PRODUCT MATRIX Effective as of February 13, 2017 The Finance of America Commercial LLC (FACo) Product Suite Matrix is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. Loans are subject to investor and business credit approval, appraisal and geographic location of the property and other underwriting criteria. Loan amounts and rates may vary depending upon loan type, LTV, verification of application information and other risk based factors. Application fees, closing costs and other fees may apply. The Matrix is not for reproduction or distribution without FACo s prior written consent. 2017 Finance of America Commercial LLC All rights reserved.
Loan Purpose Purchase a single property, or Refinance a single property, with option to take cash-out Purchase a portfolio of properties, or Refinance a portfolio of properties Acquire, renovate, and sell, or Acquire, renovate, and term-out Allows large volume purchasers to acquire and/or renovate multiple properties Property or Unit Acquisition Minimum 1 property per loan 7 units per loan 1 property per loan 1 property per loan Property Type Single-family detached residences (SFR) 2-4 unit residences Condominiums (warrantable and non-warrantable) Townhomes Planned Urban Developments (PUD) Single-family detached residences (SFR) 2-4 unit residences Condominiums (warrantable and non-warrantable) Townhomes Planned Urban Developments (PUD) Multi-family, 5-20 units Single-family detached residences (SFR) 2-4 unit residences Condominiums (warrantable and non-warrantable) Townhomes Planned Urban Developments (PUD) Single-family detached residences (SFR) 2-4 unit residences Condominiums (warrantable and non-warrantable) Townhomes Planned Urban Developments (PUD) Coupon 6.50% - 9.00% 5.50-7.50% 10.50% Fixed Interest Only 9.50% Fixed Interest Only Term 30 year fixed 5 or 10 year with balloon due at end of term. 9 Months 9 Months Amortization Full Amortization Up to 30 years, with interest-only option available Any multi-family property 30 years or older can not exceed a 25-year amortization. These properties do not qualify for interest-only loans. Interest-only payments with fixed rate. Interest-only payments with fixed-rate. Minimum Property Value $100,000 Multi-family 5-20 Units: $30,000 per unit Other property types: $50,000 per unit in most geographies. $100,000 per unit in Baltimore, Chicago, Cleveland, Detroit/Flint, Los Angeles, Miami, New Haven, New Jersey, New Orleans, Oakland, Philadelphia. $65,000 $55,000 Minimum Loan Amount $75,000 $700,000 $40,000 $40,000 Maximum Rehab Budget 30% of purchase price 50% of purchase price 1
Maximum Loan Amount $750,000 $5,000,000 We also offer loans above $5,000,000. Call for product details. $1,000,000 The Maximum Loan Amount includes acquisition and rehab draw amount, if applicable. For example, an initial advance of $770,000 can not have a rehab draw > $230,000, as this would exceed the $1,000,000 maximum. $1,000,000 Each individual property loan is limited to $1,000,000, but the Bridge Pro exposure limit is available up to $100,000,000. Recourse/Non-Recourse Full recourse to warm body guarantor only Recourse and Non-Recourse options (with customary bad boy carve outs) available Full recourse to warm body guarantor only Recourse and Non-Recourse options (with customary bad boy carve outs) available Maximum Allowable Combined FACo Loans, to an individual guarantor Recourse: $2,000,000 ($1,000,000 for Foreign Nationals) Non-Recourse: Recourse: $5,000,000 Non-Recourse: No cap Recourse: $5,000,000 Non-Recourse: Recourse: $5,000,000 Non-Recourse: Loan-to-Value (LTV) FICO Max LTV Fully Amortized: FICO: Max LTV 75% Value is appraised value Purchase: 720 80% 680 75% 660 70% FICO : Max LTV 680 : 75% 670 : 70% 700: 75% 680: 70% 660: 65% Refinance: 700 75% 680 70% 660 65% 660 : 65% Interest Only: LTV < 60% - DSCR 1.15x for 5 or 10 year LTV 70% - DSCR 1.20x for 5 year LTV 65% - DSCR 1.20 for 10 year SFR value must be $150,000; 2-4 Unit value must be $200,000 or amortizing DSCR min 1.15x. Interest Only not available on multi-family properties or portfolios that contain any multifamily properties. Loan-to-Cost (LTC) Cost is purchase price amount. < 3 months : 80% 3-6 months : 125% > 6 months : Full appraised value < 3 months : 80% > 3 months : Full appraised value 80% 85% Refinance Seasoning < 3 months : 80% LTC 3-6 months : 125% > 6 months : Full appraised value < 3 months : 80% LTC > 3 months: Full appraised value 6 months : 80% LTC > 6 months: Ineligible 6 months : 85% LTC > 6 months: Ineligible 2
