible for financing into the mortgage and its cost may be added to the mortgage amount up to the greater of 5 percent of the property's value (not to exceed $8000) or $4000. Fannie Mae HomePath Renovation - Allows a buyer to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation - up to 35% of the as completed value, no more than $35,000. Down payment (at least 3 percent) can be funded by the buyer s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer and renovation amount is based on an appraisal as completed value. No mortgage insurance required. Available for primary residences, second homes, and investment properties. VA Energy Efficiency - Energy efficiency improvements up to $6,000 - The resulting increase in loan payments will normally be offset by a reduction in utility costs. VA Vendee Financing VA REO Property Only VA has re-opened Vendee Financing to purchasers of Vendee eligible VA REO Properties. Vendee financing is a loan product offered to veterans and non-veterans to help finance the purchase of VA REO Properties. Some of the Guidelines are Listed Below Seller may contribute up to six percent of the contract sales price to pay for funding fee, closing cost, prepaid and other expenses Vendee mortgages are assumable by qualification Vendee financing requires a 620 credit score Available terms of 15, 20, 25 and 30 year fix rate Interest rates are determined by the VA Mortgage insurance is not required Tax service fee, appraisal fee, flood certification or prepayment penalty are not required Owner Occupied Purchase Amount financed with as little as 0% down The loan amount may be increased up to 2% to finance closing costs, pre-paids or other expenses The funding fee may not be financed Non-owner Occupied Purchaser (Investor) Amount financed as little as 5% down

120 Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment Investors must have experience managing rental properties to include anticipated rent on subject property in underwriting No maximum number of investment properties VA Loan Limits VA does not impose a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan; however loan limits establish the maximum possible guaranty on a loan. The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2012 VA limit. A veteran with full entitlement available may borrow up to the limit shown below and VA will guarantee 25 percent of the loan amount. If a veteran has previously used entitlement that has not been restored, the maximum guaranty amount available to that veteran is reduced accordingly. Most states the VA loan limit is $417,000. VA loan limits in some counties in the following states, i.e. AK, CA, CO, DC, CT, GU, HI, ID, MA, MD, NJ, NY, PA, UT, VA and VI will range from $419,750 to $625,500. Down Payment Assistance, Gift and Grant Programs Home prices have dropped, and mortgage rates are low. For anyone with the tens of thousands of dollars now required for a down payment, it's a pretty good time to buy a house. Now, it's even getting easier without that hefty down payment, as governments step in to help out. A growing number of state and local governments are now offering what are called "down payment assistance programs," grants or low- and no-interest loans to firsttime buyers or those who haven't owned a house in a few years. The number of programs, now somewhere around 1,000 nationally, has increased 3% to 5% in the last six months alone. Sellers are not allowed to give homebuyers down payment funds. That's where down payment assistance, gift and grant programs step in. Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to achieve homeownership. By using down payment assistance, a seller can market a home to a much larger group of prospective buyers. Millions of people want to buy homes, have the income and credit to qualify for loans, but do not have the funds necessary for the down payment and closing costs. Down payment assistance bridges this gap. Property Standards HQS Inspection A Housing Quality Standard Inspection (HQS) must be performed on all eligible properties and are property standards that have been approved by the U.S. Department of Housing and Urban Development to insure that all properties are decent, safe, and sanitary. The Lender is responsible for contacting the HQS Inspector The HQS Inspection is ordered in advance of an appraisal The HQS Inspection report and fully executed sales contract must be provided to the FHA or VA appraiser prior to inspecting the property.

121 Property Repairs and Final Inspection Repairs noted on the appraisal and HQS inspection deficiencies must be corrected. Inspection room by room. Interior - walls, ceilings, floors, doors, windows, electrical outlets, stove, refrigerator, sinks, showers, tubs, toilets, smoke detectors, stairs etc. Utilities - plumbing, heating, AC, electrical, water supply, water heater, must be in working order at time of inspection. Exterior - lead paint on homes built prior to 1978, steps and handrails, patio, porches, roof, gutters, sewer, septic tank, well, chimney. Other - electrical hazards, site and neighborhood conditions. The Approved Lender Will Be Responsible For Approving all contractors, their work plans and cost estimate Establishing a repair escrow account that is held at closing Monitoring repairs and payment of contractors Timeline to complete repairs will vary from lender to lender. I.e days after closing. FHA 203(k) Streamline allows 6 months to complete repairs Obtaining reports to document compliance with any down payment program Funds are released upon completion and final inspection Property Value Two appraisals may be required and must meet the fair market appraisal guidelines REO sellers order an appraisal prior to listing the property Negotiate in your offer for the property to qualify for the down payment assistance program Order a fair market value BPO or appraisal prior to submitting an offer Appraisal for loan processing will be ordered by the lender Value must be greater than or equal to the loan amount Verify the work plans and cost estimates for a buy and repair program is reasonable and accurate Georgia Dream Homeownership Program HOME (4663) The Georgia Dream Homeownership Program makes it possible for eligible homebuyers to own their own home with affordable first mortgage financing and down payment assistance. The Department of Community Affairs offers qualified homebuyers statewide who meet certain guidelines. In addition, homebuyers must have modest assets and meet the flexible credit underwriting criteria for the loan program they have selected. It is easy to qualify. Georgia Dream Loans are available to: First-time homebuyers If you purchase a home in one of the targeted census tract areas, the first time homebuyer rule does not apply Those who have not owned a home in the past three years Those who purchase a home in targeted areas

