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My Community Mortgage

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Title: My Community Mortgage


1
My Community Mortgage Flexible Mortgage Training
  • Offered through
  • First Mortgages Wholesale Division

2
Agenda
  • My Community Mortgage
  • Introduction
  • Eligibility Guidelines
  • Eligible Programs
  • Underwriting Guidelines
  • Community Solutions
  • Community HomeChoice
  • MCM Program Highlights
  • Flexible Mortgage
  • Introduction Highlights of Program
  • Eligibility Guidelines
  • Underwriting Guidelines
  • Eligible Programs
  • Flex Program Highlights
  • Interest Rates Fees
  • Marketing Tools, Training Support

3
MY COMMUNITY MORTGAGE
  • Introduction to First Mortgage Corporation
  • Introduction Eligible Borrowers
  • Suite of Community Mortgage Options
  • My Community Mortgage Product Features

4
Introduction
  • First Mortgage Corporation is an independent
    residential Mortgage Banking firm with branch
    offices located throughout the west.
  • Founded in 1975, FMC is a direct-lending mortgage
    banker approved as a lender and/or loan servicer
    by the Federal Housing Administration (FHA) the
    Veterans Administration (VA) the Federal
    National Mortgage Association (Fannie Mae) the
    Federal Home Loan Mortgage Corporation (Freddie
    Mac) the Government National Mortgage
    Association (Ginnie Mae) the California Housing
    Finance Agency (CalHFA) the Nevada Housing
    Division the California Public Employees
    Retirement System (CalPERS) the California
    Teachers Retirement System (CalSTRS) and many
    other major secondary market institutions.
  • Having funded in excess of 12 billion in
    residential real estate loans, FMC has assisted
    more than sixty thousand families with their
    mortgage needs.  FMC enables families to enjoy
    the American Dream of Homeownershipits the
    only thing we do.
  • FMC has a longstanding tradition of providing
    unparalleled customer service and a reputation
    built on adding value to the home loan process. 
    Thats why FMC should be consideredYOUR FIRST
    LENDING RESOURCE.

5
What is the MCM Program?
  • Penetrating minority and other underserved
    markets is a core element of future growth and
    business success.
  • The MyCommunityMortgage (MCM) loan program is
    Fannie Maes program designed to help Lenders and
    Brokers meet the needs of low moderate income
    homebuyers in your communities.
  • Market Restrictions All 50 states (CA, NV, WA,
    OR, AZ for FMC)
  • 2 Main Objectives of the program
  • 1. AFFORDABILITY
  • Little to no cash required
  • 2. FLEXIBILITY
  • UW Flexibilities
  • Borrower Options

6
Targeted Borrowers
Low to Moderate Income Borrowers with
7
What is the current market doing?
  • The market continues to slow down
  • Product availability continues to shrink making
    it a challenge to find alternative financing
    solutions
  • Non-Agency products continue to experience
    liquidity issues
  • Purchases, refinances and new home construction
    are declining
  • Overall home values are either flat or
    depreciating throughout the country
  • There is a shift in the market from Agency
    products to Government products
  • Agency and Government products may be a better
    alternative to increase originations, lessen
    risk, and grow market share in this turbulent
    environment

8
Opportunity
  • There are still borrowers who
  • Are 1st Time Homebuyers
  • Have non-traditional credit
  • Have blemished credit and/or a low credit score
  • Have limited cash for down payment or closing
    costs
  • Have low-to-moderate income
  • Receive income from government benefits
  • Have boarder income from non-family members
  • Have cash-on-hand for closing

9
Solution
  • Provide qualified borrowers an affordable, stable
    homeownership solution with MCM, by offering
  • Loans to qualified FTHB, low-to-moderate income
    borrowers and other underserved markets
  • No minimum down payment for qualified borrowers
  • Up to 100 LTV and 105 CLTV
  • Non-traditional credit to those who need flexible
    credit options
  • Flexibility to use cash-on-hand for down payment
    and closing costs
  • Flexible options for sources of income
  • Up to 6 seller contributions on loans between
    90.01-100 LTV
  • Lower initial monthly payments with optional
    temporary subsidy buydown plan
  • Fixed rates up to 40-year terms and adjustable
    rate mortgages (ARMS)
  • Community 2nds up to 105 CLTV
  • Low mortgage insurance (MI) coverage maximum of
    20
  • No Area Median Income (AMI) limits in Fannie
    Neighbors areas
  • Interest only option available on 30 and 40 year
    fixed mortgages and 5/1 adjustable rate mortgage

