Non-QM Value & Benefit

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2 Non-QM Value & Benefit More investor loan op0ons Borrowers who were nega0vely impacted by housing crisis Limited by past consumer credit problems Outside of agency investor guidelines Qualify with alterna0ve income documenta0on No-doc business purpose loans Lower FICOs due to past consumer lates, bankruptcies and open collec0ons OK! Bank Statement Documenta0on OK! Prior defaults, 10+ proper0es, LLC ownership, foreign na0onals, and non-warrantable condos No seasoning required for housing defaults 2

3 Deephaven Products Near- Prime Non- Prime Investment Start here for all owneroccupied and 2 nd homes borrowers at least 2 years from a housing event. Start here for all owneroccupied and 2 nd homes borrowers with a housing event within the last 2 years. Start here for all investor proper0es and foreign na0onals. 3

4 Near- Prime Provides lending opportuni0es to borrowers who may have consumer credit challenges but whose housing history is more consistent. The program also helps self-employed borrowers who may not qualify using Appendix Q underwri0ng standards. Interest Only Op0on Available Credit scores as low as 620 Max LTV for PURCHASE: 90% Max LTV for RATE/TERM: 90% Max LTV for CASH OUT: 85% $250,001 - $500,000: 5% LTV reduction $500,001 - $1,000,000: 10% LTV reduction Bank Statement Documenta0on Allowed 12 mo Personal up to 80% LTV or 24 mo personal up to 90% LTV and 4 Business up to 85% LTV

5 Non- Prime The typical borrower does not qualify for conven0onal or government financing due to the recent foreclosure and, possibly, a related bankruptcy. Also helps self-employed borrowers who may not qualify using Appendix Q underwri0ng standards. Credit scores as low as 500 Max LTV for PURCHASE: 85% Max LTV for RATE/TERM: 85% Max LTV for CASH OUT: 80% $250,001 - $500,000: 5% LTV reduction Bank Statement Documenta0on Allowed: 12mo or 24mo Personal up to 80% LTV and Business Bank Statements up to 80% LTV 5

6 Investment Provides lending opportuni0es to investors who have been nega0vely impacted by the housing crisis. There is no seasoning requirement for a prior housing default. Interest Only Op0ons Investor Advantage designed for experienced investors with no income and no employment verifica0on Credit scores as low as 560 Max LTV for PURCHASE: 80% Max LTV for RATE/TERM: 80% Max LTV for CASH OUT: 75% $250,001 - $500,000: 5% LTV reduc0on Bank Statement Documenta0on Allowed: 12mo Personal up to 80% LTV and 24mo Business Bank Statements up to 6 75% LTV

7 Investor Advantage Road Map Addi0onal forms Required a. Business Purpose Affidavit 2 copies required 1 signed at applica0on and another signed AND notarized at closing b. Fannie Mae form 3170, 1-4 Family Rider c. Personal Guaranty if vested in an LLC 7

8 Investor Advantage Road Map We will accept a 1003 and ask that the following sec0ons not be completed: a. Sec0on IV Employment Informa0on b. Sec0on V Monthly Income and Combined Housing Expense Informa0on 8

9 FAQ Investor Advantage QualificaBons Credit Score: Credit Reports should be supplied for all borrowers and/or guarantors If two borrowers, the lower of the two middle credit scores will be used for Representa0ve Loan Score Tradelines: 3 tradelines repor0ng for 12+ months, OR 2 tradelines repor0ng for 24+ months All with ac0vity in the last 12 months Late Payments: Rolling late payments are not permihed Consumer lates may not exceed 1X60 over prior 12 months Employment / Income: There is no employment verifica0on or income analysis required There is not Debt-to-Income (DTI) or Debt Service Coverage Ra0o (DSCR) requirement 9

10 FAQ Investor Advantage QualificaBons Documenta0on: Full asset documenta0on is required for purchase transac0ons to evidence sufficient funds to close Assets must be sourced or seasoned for 60 days Gil Funds: Not permihed Reserves: There is no reserve requirement Appraisal: Two (2) appraisals are required for loans > $1,000,000 A Clear Capital Collateral Desk Analysis (CDA) is required for all transac0ons 10

11 Tips from the Scenario Desk - Credit Tradelines: 3 tradelines repor0ng for 12+ months OR 2 tradelines repor0ng for 24+ months, all with ac0vity in the last 12 months Limited Tradelines allowed on the Non-Prime product 6 months reserves required, 10% minimum borrower contribu0on (see guidelines for all requirements) Loans in a deferment period, collec0on or charged-off accounts, accounts discharged through bankruptcy, and authorized user accounts are not considered acceptable trade lines 11