122 Those who have household incomes below the maximum referenced below Those who have liquid assets no more than $20,000 or 20% of the sales price (whichever is greater) Those who meet mortgage loan credit requirements The Georgia Dream Loan is a 30 year, fixed interest rate mortgage. Local lenders give credit approval for FHA, USDA-RD, VA or conventional uninsured mortgage loans. Not all lenders are approved to offer the Georgia Dream Loan. To locate an approved lender, visit the website below: If you purchase a home in the Atlanta Metropolitan Statistical area your total household income, based on the number of people living in the home can be no more than: One to two persons $71,000 Three or more persons $82,000 The sales price of the home cannot exceed $250,000 Area coverage includes: Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Newton, Paulding, Pickens, Pike, Rockdale, Spalding or Walton County If you purchase a home in a county not listed above, your total household income, based on the number of people living in the home can be no more than: One to two persons $61,000 Three or more persons $70,000 The sales price of the home cannot exceed $200,000 An Applicant is not considered to have had a prior ownership interest in a single family residence if: The Applicant did not hold title to the home but did receive the benefits of the mortgage interest deduction through the filing of a joint federal income tax return with a spouse The Applicant did not hold title to the home, but did receive all or a portion of the proceeds of the sale of the residence The Applicant continued to hold title following a divorce which granted property to other spouse, but the Applicant has not used the property as a principal residence in the last three (3) years The residence is or was a manufactured home whose structure is not permanently affixed to a permanent foundation in accordance with local codes and taxed as personal property (subject to ad valorem taxes). If the manufactured home was or is taxed as real property, then the Applicant is considered to be a prior homeowner Applicants may own vacant land or a manufactured home taxed as personal property at the time they close on their Loan Co-Signers are Allowed Under the Following Guidelines Co-signers cannot take title to the property or live in the property securing our Loan. (Co-signers who live in the mortgaged property are considered co-applicants.) Co-signers must sign the Note. Co-signers may not sign the Security Deed or DCA forms nor may they hold title to the property.

123 The co-signers' income is not included in the Household Annual Income but may be used as qualifying income Co-signers credit and ratios must meet the underwriting requirements Annual Household Income Household Annual Income is defined as all amounts, which go to, or are provided on behalf of, the Applicant(s) or spouse (even if temporarily absent), or any household member who will occupy the subject property within the 12-month period immediately following loan closing. Household Annual Income is determined by ascertaining the income received from each source over the most recent representative period and projecting those amounts over a one (1) year period. Household members Include The Applicant, co-applicant, spouse (unless it can be shown that a spouse resides elsewhere), parents, and children who live with the applicant and co-applicant at least six (6) months of each year Any related or un-related person who will reside in the mortgaged property during the 12-month period immediately following closing, regardless of previous address Any person who has resided with the Applicant and/or co-applicant prior to closing and whose financial affairs are combined with the Applicant s and/or the co-applicant s according to the documents in the Underwriting Package. If such person will not occupy the mortgaged property, his or her income can be excluded from Household Annual Income only if the Underwriting Package contains an explanation from the Applicant(s) as to the person s future residence plans Household members does not include: foster children; live-in aides and children of live-in aides; unborn children; and children being pursued for legal custody or adoption who are not currently living with the household Non-Applicant adults (18 years of age or older) who are also full time high school or college students must provide evidence of enrollment from the high school or college at the time of application Eligible Properties - Georgia Dream Homeownership Program Loans must be secured by property which: Is located in the state of Georgia The title is held by the mortgagor at the time of closing as fee simple or under an eligible leasehold interest (the terms of the ground lease must extend beyond the maturity date of the Loan and only the land may be under a ground lease; the improvements must be owned by the mortgagor) Is a one (1) unit single family dwelling (attached or detached) designed for residential use, condominiums or planned unit developments approved by Fannie Mae, Freddie Mac or the Mortgage Insurer, townhomes and modular homes that are located in an area consistent with such use and intended for owner occupancy Is eligible for insurance through the Mortgage Insurer Other Requirements If the home is served by a well as its water source, DCA requires that a local or county health inspector test and certify to the safety and adequacy o the water source. Report must be dated within 30 days prior to closing. If the home is served by a septic tank, a test by a licensed plumbing contractor or local government health or building inspector will be required. Clear termite letters are required