10
Suite of Community Mortgage Options
11
PROGRAM TYPES
11
1/16/2016
  • 1ST Mortgage Programs

12
1st Program Types
  • FIXED
  • Conventional Agency Fixed Rate
  • 10-40 year terms
  • Conventional Agency Fixed Rate Interest Only
    (10/20)
  • 30 year term1
  • ARMS
  • Conventional Agency T-Bill ARM (5/1, 7/1 and
    10/1)
  • 30 year term
  • Conventional Agency LIBOR ARM (5/1, 7/1 and 10/1)
  • 30 to 40 year terms

13
Fully Indexed FIXED Programs
Topic Description
Program Types Conforming 10, 15, 20, 25, 30, 40 Year Fixed
Interest Rate Interest Rate is Fixed and payment is Fully Amortized for the entire term of the loan.
Term 10 40 Years
Max LTV See Max LTV/CLTV page
Max CLTV See Max LTV/CLTV page
Maximum Loan Amount Fannie Mae Conforming Loan Limits
Loan Purpose Purchase Rate Term Refinance
Occupancy Owner Occupied
Minimum Fico Score AUS No minimum FICO Determined by DU (NO BK or FC in last 24 months) Manual See Max LTV/CLTV page
14
Interest Only FIXED Programs
Topic Description
Program Types Conforming 30, 35, 40 Year Interest Only Fixed Programs
Interest Rate Interest Rate is Fixed for the entire term of the loan.
Qualifying Rate Qualify borrower at the Fully Amortized Rate (PITI)
Term 30 Year Term Interest-only payment for the first 10 years, followed by a 20-year fully amortized payment 35 Year Term Interest-only payment for the first 5 years, followed by a 30-year fully amortized payment 40 Year Term Interest-only payment for the first 10 years, followed by a 30-year fully amortized payment
Max LTV See next page
Max CLTV See next page
Maximum Loan Amount Fannie Mae Conforming Loan Limits
Loan Purpose Purchase Rate Term Refinance
Occupancy Owner Occupied
Minimum Fico Score Minimum 620 regardless of DU decision
15
ARM Programs
Topic Description
Program Types Conforming 5/1 (2/2/5 caps only), 7/1, 10/1 T-Bill ARM Conforming 5/1 (2/2/5 caps only), 7/1, 10/1 Libor ARM
Interest Rate Initial Interest rate and monthly payment are low, but these may change during the life of the loan based on the fluctuation of the 1-year T-Bill and the LIBOR Indices, Margin and Caps.
Qualifying Rate Qualify borrower at the Fully Indexed Fully Amortized Payment (PITI)
Term T-Bill 30 Year Term LIBOR 30 40 Year Term
Max LTV See Max LTV/CLTV page
Max CLTV See Max LTV/CLTV Page
Maximum Loan Amount Fannie Mae Conforming Loan Limits
Loan Purpose Purchase Rate Term Refinance
Occupancy Owner Occupied
Minimum Fico Score AUS No minimum FICO Determined by DU (NO BK or FC in last 24 months) Manual See Max LTV/CLTV page
16
Max LTV / CLTV Fico
Program Units Purchase and Rate Term Purchase and Rate Term
Program Units Maximum LTV 1 / CLTV 2 Minimum Credit Score (Manual UW)
Community 100 Plus 1 Unit 100 / 105 620
Community 100 Plus 1 Unit 97 / 105 600
Community 97 1 Unit 97 / 105 600
Community 2 Units 2 Units 97 / 105 620
Community 3-4 Units 3 3-4 Units 3 95 / 105 3 660 3
Maximum LTV/CLTV may be reduced by 5 in areas experiencing Declining Markets/Values 1 Cooperatives Maximum LTV is 90 Cooperatives Maximum LTV is 90
Maximum LTV/CLTV may be reduced by 5 in areas experiencing Declining Markets/Values 2 Only community 2nds and closed-end 2nds are allowed Only community 2nds and closed-end 2nds are allowed
Maximum LTV/CLTV may be reduced by 5 in areas experiencing Declining Markets/Values 3 3-4 Units A DU Approve/Eligible certificate is required 3-4 Units A DU Approve/Eligible certificate is required
17
ELIGIBILITY REQUIREMENTS
17
1/16/2016
  • Eligibility Borrowers
  • Eligible Properties