Detailed Product Information 800.586.0607 When do we use LTV vs. LTC? Purchase: Use lesser of LTV or LTC calculation Refinance: Use LTC until property has seasoned for 6 months, then use LTV Purchase: Use lesser of LTV or LTC calculation Refinance: Use LTC until property has seasoned for 3 months, then use LTV Use lesser of LTV or LTC calculation Use lesser of LTV or LTC calculation Cash Flow Coverage See page 8 for examples. LTV : PDTI 65% : 65% <65% : 70% 1.15x Debt Service Coverage Ratio (DSCR) 1.05x DSCR (Only applicable for property values $250,000) 1.05x DSCR (Applies to rental properties only; only applicable for property values $250,000) Borrower LLC (Single Purpose Entity) or Individual LLC (Special Purpose Entity) LLC (Single Purpose Entity) LLC (Single Purpose Entity) Pre-Payment Penalty 3% of unpaid principal balance in Yield Maintenance/Declining Points None None yr 1, 2% in yr 2, and 1% in yr 3 Minimum Occupancy Purchase: Leased or Vacant (must be leased within 180 days) Refinance: Leased or has been leased within previous 60 days of closing date 90% occupied Vacant or Leased Vacant or Leased Rent Verification Executed lease agreement or verification of immediately preceding two months rent payments (if leased month-to-month). Executed lease agreement or verification of immediately preceding two months rent payments (if leased month-tomonth). Minimum occupancy of 90% required. Lease verification required for portfolios with > 10 rental units. Rent Calculation Determine gross rent (if property is leased) by verifying annual in-place rent. Determine market rent by appraisal rent addendum Mark to market adjustment (if necessary): - If property is leased: If gross rent is less than 105% of market rent, use gross rent. Otherwise, use 105% of market rent. - If property is not leased: Use lesser of estimated rent or 90% of market rent. Determine gross rent (if property is leased) by verifying annual in-place rent. Determine market rent by appraisal rent addendum. Mark to market adjustment (if necessary): - If property is leased: If gross rent is less than 105% of market rent, use gross rent. Otherwise, use 105% of market rent. - If property is not leased: Use market rent. 3
Experience No first time homebuyers No first time homebuyers No first time homebuyers. We also have additional experience requirements on your second outstanding loan. Minimum of 3 homes flipped/rented in the past 18 months. Borrowers with less than 7 in the past 18 months will be limited to a maximum of 75% LTC / 65% LTV. Foreign Nationals Allowed. LTV limited to 65%. Allowed. LTV limited to 65%. LTC limited to 75%. LTC limited to 75%. Loans must be non-recourse. Allowed. LTC limited to 75% and LTV limited to 65%. Allowed. LTC limited to 75% and LTV limited to 65%. Insurance Requirements More complex coverage required than standard owner occupied policy (i.e. rent loss coverage) For Refinance: If existing policy expires within thirty days of the closing, must verify that the premium has been paid or will be paid at closing. For Purchase: The must be verification that the premium period is at least twelve (12) months from the day of closing. Installment payment of premiums are prohibited. More complex coverage required than standard owner occupied policy (i.e., rent loss coverage and general liability coverage required.) For Refinance: If existing policy expires within thirty days of the closing, must verify that the premium has been paid or will be paid at closing. For Purchase: The must be verification that the premium period is at least twelve (12) months from the day of closing. Installment payment of premiums are prohibited. More complex coverage required than standard owner occupied policy (i.e., rent loss coverage may be required, and general liability coverage is required.) Minimum nine month premium paid at closing or proof of coverage reflected on a Special Form Policy/ Monthly Reporting Form Policy. More complex coverage required than standard owner occupied policy (i.e., rent loss coverage may be required, and general liability coverage is required.) Minimum nine month premium paid at closing or proof of coverage reflected on a Special Form Policy/ Monthly Reporting Form Policy Property Management Self-managed allowed, with two years' experience owning investment properties, or Use of a property management company to professionally manage the property. Self-managed allowed, with two years' experience owning investment properties, or Use of a property management company to professionally manage the property. If 11 or more rental properties are purchased with Bridge Pro line, then the following requirement applies: Self-managed allowed, with two years' experience owning investment properties, or Use of a property management company to professional manage the property. Rental Property Condition C4 or better (rent ready) C5 or better (rent ready) Not required Leased properties required to be in good and habitable condition. 4