124 Lenders must provide a copy of clear plumbing, electrical, and heating certifications if the appraiser indicated that the property was vacant and/or the systems were not operational at the time of the appraisal inspection Down Payment Assistance for Georgia Dram First Mortgage Loan Buyers who qualify for the Georgia Dream First Mortgage also qualify for down payment assistance. The buyer must: Use the loan in conjunction with a Georgia Dream First Mortgage Loan Complete a Homebuyer Education class and provide a certificate of completion Contribute a minimum of $1,000 to the purchase transaction Down Payment Loan Options STANDARD All eligible homebuyers qualify for $5,000 PEN (Protectors, Educators, Nurses), includes all employees of state licensed health care facilities Homebuyers who are employed in qualified public protection, military, health care or education qualify for $7,500 CHOICE (Consumer Home Ownership and Independence Choices for Everyone) Homebuyers whose household includes an individual living with a disability qualify for $7,500. Co-Op Homebuyers who are employed by local governments in participating Co-Op communities qualify for $7,500 Single Family Development Homebuyers who are purchasing homes in this special DCA Development qualify for up to $20,000 Down payment funds are provided as a Second Mortgage Loan for the purpose of principal reduction and the payment of pre-paid items and closing cost. Additional loan description: No monthly payments No interest Loan must be repaid when the home is sold or refinanced or no longer used as the buyer s person residence Resources Personalized Flyers - Homebuyer Education Agencies -

125 UDSA - United States Department of Agriculture Rural Development Rural Development Loan Assistance UDSA loans are government insured mortgages that are offered to purchase a home in rural areas with no down payment and low monthly mortgage insurance. Program assistance is provided in many ways, including direct or guaranteed loans, grants, technical assistance, research and educational materials. Currently, there are two kinds of USDA rural development loans available for single family households: USDA Guaranteed Rural Housing Loans USDA Guaranteed Loans are the most common type of USDA rural development loan and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate. USDA Direct Rural Housing Loans USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain home ownership. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Families must be without adequate housing, but be able to afford the mortgage payments including taxes and insurance, which are typically 24 percent of an applicant s income. However, payment subsidy is available to applicants to enhance repayment ability. Loans are for up to 33 years and the term for manufactured homes is 30 years. Other UDSA Loan Factors Owner occupied purchase At least a 620 FICO credit score Standard debt-to-income ratios are 29/41 - Housing ratio is 29% of your gross monthly income and 41% of your gross monthly income for total debt There are income limitations Maximum loan amount will be 102% of the appraised value of the home (100% plus the 2% USDA loan guarantee fee) USDA loans allow for the closing cost to be included in the loan amount (appraisal permitting) A bankruptcy Chapter 7 must have been discharged for three years or more A Chapter 13 When all court approved payments have been made on time as agreed for at least one year Rural Repair and Rehabilitation Loans and Grants - The Very Low-Income Housing Repair program provides loans and grants to very low-income homeowners to repair, improve, or modernize their dwellings or to remove health and safety hazards.