18
Eligible Borrowers
Topic Description
Eligible Borrowers U.S.citizens Permanent Resident Aliens Non-Permanent Resident Aliens
Non Citizen Borrowers Most common types of cards and stamps Social Security Card Permanent Resident or Green Card Employment Authorization Card Immigrant Visa Entry Stamp I-551 Stamp in Passport
Usage of ITINs ITINs are issued to individuals by the Internal Revenue Service without regard to their immigration status. Therefore, the ITIN does not provide any information about whether a person is residing in the US legally or not.
Non Occupant Co-Borrowers Not Allowed
Other Borrower may not own any other residence at time of closing
19
Eligible Properties
Topic Description
Eligible Properties Attached SFRs Detached SFRs1 Attached PUDs Detached PUDs1 Low-Rise Condos High-Rise Condos Cooperatives 2-4 Units2
1 Includes modular, panelized prefabricated classifications of factory-built housing 2 3-4 Units Ineligible with the Community Solutions option. A DU Approve/Eligible certificate is required.
20
INCOME REQUIREMENTS
20
1/16/2016
  • Borrower Income Requirements
  • Other Income Requirements
  • Overtime and Part-Time Income
  • Boarder Income
  • Rental Income
  • Co-Borrowers Income

21
Income Requirement
Topic Description
Borrower Income Limit HUD AMI The borrowers income is limited to 100 of the annual HUD AMI (area median income) in which the property is located with the following exceptions CA 140 WA OR (Several Counties) 120 Non-Metropolitan Counties 115 All Other Areas 100
Exception Median income limits do not apply if If the subject property is located in a FannieNeighbors area including border regions www.efanniemae.com OR When a public agency, housing finance agency, non-profit organization or an employer provides down payment or closing cost assistance. The income limits imposed by those organizations will apply.
22
Other Income Requirements
Topic Description
Boarder Income (related or not related) MCM 97 MCM 100 Only 1-2 Unit Only Boarder may not be obligated on the note Boarder has lived with the borrower and paid rent for the past 12 months Border income does not exceed 30 of the total qualifying income Boarder provides documentation to demonstrate a history of shared residency that shows the boarders address as the same as the borrowers, and proof of rental payments for the past 12 months Drivers license with property address Bank Statements Cancelled checks or bank deposits
Rental Income (2-4 Units) FNMA Form 216 required If one or more of the units is rented or is intended to be rented, rental income for the units may be added to the borrowers income when calculating the debt ratios based on the following For 2 units, 75 of the gross rents may be used For 3-4 units, 65 of the gross rents may be used Allowed only on LTVs lt 97
Co-Borrowers Income If there are multiple occupying co-borrowers, and any of the occupying co-borrowers have no credit score due to an insufficient credit record with the repositories, no credit analysis on those borrowers is required, as long as their combined income is not greater than 30 of the total qualifying income (50 if approved through DU).
Overtime Part Time Income Need to verify 24 month history of this income type Borrowers eligible under Community Solutions can qualify with a 12-month history
Section 8 Voucher income allowed Section 8 Voucher income allowed
23
GENERAL GUIDELINES
23
1/16/2016
  • Underwriting Options
  • Underwriting Guidelines
  • Other General Guidelines
  • Fannie Mae Geocoder
  • Mortgage Insurance

24
Underwriting Options
25
MCM DU Guidelines
Topic Description
Advantages of using DU Quicker approval Limited waiver of reps and warrants Co-borrower with no credit can contribute up to 50 of the qualifying income Possible reduced documentation Possible higher ratios than with manual underwriting Possible lower credit score than with manual underwriting DU recommendation of EA-I eligible with limited waiver of reps and warrants Standard EA loan-level price adjustments (LLPAs) do not apply Up to 100 LTVs with 3 seller contributions Use of DU not required, but strongly encouraged
Reasons for using Manual UW Broker is not a DU/DO subscriber Goal should be to transition to DU Broker not participating in Expanded Approval (Refer with Caution) Under the following DU Recommendations Approve/Ineligible, Refer/Ineligible, EA-II, EA-III, Refer with Caution IV, Refer with Caution, or Out of Scope Nontraditional credit history borrowers (Out of Scope) Borrowers with extenuating circumstances Borrowers needing additional flexibility through a targeted borrower option (Community Solutions)
26
Credit Score
  • Minimum Credit Score requirements
  • DU - No minimum credit score required except for
    IO loans (620)
  • Manual Underwrite