Annual Escrows (collected monthly) Taxes and Insurance Taxes, insurance, and capital expenditures. Escrowed amounts for capital expenditures: $450 annually per SFR (collected monthly, ie., $37.50 per month per SFR) No escrows No escrows $350 annually per unit for 2-4 unit buildings and townhomes (collected monthly, ie., $29.17 per month per unit) $250 or greater annually per unit for 5+ unit buildings (collected monthly, ie., $20.83 per month per unit) Fees Not including any escrow deposits or customary third party settlement charges. Borrowers working with a mortgage broker may incur broker Origination Fees, broker Initial Draw Fees and/or broker Rehab Draw Fees; these fees vary by transaction. Appraisal Fee: Collected upfront, based on the average appraisal cost for your market. Foreign National Background Fee (if applicable): Collected upfront, based on the average background fee for your location. If the upfront fees collected vary from the actual cost of the appraisal and/or background check, costs are reconciled at time of closing through an additional charge and/or credit applied. Origination Fee: > of $1499 or 1.00% of final loan amount Processing Fee: $795 LLC Review Fee (if applicable): $750 per LLC, $213 per Owner Third Party Title Review Fee (only applies if using a non-preferred Title company on refinanced loans): $500 Attorney Closing Fee: $500 Appraisal Fee: Collected upfront, based on the average appraisal cost for your market. Foreign National Background Fee (if applicable): Collected upfront, based on the average background fee for your location. If the upfront fees collected vary from the actual cost of the appraisal and/or background check, costs are reconciled at time of closing through an additional charge and/or credit applied. Origination Fee: 1.00% of final loan amount Processing Fee: $3,500 LLC Review Fee: $750 per LLC Third Party Title Review Fee (only applies if using a non-preferred Title company on refinanced loans): $500 (per properties 1-10); $250 (per additional properties) Attorney Closing Fee: $2,250 Appraisal/Valuation Fee: Collected upfront, based on the average appraisal/ valuation cost for your market. Foreign National Background Fee (if applicable): Collected upfront, based on the average background fee for your location. LLC Review: $500 per LLC If the upfront fees collected vary from the actual cost of the appraisal and/or background check, costs are reconciled at time of closing through an additional charge and/or credit applied. Initial Draw Fee: > of $2,000 or 2.00% of initial draw amount Rehab Draw Fee: 2.00% of rehab draw amount Third Party Title Review Fee (only applies if using a non-preferred Title company on refinanced loans): $500 Attorney Closing Fee: $400 Foreign National Background Fee (if applicable): Collected upfront, based on the average background fee for your location. LLC Review: $500 per LLC, $250 per principal If the upfront fee collected varies from the actual cost of the background check, costs are reconciled at time of closing through an additional charge and/or credit applied. Initial Draw Fee: > of $2,000 or 2.00% of initial draw amount Rehab Draw Fee: 2.00% of rehab draw amount Third Party Title Review Fee (only applies if using a non-preferred Title company on refinanced loans): $500 Appraisal/Valuation Fees: Actual costs incurred Attorney Closing Fee: $400 5
Detailed Product Information Detailed Product Information 800.586.0607 Lease Structure No lease to purchase options. No ground leases. No cash-for-deeds. No leases with term >3 years. No lease to purchase options. No ground leases. No cash-for-deeds. No leases with term >3 years. No lease to purchase options. No ground leases. No cash-for-deeds. No leases with term >3 years. Additional Debt No subordinate debt or seller finance liens allowed. No subordinate debt or seller finance liens allowed. No subordinate debt or seller finance liens allowed. No subordinate debt or seller finance liens allowed. Equity Pledge Pledge by newly-forced LLC owned by Sponsor required for non-recourse loans $5MM or non-recourse loans above 65% LTV The following requirement may apply for loans with large exposure limits: Pledge by newly-forced LLC owned by Sponsor required for non-recourse loans $5MM Cash Management Required to be established at closing if either (a) loan amount $5MM or (b) loan is non-recourse with LTV > 65% Property Releases Available with 115% pay down of the allocated loan amount on individual asset (e.g., if 123 Main Street has allocated loan balance of $100,000 as part of a $2MM portfolio, a paydown of $115,000 would be required to release the asset so the resulting loan balance of $1.88MM and payment would recast.) Rehab Reimbursement Draws Single Draw only Single Draw Additional draws may be granted on exception only Property Surveillance 6 month property inspection required 6 month property inspection required Borrower Reporting Loan Amount $700,000 - $5,000,000: Quarterly: Rent Roll Loan Amount $5,000,000 - $100,000,000: Monthly: Rent Roll Quarterly: Borrower's unaudited financial statements for the period Annually: Borrower's audited financial statements for the period Annual Financial Review 6
