FHA TRAINING

1. Titan Home Loans 214 Second Ave North Suite 206 Nashville TN 37201 Phone-615-255-2352 Email- info@titanhomeloans.net • FHA TRAINING

2. What is the FHA Product • A product that offers a low down payment (3%) • Seller Contribution can be up to 6% • No Reserves are Required • Upfront MIP is Required and is calculated at 1.5% using the base loan amount. • Monthly MIP is Required and is calculated at .50% which is less than most EA Loans • Gifts are permitted toward Closing Costs and Prepaids or Combinations • Gift Funds are permitted for the entire 3% • Types of Gift Funds (Down Payment Assistance, Immediate Family, Close Friend)

3. Mortgage Insurance • For Mortgages with Terms that Exceed 15 years there is Mortgage Insurance both upfront and monthly • For Mortgages with Terms that are less than 15 years there is upfront Mortgage Insurance however the monthly amount varies: • Loan Values less than 90% there is no monthly MI • Loan Values 90% and over the MI Factor is reduced

4. How do I sell FHA? • There are no income restrictions unless you are attaching to THDA Rates • Permits non-occupying co-borrowers without separate qualifying ratios • Minimum Credit Score is 580 • Does not require collections to be paid off if automated approval is received • Allows Underwriters to Manual Underwrite- so loans that do not receive automated approvals will actual benefit by having a person review the loan details.

5. Available Products • Fixed Rates- 15,20,25,& 30 year terms • 1 year, 3/1, 5/1 Adjustable Rates Available • Single and Multi Family Units- up to 4 units as long as owner occupied • Approved Condos and Spot Condo Program • Doublewide Manufactured Home Program • New Construction • PUD • They offer Refinances and FHA Secure Program

6. Does your Buyer Credit Qualify? • Minor Credit Issues Occurring more than 2 years do not require an explanation • Major Credit issues such as, judgments, collections, recent credit issues require an explanation. • Credit Inquiries within 90 days require an explanation • Court Ordered Judgments must be paid off prior to closing. Unless that judgment is being repaid and there are only 12 months left on the repayment. • Foreclosure or Deed In Lieu of Foreclosure means that a borrower cannot purchase a home for a 3 year period. • You can get a mortgage loan after 2 years of being discharged from a Chapter 7 Bankruptcy. Must have 3 re-established trade lines. Late Payments after a Chapter 7 means the borrower will have to put down 15%. • Borrowers currently involved in a Chapter 13 may purchase a home with 15% down with permission from the Bankruptcy Court. • Credit Counseling must be out of counseling for 1 year and bills must have been paid on time.

7. Compensating Factors to FHA • Borrower Makes a Down Payment of More than 10% • Borrower has a savings and checking account with a balance. • Borrower does not have excessive debt • There is a minimal increase in renting and owning. • Borrower has 3 months reserves. • Borrower has received increased earning by merit of job time, extra training, or additional school. • Down Payment is not from a Gift. • ***These items will not guarantee approval but improve chances with an underwriter!

8. FHA & Employment • Minimum Job Time Not Required • History of Employment Required for 2 years. • Buyers with frequent jobs changes are fine as long as income is the same or more. FHA looks at Income Stability not Job Stability. • Gaps for no job must be explained • School • Military • Death in Family • Child Birth

9. FHA & Down Payments • Earnest Money that Exceeds 2% of the Sales Price must be documented– where did the money come from? • Large Deposits must be documented and explained • Gift Funds, require a letter stating it is not to be repaid, copy of the givers cancelled check or withdrawal slip, evidence getter received, and current balance in the account by a bank print out stamped by the teller. • Gifts can be received from relative, close family friend, employer, and labor union. • Sale of person property is permitted by showing you owned the item, and bill of sale showing item is sold. • Cash saved at home is allowed!!!!. Mattress Money works- Borrower must be able to document how they saved cash and then they must deposit the money in some account prior to closing./

10. Citizenship and Immigration • Citizenship of the United States is not required. • FHA will insure mortgage to Lawful Permanent Resident Aliens • FHA will insure mortgages to Non- Permanent Resident Aliens • Borrowers must have a valid Social Security Number. • If temporary residence status will expire within a year, and a prior history of residency status renewal exists- lender will assume continuation will be granted.

11. NO CREDIT SCORE • We will need Verification of Rental History • 3 Non-Traditional Tradelines • Cell Phone • Cable • Car Insurance • Gas/Electric • Any Subscription Service

12. FHA Approved Lists • Borrowers are checked through FHA Connection for delinquent federal debt which may disqualify them • Title Companies, Appraisers, Agents, Sellers, Mortgage Originators, Buyers are checked against 2 databases. If there are found hits on the database there may be explanation or exclusion by FHA for an FHA Loan.

13. Appendix • Sample Gift Letter • Sample Score Card • Marketing Material • Quick Application • Any questions please call us at 615-255-2352 or email us at info@titanhomeloans.

14. Sales Contracts • Sales Contracts and ALL Addendums must be provided to FHA. • Contracts must be legible. • Personal Property cannot be listed with the exception of appliances and attached lighting fixtures. This may cause the Underwriter to subtract the value of the personal property from the sales price.

15. Property & Appraisals • No longer requires minor cosmetic deficiencies, allows for AS-IS on Existing Properties. Repairs are no longer required for the following: • Missing Handrails • Cracked /Damaged Doors • Cracked Windows • Minor Plumbing Leaks • Defective Floor Finishes • Rotted Counter Tops • Cracked Sidewalks • Poor Workmanship

16. ITEMS THAT WILL NEED REPAIR • Inadequate access from Bedrooms to Exterior of Home • Leaking or Worn Out Roofs • Evidence of Structural Foundation Problems • Defective Paint Surfaces for homes constructed before 1978 • Defective Paint Surfaces for homes constructed after 1978. • Escrow for exterior repairs are allowed under certain circumstances

17. COMPARABLES • Any Comparable Used to Determine the Value of the property must be within a 1 mile radius and closed and sold 6 months prior the appraisal date. • There are exceptions to this rule…

18. Minimum Property Standards • If the Subject property has re-sold in less than 90 days by the current seller, the property is not eligible for FHA financing– the exception to this is if HUD is the seller. • If the Subject property has re-sold between 91-180 days the lender may require a second appraisal. • If the subject has sold within the last 12 months FHA may require additional documentation to support the re-sale value.

19. Sign Up For Free Video Training e-mail: info@titanhomeloans.net CALL OUR FHA HELP HOTLINE 255-2352 ext 106 www.titanhomeloans.net