Program Units Purchase and Rate Term Purchase and Rate Term
Program Units Maximum LTV 1 / CLTV 2 Minimum Credit Score (Manual UW)
Community 100 Plus 1 Unit 100 / 105 620
Community 100 Plus 1 Unit 97 / 105 600
Community 97 1 Unit 97 / 105 600
Community 2 Units 2 Units 97 / 105 620
Community 3-4 Units 3 3-4 Units 3 95 / 105 3 660 3
1 Cooperatives Maximum LTV is 90 Cooperatives Maximum LTV is 90
2 Only community 2nds and closed-end 2nds are allowed Only community 2nds and closed-end 2nds are allowed
3 3-4 Units A DU Approve/Eligible certificate is required 3-4 Units A DU Approve/Eligible certificate is required
27
Credit History
Borrowers who do not meet the minimum credit score requirement or lack credit history may be eligible if they meet the following requirements Borrowers who do not meet the minimum credit score requirement or lack credit history may be eligible if they meet the following requirements
NO Credit Score Manual UW ONLY! A non-traditional credit report is acceptable One rental housing expense source (If no rental payment exists, then other credit references can be utilized as long as a total of four sources are documented for at least 12 months) One utility payment source such as telephone service or cable television service One additional utility or other credit source (medical, auto, life, school tuition, insurance policy or household/renters)
LESS than required credit score The borrower has an insufficient credit score due to insufficient traditional credit history the credit will be considered acceptable provided the borrower has all of the following Minimum credit history of 3 tradelines at least 2 years old No more than nine accounts currently open (Accounts closed six months or more at application are not counted). No history of bankruptcy, foreclosure, collections or judgments. No history of delinquency in housing debt. No delinquencies for revolving accounts in the last 12 months and no more than one account 1x30 days in the 1 months before No delinquencies for installment accounts in the last 24 months, and no more than one account 1x30 days in the 12 months before Outstanding revolving account balances representing no more than 50 of aggregate credit lines at application. The account may not be paid off or paid down to qualify the borrower.
28
Other General Guidelines
Topic DU Manual
Maximum DTI As determined by DU 43 Community Solutions gt 97 LTV 45 DTI lt 97 LTV 50 DTI
Reserves As determined by DU MCM 100 NO RESERVES REQUIRED MCM 97 1 Unit NO RESERVES REQUIRED 2-4 Units 2 Months PITI (May not be gifted) Community Solutions 100 No Reserves required Community Solutions 97 - Same as MCM 97 except Gift funds are OK for reserves
Homebuyer Education 1 Unit Participation in a homebuyer education program is recommended but not required 2-4 Units Homebuyer education is required for all borrowers and co-borrowers who are 1st Time Homebuyers All Income Properties All borrower and co-borrowers must complete a landlord education course Education programs can be taken through a community counseling organization and require in-person, face-to-face tutorial, classroom, or workshop sessions. Participation in an education program must be documented by a Certificate of Completion that is submitted with the loan file 1 Unit Participation in a homebuyer education program is recommended but not required 2-4 Units Homebuyer education is required for all borrowers and co-borrowers who are 1st Time Homebuyers All Income Properties All borrower and co-borrowers must complete a landlord education course Education programs can be taken through a community counseling organization and require in-person, face-to-face tutorial, classroom, or workshop sessions. Participation in an education program must be documented by a Certificate of Completion that is submitted with the loan file
Prepayment Penalties Not Available Not Available
29
Buydowns, Down Payment, Sources of Funds
Topic Description
Temporary Buydowns 2/1 1/1 Temporary Buydowns available 660 min. score Purchase Transactions Only Not permitted on 3-4 units Not permitted on 5/1 ARM
Temporary B/D Qualifying Rate LTV gt 95 Qualify at Note Rate (DU or Manual) LTV lt 95 Qualify at Note Rate PLUS 1 DU (Bought Down rate if Manual UW)
Borrower Contribution 1 Unit No minimum contribution required 2 Units The minimum down payment is 3 which must be from the borrowers own funds 3-4 Units The minimum down payment is 5 of which 3 must be from the borrowers own funds
Interested Party Contribution Loans gt 90 LTV are eligible up to 3 interested party contributions (6 for 90 or less) Interested-party contributions may be used exclusionary to cover closing costs and prepaid expenses
Acceptable Sources of Funds for Down Payment, Closing Costs and Prepaid Items Borrowers own funds, including checking, savings, certificate of deposit, Individual Development Account (IDA) Proceeds from loans secured by the borrowers own assets Gift Funds from relative, fiance / fiancee, or domestic partner Unsecured loans or grants from a non-profit organization, government agency, or the borrowers employer Cash-on-hand (allowed for 1-unit properties only) Approved Fannie Mae Community 2nds
Subordinate Financing Only an Approved Fannie Mae Community 2nd is allowed Community 2nd may be treated as a gift in DU rather than a Subordinate 2nd if Community 2nd is fully forgiven over time (both the PI) Payment is deferred for no less than 5-years Must be included as Subordinate financing in CLTV calculation and all system calculations.
30
Submitting an MCM loan through DU
Topic Description
Step 1 Input 1003 as you would normally
Step 2 In left navigation panel, select Community Lending
Step 3 Input the Metropolitan area or Co. and HUD median Income. If you dont, DU will automatically fill it out for you
Step 4 Select Yes or No in Fannie Neighbors area
Step 5 Select Yes or No in Community Seconds Area If the Community 2nds meet the 2 criteria below, select NO and input it as Gift Funds Requires NO repayment within the first 5 years of the loan It meets Fannie Mae eligibility requirements If it doesnt meet the above criteria, select YES and input it as a Community 2nd loan Must enter funds as subordinate financing it in the DOT and payment in the proposed housing section.
31
(No Transcript)
32
Determining Income Eligibility with the Fannie
Mae Property GeoCoder
  • No Income limits if property is located in a
    Fannie Neighbors area
  • www.efanniemae.com
  • Workaround for new construction in a Fannie
    Neighbors census tract
  • For new construction (the address is not in the
    system), use the Property Geo Coder to provide a
    printout for the loan file showing an existing
    property in the same census tract
  • The appraisal must provide evidence that the
    subject property is in the same census tract