Borrower Operations Review Simple Detailed Valuation Full appraisal Full appraisal Desktop valuation Desktop valuation 7
Sponsor/Guarantor Requirements Credit Score Refinance: Fully Amortized: FICO Max LTV FICO Max LTV 700 75% 680 75% 680 70% 670 70% 660 65% 660 65% Purchase: FICO Max LTV 720 80% 680 75% 660 70% Credit Check Background Check Minimum Net Worth Required on any individual acting as recourse guarantor and anyone with managing control. Required on (a) any party with control of the borrower (ie., a manager), and (b) any guarantor, and (c) any party (individual/entity) with a direct or indirect ownership interest 20%. Statement of positive net worth Required on any individual acting as recourse or non-recourse guarantor and anyone with managing control. Required on (a) any party with control of the borrower (ie., a manager), and (b) any guarantor, and (c) any party (individual/entity) with a direct or indirect ownership interest 20%. Typically equal to the lesser of (a) 100% of the loan amount inclusive of the borrower's interest in the financed properties or (b) 50% of the loan amount exclusive of the borrower's interest in the financed properties. Subject to exceptions depending on loan amount. FICO Max LTV 700 75% 680 70% 660 65% Required on any individual acting as recourse guarantor and anyone with managing control. Required on (a) any party with control of the borrower (ie., a manager), and (b) any guarantor, and (c) any party (individual/entity) with a direct or indirect ownership interest 20%. Minimum of 660. Lower credit scores allowed on an exception basis. Required on any individual acting as recourse or non-recourse guarantor and anyone with managing control. Required on (a) any party with control of the borrower (ie., a manager), and (b) any guarantor, and (c) any party (individual/entity) with a direct or indirect ownership interest 20%. 50% of loan amount Recourse: 30% of exposure limit Non-Recourse: 40% of exposure limit Minimum Liquidity We verify the source of all funds used to meet liquidity requirements. We do not use funds from unverified sources. Six months PITIA on subject property, plus for additional properties: 2% unpaid balance on 1-4 properties 4% on 5-6 properties 6% on 7+ Minimum of six months debt service payments required for loans <$2MM. 12 months debt service payments required for loans $2MM. Liquidity may vary with deal size and is subject 10% of loan amount (excluding cash to close) 10% of exposure limit to exceptions. 8
800.586.0607 Detailed Product Information 800.586.0607 Cash Flow Coverage Calculations1 Based on annual amounts Single Loan Product Equation Example Property Value: $150,000 In-Place Rent: $15,600 CALCULATION Principal + Interest + Taxes + Insurance + HOA Dues Gross Rent² 65% (if LTV 65%) 70% (if LTV < 65%) Loan Amount: $105,000 LTV: 70% Principal and Interest: $8,388 Taxes: $800 $8,388 + $800 + $875 + $0 = $15,600 64% Insurance: $875 HOA Dues: Portfolio Loan Equation (Gross Rent²x 75%³) - Taxes - Insurance 50% HOA Dues Annual Debt Service 1.15x Example In-Place Rent: $131,400 Principal and Interest: $68,700 Taxes: $11,100 Insurance: $7,623 HOA Dues: CALCULATION ($131,400 x 75%) - $11,100 - $7,623 $0 $68,700 =1.16 Bridge Single Loan Equation (Gross Market Rent x 75%³) - Taxes - Insurance 50% HOA Dues Annual Debt Service 1.05x Example Gross Market Rent: $15,000 Loan Amount: $87,000 Total Annual Interest: $9,135 Taxes: $800 Insurance: $760 CALCULATION ($15,000 x 75%) - $800 - $750 $0 $9,135 = 1.06 HOA Dues: of application information and other risk-based factors. Application, closing costs and other fees apply. 1. For informational purposes only; PTDI and DSCR underwriting calculations/factors shown above are effective as of December 2016 and are subject to change without notice. These are sample calculations for informational purposes only. 2. In-place rent if property is rented; market rent if property is vacant. If in-place rent is greater than market rent, we conduct a mark-to-market adjustment of 105% x market rent. 3. 25% haircut (deduction) accounts for operating expenses such as vacancies, property management costs, etc. The Finance of America Commercial LLC Product Suite Matrix is for informational purposes only and is subject to change. FACo reserves the right amend its underwriting guidelines in its sole discretion without notice. 9