126 Eligibility - To obtain a loan, homeowner-occupants must be unable to obtain affordable credit elsewhere and must have very low incomes, defined as below 50 percent of the area median income. They must need to make repairs and improvements to make the dwelling more safe and sanitary or to remove health and safety hazards. Grants are only available to homeowners who are 62 years old or older and cannot repay a Section 504 loan. Mutual Self-Help Loans - The Section 502 Mutual Self-Help Housing Loan program is used primarily to help very low- and low-income households construct their own homes. The program is targeted to families who are unable to buy clean, safe housing through conventional methods. Families participating in a mutual self-help project perform approximately 65 percent of the construction labor on each other's homes under qualified supervision. The savings from the reduction in labor costs allows otherwise ineligible families to own their homes. If families cannot meet their mortgage payments during the construction phase, the funds for these payments can be included in the loan. Resources Property Eligibility Site - Income Eligibility Site - come@11 Various Conditions to Down Payment Assistance Georgia has many down payment assistance programs. Nothing is standard in qualifying and loan processing. Keep in mind: Funds are available on a first come, first serve basis May require the buyer to be a first time homebuyer, meaning that they have not owned a home within the last three years You may or may not be able to add and layer other programs together Not all lenders participate in down payment assistance programs Only certain areas of the state may qualify, i.e. rural areas Each city and county has their own programs limited to specific areas Purchase price limitation Income limitations - Entire household income Credit score limitations May require more than one appraisal Reserve requirements and or limits after closing The down payment assistance usually is provided in the form of a second lien placed against the qualifying property for a set period of time May require a home buying housing certificate Lender underwriting and down payment program sponsor underwriting Takes longer to close the transaction - Allow 60 day closings

127 Fair Housing Discrimination Complaints Fair Housing Law Housing discrimination based on your race, color, national origin, religion, sex, family status, or disability is illegal by federal law. If you have been trying to buy or rent a home or apartment and you believe your rights have been violated, you can file a fair housing complaint. The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members. What Is Prohibited In the Sale and Rental of Housing? No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap: Refuse to rent or sell housing Refuse to negotiate for housing Make housing unavailable Deny a dwelling Set different terms, conditions or privileges for sale or rental of a dwelling. Provide different housing services or facilities Falsely deny that housing is available for inspection, sale, or rental For profit, persuade owners to sell or rent (blockbusting) Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing In Addition: It is illegal for anyone to: Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act In Mortgage Lending No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability): Refuse to make a mortgage loan Refuse to provide information regarding loans Impose different terms or conditions on a loan, such as different interest rates, points, or fees Discriminate in appraising property Refuse to purchase a loan

128 Set different terms or conditions for purchasing a loan Fair Housing Penalties Civil penalties of up to $10,000 for the first offense, up to $25,000 for the second offense within a five-year period, and up to $50,000 for the third offense within a seven-year period Monetary fines for actual and/or punitive damages caused by the discrimination An injunction to stop the sale or rental of the property to someone else, making it available to the complainant Court costs Criminal penalties against those who coerce, intimidate, threaten, or interfere with a person s buying, renting, or selling of housing State penalties, including the loss of the real estate license Fraud is a reality. Get informed. Be prepared. Mortgage fraud schemes employ some type of material misstatement, misrepresentation, or omission relating to the property or potential borrower which is relied on by an underwriter or lender to fund, purchase, or insure a loan. These misstatements, misrepresentations, or omissions are indicative of mortgage fraud and include the following: Inflated Appraisals Fictitious/Stolen Identities Nominee/Straw Buyers False Loan Application Fraudulent Supporting Loan Documentation Kickbacks Although there are many different types of schemes, mortgage fraud can be summarized as a form of bank robbery where the bank is not even aware it has been robbed until months or years later. One benchmark illustrating this point is the Financial Crimes Enforcement Network s Mortgage Loan Fraud Update, which reveals an 88% uptick in U.S. mortgage fraud cases in the second quarter of 2011 from the same period a year ago. Report Mortgage Fraud, Mortgage Scams and Predatory Lending The Federal Bureau of Investigation (FBI) (202) National FBI Financial Institution Fraud Unit The Federal Trade Commission (FTC) and and To file complaint (877) Identity Theft Clearinghouse (877) Consumer Response Center To report fraud or register a complaint about a national bank, contact Office of the Comptroller of the Currency (OCC) Comptroller of the Currency (800)

129 To report fraud or register a complaint about a federal savings and loan association, contact: Office of Thrift Supervision (OTS) Consumer Affairs consumer.complaint@ots.treas.gov (202) (800) for consumer complaints National Credit Union Association (NCUA) Phone: (512) State Chartered Credit Unions The National Association of Attorneys General Phone: (202) National Fraud Information Center The National Fraud Information Center is a project of the National Consumers League. It focuses mainly on fraud against the elderly, and internet and telemarketing fraud all sources of mortgage fraud and mortgage scams. Center for Responsible Lending (919) U.S. Dept. of Housing and Urban Development (HUD) Office of Consumer and Regulatory Affairs Director, Interstate land Sales/RESPA Division (202) National Hotline: (800) Equifax For Fraud Alerts: P.O. Box Atlanta, GA (800) Experian For Fraud Alerts: P.O. Box 9530 Allen TX Phone: (888) Trans Union For Fraud Alerts: Phone: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634

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