33
Mortgage Insurance
Reduced MI Rates Use MI chart below regardless of DU recommendation. Reduced or Custom MI is not acceptable. See sample combination below Reduced MI Rates Use MI chart below regardless of DU recommendation. Reduced or Custom MI is not acceptable. See sample combination below Reduced MI Rates Use MI chart below regardless of DU recommendation. Reduced or Custom MI is not acceptable. See sample combination below Reduced MI Rates Use MI chart below regardless of DU recommendation. Reduced or Custom MI is not acceptable. See sample combination below Reduced MI Rates Use MI chart below regardless of DU recommendation. Reduced or Custom MI is not acceptable. See sample combination below Reduced MI Rates Use MI chart below regardless of DU recommendation. Reduced or Custom MI is not acceptable. See sample combination below
LTV RANGE LTV RANGE MCM Minimum Coverage MCM Minimum Coverage Standard Minimum Coverage Standard Minimum Coverage
97.01 100 LTV 95.01 97 LTV 90.01 95 LTV 85.01 90 LTV 80.01 85 LTV 97.01 100 LTV 95.01 97 LTV 90.01 95 LTV 85.01 90 LTV 80.01 85 LTV 20 18 16 12 6 20 18 16 12 6 35 35 35 30 25 35 35 35 30 25
Borrower paid MI may be financed into loan up to max 100 CLTV (including financed MI). Borrower financed MI may be in whole or in part check with MI company for availability of this option. Borrower paid MI may be financed into loan up to max 100 CLTV (including financed MI). Borrower financed MI may be in whole or in part check with MI company for availability of this option. Borrower paid MI may be financed into loan up to max 100 CLTV (including financed MI). Borrower financed MI may be in whole or in part check with MI company for availability of this option. Borrower paid MI may be financed into loan up to max 100 CLTV (including financed MI). Borrower financed MI may be in whole or in part check with MI company for availability of this option. Borrower paid MI may be financed into loan up to max 100 CLTV (including financed MI). Borrower financed MI may be in whole or in part check with MI company for availability of this option. Borrower paid MI may be financed into loan up to max 100 CLTV (including financed MI). Borrower financed MI may be in whole or in part check with MI company for availability of this option.
Financed MI allowed on 1 Unit up to 100 LTV. Max CLTV gt 95 including financed MI must be delivered using Special Feature Code 574. Financed MI allowed on 1 Unit up to 100 LTV. Max CLTV gt 95 including financed MI must be delivered using Special Feature Code 574. Financed MI allowed on 1 Unit up to 100 LTV. Max CLTV gt 95 including financed MI must be delivered using Special Feature Code 574. Financed MI allowed on 1 Unit up to 100 LTV. Max CLTV gt 95 including financed MI must be delivered using Special Feature Code 574. Financed MI allowed on 1 Unit up to 100 LTV. Max CLTV gt 95 including financed MI must be delivered using Special Feature Code 574. Financed MI allowed on 1 Unit up to 100 LTV. Max CLTV gt 95 including financed MI must be delivered using Special Feature Code 574.
Example Using standard MI or A- MI rates 200,000 loan 100 LTV, 30 Yr Fixed, 6.50 int. rate 200,000 loan 100 LTV, 30 Yr Fixed, 6.50 int. rate 200,000 loan 100 LTV, 30 Yr Fixed, 6.50 int. rate 200,000 loan 100 LTV, 30 Yr Fixed, 6.50 int. rate 200,000 loan 100 LTV, 30 Yr Fixed, 6.50 int. rate
Standard Rate MI Monthly Payment 20 MI 98 20 MI 98 35 MI 160 35 MI 160 Savings 62 / Month
MI A- Rate, 619 score 162 162 237 237 75 / Month
34
Mortgage Insurance
Reduced MI Rates Use MI chart below regardless of DU recommendation. Reduced or Custom MI is not acceptable. See sample combination below Reduced MI Rates Use MI chart below regardless of DU recommendation. Reduced or Custom MI is not acceptable. See sample combination below Reduced MI Rates Use MI chart below regardless of DU recommendation. Reduced or Custom MI is not acceptable. See sample combination below
LTV RANGE MCM Minimum Coverage Standard Minimum Coverage
97.01 100 LTV 95.01 97 LTV 90.01 95 LTV 85.01 90 LTV 80.01 85 LTV 20 18 16 12 6 35 35 35 30 25
Borrower paid MI may be financed into loan up to max 100 CLTV (including financed MI). Borrower financed MI may be in whole or in part check with MI company for availability of this option. Borrower paid MI may be financed into loan up to max 100 CLTV (including financed MI). Borrower financed MI may be in whole or in part check with MI company for availability of this option. Borrower paid MI may be financed into loan up to max 100 CLTV (including financed MI). Borrower financed MI may be in whole or in part check with MI company for availability of this option.
Financed MI allowed on 1 Unit up to 100 LTV. Max CLTV gt 95 including financed MI must be delivered using Special Feature Code 574. Financed MI allowed on 1 Unit up to 100 LTV. Max CLTV gt 95 including financed MI must be delivered using Special Feature Code 574. Financed MI allowed on 1 Unit up to 100 LTV. Max CLTV gt 95 including financed MI must be delivered using Special Feature Code 574.
35
Community SolutionsCommunity Solutions 100
Community Solutions 97
35
1/16/2016
  • Community Solutions a targeted borrower option
    under the MCM is designed especially for
    Americas teachers, police officers,
    firefighters, health care workers, and military
    personnel.
  • Community Solutions adds flexibilities to the MCM
    to help our countrys valued workers overcome
    obstacles to homeownership.
  • The Community Solutions option may be especially
    attractive to borrowers who have access to an
    Employer-Assisted Housing benefit to cover gifted
    reserves, a temporary interest rate buydown,
    and/or down payment or closing costs.