12 Tips from the Scenario Desk - Credit Collec0ons and Charge-offs that may remain open < 24 months old with a maximum cumula0ve balance of $2, months old with a maximum of $2,500 per occurrence Medical collec0ons Collec0ons and charge-offs that have passed beyond the statute of limita0on for that state (suppor0ng documenta0on required) 12

13 Tips from the Scenario Desk Personal Bank Statement Program General Requirements 24 months complete bank statements 12 Month Bank Statement Calcula0on Available Ini0al signed 1003 with monthly income disclosed Personal Bank Statements over the lazy dog. over the lazy dog. 100% of deposits, averaged over 24 months Transfers between personal accounts should be excluded Transfers from a business account into a personal account are acceptable Unusual deposits must be documented brow fox Borrowers will qualify off the lower of the following - over the lazy dog. Signed month bank statement average (or 12 Month Average if using 12 Month Calcula0on) 13

14 Tips from the Scenario Desk Business Bank Statement Program General Requirements 24 months complete bank statements Profit and loss (P&L) statement covering the same 24 months period prepared by CPA or licensed Tax Preparer Ini0al signed 1003 with monthly income disclosed Business Bank Statements Borrowers will qualify based on the Business P&L supported by the business bank statements Business P&L prepared by a CPA or licensed Tax Preparer covering the same 2 year period as the bank statements or the most recent 2 calendar years Bank statements average deposits over 24 month period must equal 95% or more of P&L average gross revenue Borrower must be 100% owner of business Lower of the P&L Net Income or 1003 Ini0al Disclosed Income 14

15 Tips from the Scenario Desk Asset DepleBon Allowed under Near-Prime ONLY - Rate/Term Refi or Purchases Net of down payment, loan costs and reserves: borrowers must have a minimum of the lesser of a) 1.5 0mes the loan balance OR b) $1mm in qualified assets Qualified assets include: % of checking/savings/money market accounts 2. 70% of remaining value of stocks/bonds 3. 60% of re0rement assets v Asset seasoning for 6 months required Monthly Income = Net Qualified Assets / 120 Months 15

16 Collateral Non Warrantable Condos Commercial Space HOA Dues Li0ga0on Single En0ty Ownership Investor Concentra0on Allowed in project up to 30% No more than 20% of units may be 60 days or more past due over the lazy dog. Projects in libgabon are acceptable as long as the pending lawsuit is not structural in nature PotenBal damages don t exceed 25% of the HOA Reserve over the lazy dog. Allowed up to 20% Allowed up to 60% The associabon s insurance policy is sufficient to cover the libgabon 16

17 Tips from the Scenario Desk Down Payment and Assets Minimum Borrower Contribu0on Borrowers must contribute a minimum of 5% of their own funds toward the down payment on purchase transac0ons 10% contribu0on required for the following: No housing history Loans amount > $424,100 2 nd Homes Limited trade lines Gil Funds Gil funds are allowed aler the borrower has made the minimum required borrower contribu0on towards the down payment 17

18 Tips from the Scenario Desk Down Payment and Assets PITIA Reserves All transac0ons require a minimum of 3 months reserves 6-12 month reserves are required for certain transac0ons. Refer to the specific matrix and guidelines Re0rement Accounts Vested funds from re0rement accounts (IRA/Keogh and 401(k) accounts) are acceptable for down payment, closing costs, and reserves 100% of the vested amount may be used Re0rement accounts that do not allow any type of withdrawal may not be considered v Funds do not have to be withdrawn to use for reserves 18

19 Tips from the Scenario Desk Income Residual Income Payment Shock $1,500 is required for Non-Prime product over the lazy dog. $2,500 is required for Near-Prime product over the lazy dog. 150% max payment shock on primary residence transacbons AddiBonal $150 per dependent is also required Up to 250% allowed with compensabng factor 19

20 Tips from the Scenario Desk - Income over the lazy dog. over the lazy dog. brow fox over the lazy dog. 20

21 General guideline quesbons answered ExcepBon Requests Credit Review Complex Income calculabon quesbons Scenario Desk The Deephaven Mortgage Scenario Desk is designed to help you quickly determine which borrowers are likely to qualify for our programs. Deephaven s experienced mortgage professionals are here to help at any step along the way! 21

22 We look forward to working with you! Ques0ons? 22