WHO QUALIFIES FOR FRESH START HOUSING PROGRAM

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2 Keep in mind that in order to qualify for FRESH START there are some very important guidelines, which must be followed. Below is a brief list of the primary underwriting guidelines. Homeowners must have verifiable income; all income will be verified to guidelines. Temporary income such as Unemployment, Short Term Disability, etc. will not be allowed.

3 The homeowner s income must have a Front End Ratio of no greater than 40%. This is the homeowner s gross household income versus the new rental payment. Primary Residences only, no rental or income producing properties allowed unit properties are permitted; however the owner must reside in at least one of the units. Property must be in Marketable Condition. Marketable condition is defined, as no deferred maintenance issues such as leaking roofs, missing sidings, etc. There are also no functional obsolesce of the subject property such as a missing or non-- working A/C units, missing water heaters, sinks, tubs, toilets, counter tops, etc The client-- homeowner homeowner property must be valued at 20% less than what is owed on the 1st mortgage. In example someone who has a home valued at $100, must have a mortgage owing on the 1st mortgage of at least $120,

4 The home can be 2 or more payments past due OR on-- time payments may qualify too. Under no circumstance should anyone encourage a homeowner to skip or miss payments to their mortgage(s). If a homeowner is capable of making their mortgage payment(s) they should do. FRESH START does not provide services for stopping or delaying Foreclosures or Trustee sales; should the client be in such position the client-- homeowner should seek the services of someone skilled and licensed in these areas. Bankruptcies:Homeowner may not be in active bankruptcy of any type at application or during the rental period. Homeowner s mortgage under Fannie Mae and Freddie Mac is not application as of this time to qualify for FRESH START This program is under the US Treasury Department Housing Initiative HAFA-- SD You can view the details by clicking here.

5 FRESH START Frequently Asked Questions (FAQ s) Q: When does FRESH START begin negotiations with the homeowner s lender? A: FRESH START will engage the lender in the effort to acquire the property within 30 days after they received the package from the homeowner. Q: What type of home is FRESH START intended to help? A: FRESH START was created to assist homeowners with their primary residence and usually does not accept investment or commercial properties into the program. Q: What is the typical physical condition of FRESH START home? A: The home must be in marketable condition and able to pass a standard home inspection as determined by an independent 3rd party appraiser. These appraisals are subject to both investor and secondary market review; therefore it must be determined to be in average or good condition by the independent appraiser. If an appraisal report comes in with questions, homeowner can ask for a second appraisal from a 3rd party appraiser ( homeowner will incur the cost of a secondary appraisal).

6 Q: What type of customer is FRESH START intended to help? A: FRESH START is intended to help homeowners who are upside-- - down on the value of the property. It s UNDERWATER-- the home is worth less than the principal value the homeowners still owes on the mortgage. Q: Who are the lenders that FRESH START typical works with? A: FRESH STARTTM usually works with licensed conventional lenders, subprime and negative amortization and bank portfolio loans are acceptable for the FRESH START program. Q: Who are the lenders that FRESH START typically does not work with? A: Private lenders or hard money lenders are not acceptable for the FRESH START program.

7 Q: How accurate should individuals be when submitting financial figures? A: It is imperative that all financial information given to FRESH START from the homeowners be complete and accurate. Q: What home values are desirable for FRESH START? A: The current market value of the home should be at least 20% lower than the balance of the first mortgage on the home. Originating first loan or mortgage must exceed $100,000 and must be below $729, Q: How is the current market value of the home determined? A: Recent sales of properties comparable to your home are analyzed to determine the initial current market value of your home. Your real estate agent may have provided some of these to you to assist in this process. The final determining factor will be the independent 3rd party Appraiser s evaluation and value.

8 Q: How far behind is the typical homeowner entering FRESH START? A: Homeowners entering FRESH START do not have to be late on their mortgage payment. Homeowners wishing to participate in FRESH START must be able to meet the requirements of setting aside the FRESH START estimated monthly lease determined by FRESH START lease calculator for a period equal to 3 monthly lease payment. FRESH START and its employees/referral partners CANNOT and NEVER advise anyone to miss a mortgage payment for any reason. FRESH START is designed to help homeowners that have already fallen behind on their mortgage payments due to a financial hardship and cannot currently afford the mortgage payment on their home. Q: What type of income is desired to enter FRESH START? A: The homeowners entering FRESH START can any documentable source of income that demonstrates they are capable of making the monthly FRESH START payment. Our Internal Underwriters will determine the validity and acceptability of all income documentation provided.

9 Q: How is the FRESH START monthly payment calculated? A: FRESH START bases the payment on the net present value of the home. Your representative will help you to determine the new FRESH START payment and if you verified income is sufficient for the FRESH START. Q: What is the upfront fee for FRESH START? A: NO UPFRONT FEES are charged for FRESH START. Q: When will the details of FRESH START are provided up front and in advance of signing any documents? A: After receipt of the FRESH START Homeowner Application, your package will be underwritten for admission to FRESH START. Each homeowner can review the terms of the proposal and accept or decline at their discretion.

10 Q: When should I discuss FRESH START with an attorney? A: We advise our potential clients to consult independent legal counsel for any questions they have about their personal circumstances in relation to FRESH START. Q: How flexible are the terms of FRESH START? A: The homeowner must be willing to cooperate with FRESH START and all terms of the agreements to insure that negotiation with the lender is handled correctly. It is important not to interfere with the negotiation process. Q: What happens upon acceptance into FRESH START? A: The client will receive a copy of the appraisal report and the lease agreement with the Acceptance Package. The appraisal report will reflect the market value of the home based on comparable sales in the area. In addition you will receive an Acceptance Letter into the program; you must sign and return these forms as instructed..

11 Q: When should I discuss FRESH START with an attorney? A: We advise our potential clients to consult independent legal counsel for any questions they have about their personal circumstances in relation to FRESH START. Q: How flexible are the terms of FRESH START? A: The homeowner must be willing to cooperate with FRESH START and all terms of the agreements to insure that negotiation with the lender is handled correctly. It is important not to interfere with the negotiation process. Q: What happens upon acceptance into FRESH START? A: The client will receive a copy of the appraisal report and the lease agreement with the Acceptance Package. The appraisal report will reflect the market value of the home based on comparable sales in the area. In addition you will receive an Acceptance Letter into the program; you must sign and return these forms as instructed..

12 Q: When does a homeowner begin making monthly rental payments? A: Monthly payments for the actual Lease begin at Close of Escrow (COE) and are due on the 1st of the month. If escrow closes after mid month then the 1st lease payment is prorated and the following month s lease payment is also due at the close of escrow, your SPA account should have enough to cover these amounts. The client will make payments to the Special Purpose Account 15 days after acceptance into the program to prove the ability to afford the home at current market value; this allows a payment history to be established which must be proven to the investor. Payments to your SPA are typically due the 1st of each month. Q: What are the funds in the Homeowners Personal Savings Account used for? A: As stated the funds in the Homeowners Personal Savings Account are used for 3 purposes; 1st they prove to the investor that the customer will not have payment shock and they are willing and able to make the lease payments. Next, keep in mind that lease payment are due at the time lease starts which is to say the 1st lease payment is due immediately upon close of escrow. Finally, the funds in the SPA account equal 2 payments will be used as security deposit on lease.

13 Contact: Mega Team Realtors Fresh Start Certified Listing Agents Contact Persons: Bernadette Santos Ross Sit Crispin Ang