36
Community Solutions
Community Solutions was designed especially to add flexibilities to MyCommunityMortgage to help our countrys valued workers overcome obstacles to homeownership. Community Solutions was designed especially to add flexibilities to MyCommunityMortgage to help our countrys valued workers overcome obstacles to homeownership.
Eligible Borrowers Education Professionals Public or private schools, kindergarten through post-secondary levels Public Safety State or local law enforcement agency, fire department, or other sworn law enforcement or firefighting officers or Health Care Professionals Certified, accredited, or licensed healthcare workers such as nurses, medical residents, pharmacists, technicians, or technologists. Military Personnel
Qualifying Ratio 45 single qualifying ratio 43 with temporary interest rate buydown 50 with 2 months reserves and strong compensating factors (maximum 97 LTV)
Reserves One months reserves gifting acceptable 2 months reserves for 50 qualifying ratio
Temporary Buydown Underwritten at bought-down rate 43 single qualifying ratio
Other 1-2 Unit Properties only Part-time and overtime income with 12 months history Manual underwriting required
37
Community HomeChoice
37
1/16/2016
  • Community HomeChoice is an option under
    MyCommunityMortgage designed to meet the mortgage
    needs of low-to-moderate income borrowers with
    disabilities or have a family member with a
    disability.
  • It offers extra flexibilities for borrower income
    and qualifying ratios, and allows a non-occupying
    co-borrower.

38
What is the Community HomeChoice
Community HomeChoice is an option under MyCommunityMortgage designed to meet the mortgage needs of low-to-moderate income borrowers with disabilities or have a family member with a disability. Community HomeChoice is an option under MyCommunityMortgage designed to meet the mortgage needs of low-to-moderate income borrowers with disabilities or have a family member with a disability.
Eligible Borrowers Borrower who are disabled Borrowers who have a family member(s) with disabilities living with them purchasing their first home Defined as handicapped under the federal Fair Housing Act
Borrower Income Limit Borrower Income limit 115 of AMI See income limits page for higher income limit areas
Other Non-occupying co-borrowers allowed DU or Manual Underwriting in most cases Manual underwriting Higher ratios, gifted reserves
39
Highlights of the MCM Program
MCM Program Highlights MCM Program Highlights
My Community 97 97/105 LTV/CLTV
My Community 100 Plus 100/105 LTV/CLTV
Purchase and Rate Term refinances
Flexibility on credit histories Non traditional credit accepted
Income Source flexibilities Boarder Income allowed (from relatives or non-relatives) Rental Income Allowed
Greatly Reduced Mortgage Insurance Premiums Eg., 20 coverage for 100 LTV, 18 for 97, 6-16 for other LTVs gt80
Community Solutions Program Extra flexibilities with options to serve teachers/educational institution employees, police officers, firefighters, health care workers and eligible military personnel (eligible for higher ratios and gifted reserves)
Community HomeChoice Program Available for borrowers with a disability or borrowers with family members who have a disability living with them purchase their first home who may need greater underwriting flexibilities, including non-occupying co-borrowers
No minimum borrower contribution (1 unit)
40
MCM Highlights Contd
MCM Program Highlights MCM Program Highlights
No reserves required in most cases
No minimum Fico score with a DU approval
5/1, 7/1 and 10/1 Fixed Period ARMS 30 and 40 year terms available
20, 25, 30 or 40-year Fixed Rate terms
10-year Interest Only option for 5/1 30 year term and 30 or 40-year Fixed Qualify at higher of note rate or fully indexed rate on fully amortized payment
Temporary Buydowns allowed for Fixed Rate, 7/1 and 10/1 ARMS
Available though DU or Manual Underwrite
Secondary financing only allowed with an approved Community 2nd
Qualifying community 2nds can be treated as a gift rather than a subordinate lien (DU only)
Owner-occupied primary residences only Borrower must not own any other property
2-4 Units allowed for borrowers who want to live in one and rent out the other 3-4 Units DU Approve/Eligible up to 95/105 LTV/CLTV
41
FANNIE MAE FLEXIBLE 100
41
1/16/2016
  • Introduction
  • Eligible Borrowers
  • Highlights of the Program
  • Down Payment / Source of Funds

42
What is the Flexible Mortgage Program?
  • The Flexible Mortgage loan program is Fannie
    Maes reward program for borrowers with average
    to above average credit history who have
    experienced difficulty in saving a down program
    for a home.
  • Market Restrictions All 50 states (CA, NV, WA,
    OR, AZ for FMC)
  • Targeted Borrowers
  • 1. Limited Funds for Down Payment
  • Flex 100 (NO DP)
  • Flex 97 (3 DP)
  • Use savings for other investments or expenditures
  • Use savings for moving expenses, etc.
  • 2. Have Access to alternative sources of funds
  • Gifts, grants, unsecured loans from relatives,
    employers, etc.

43
Eligibility Guidelines
Topic Description
Eligible Borrowers U.S. Citizens Permanent Resident Aliens Non-Permanent Resident Aliens
Eligible Properties 1 Unit SFR Detached or Attached PUD Detached or Attached Condominium
Income Limits Not Applicable
Sales Price Limits Not Applicable
Target Area/Fannie Neighbors Not Applicable
Occupancy Owner Occupied Only
Purpose Purchase Rate Term
Interested Party Contribution Up to 3 of sales price (Premium pricing may be used to fund closing costs exceeding the minimum borrower contribution requirement)
Prepayment Penalty Not Available
44
Underwriting Guidelines
Topic Description
Underwriting Options DU ONLY with Approve/Eligible, EA-I, EA-II, EA-III or Refer/Eligible
Minimum Credit Score NO MINIMUM with a DU approval (IO loans require 620 Minimum)
Maximum DTI As determined by DU
Reserves As determined by DU
Temporary Buydowns 2/1 and 1/1 Eligible
Temporary Buydown Qualifying Rate 95 LTV Qualify at the Note Rate lt 95 LTV Qualify at the Note Rate PLUS 1
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Down Payment / Sources of Funds
Topic Description
Borrower Contribution There isnt a down payment required, however the borrower must contribute a minimum amount based upon one of the two choices Minimum of 3 of the purchase price which may be applied towards closing costs and/or prepaid items for Flex 97 or 100. (The 3 can be paid by any acceptable source of funds) OR Minimum 500 cash from own funds for Flex 100 or Flex with sub financing (funds must be on deposit acceptable sources of funds are checking, savings, CD or other depository accounts). All other funds from the list of acceptable sources of funds may not be included in the 500.
Acceptable Sources of Funds for Any Use Borrowers own funds checking, savings, CD or other depository accounts Proceeds from loans secured by borrowers assets Gift funds from a relative Grants from non-profit agencies that do not have to be repaid Unsecured loans from a non-profit community organization, government agency, or the borrowers employer (Premium pricing is not an acceptable source of flexible funds)
Acceptable Sources of Funds for Down Payment Closing Costs Interested party contributions limited to 3 of the lesser of the sales price or appraised value Lender paid closing costs are limited to 2 of value Interested party contributions may not be applied to the borrowers minimum required contribution. The contributions and premium pricing may only cover closing costs and prepaid items in excess of the borrowers initial contribution
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1st Program Types
  • FIXED
  • Conventional Agency Fixed Rate
  • 10-40 year terms
  • Conventional Agency Fixed Rate Interest Only
    (10/20)
  • 30 year term1
  • ARMS
  • Conventional Agency T-Bill ARM (5/1, 7/1 and
    10/1)
  • 30 year term
  • Conventional Agency LIBOR ARM (5/1, 7/1 and 10/1)
  • 30 year term
  • Conventional Agency LIBOR ARM Interest Only (5/1,
    7/1 and 10/1)
  • 30 year term

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Max LTV / CLTV
Topic Flex 97 Flex 100 Flex w/Sub Financing
Maximum Loan Amount Fannie Mae Conforming loan limits apply Fannie Mae Conforming loan limits apply Fannie Mae Conforming loan limits apply
Maximum LTV/CLTV Purchase, RT Refinance 97 / 105 100 / 105 95 / 105
With IO Feature 97 / 100 100 / 100 100 / 100
Cash Out Refinance Not Eligible Not Eligible Not Eligible
Mortgage Insurance
Topic Flex 97 Flex 100 Flex w/Sub
Borrower Paid 35 35 LTV gt 80 MI Coverage is 18
Lower Cost (Must receive a DU approve or refer recommendation) 18 25 LTV gt 80 MI Coverage is 18
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Highlights of the Program
Flexible Mortgage Program Highlights Flexible Mortgage Program Highlights
Maximum 100 LTV (minimum 90 LTV without secondary financing) No minimum LTV required for loans with secondary financing On refinance transactions, minimum 95.01 LTV
Up to 105 CLTV when originated with an approved Community 2nd
Available to be underwritten through FNMA DU
Interest Only Option (for the 1st 10 years of the loan) available on 30 Quality at higher of note rate or fully indexed rate on fully amortized payment
No Borrower Income restrictions
No Homebuyer Education required
Reserves determined by DU (usually 2 months)
Purchase and Rate Term refinances
Owner-occupied primary residence only
Available Terms 15, 20, 25, 30 year Fixed
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INTEREST RATE, FEES, MARKETING SUPPORT
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  • Interest Rate
  • Allowable Points
  • Fees / Costs
  • Marketing
  • Support

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Interest Rate
  • Interest Rates for the MCM Flexible programs
    are available on the FMC website
  • www.firstmtgcorp.com
  • OR
  • From your A/E

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Points Fees
Topic Description
Origination Points No Max Points Negotiated between Broker/Borrower Must not violate laws
Discount Points No Max Points Negotiated between Broker/Borrower Must not violate laws
Premium Pricing MCM Must be used to cover Closing Costs Prepaid Items Flex - Allowed
Fees See Standard Doc Order form on FMC Wholesale Website www.firstmortcorp.com Broker can charge on top of FMC fees as long as its reasonable and customary
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Marketing Tools
  • Visit our website www.firstmtgcorp.com for
    marketing materials, tools, forms, training, etc.
  • Weekly Trainings Open Broker Web Trainings
    available every Friday Contact your AE for a
    schedule!
  • Compare your 100 financing opportunities
  • Resources are always available to help you find
    the ideal mortgage for your borrowers needs
  • Compare guideline requirements for our various
    100 financing products

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1/16/2016
  • Thank you for joining our training today and we
    hope the information provided was informative and
    will help you build your business!
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