100% financing options for calpers members - updated 1/19/09

A Complete Guide to CalPERS Home Purchase Loans

Thank You for Attending

We Will Begin in a MomentClass will begin at 7:00pm

Presented By:Broadview Mortgage Corporation

Presenter:

Scott Schang

Contact Information:

Phone: [email protected]


The Purpose and Goals of this Class

• To Create and Empower Home Owners

• Educate you about Exclusive financing options for members of California Public Employees Retirement System - CalPERS

• Empower you with the ability to make educated decisions in the home buying process

• Introduce you to Broadview Mortgage Corporation as your CalPERS expert


Topics We Will Cover In This Class

• Eligibility Guidelines for CalPERS Loans

• Available CalPERS Home Loan Options

• CalPERS Personal Loan Guidelines– 100% Financing Option

• $7,500 Federal Tax Credit

• Wrap Up and Take Aways


Topics We Will Cover In This Class

• Ask Questions throughout presentation– You may type questions in at any time during the

presentation – Questions box on your screen

– CalPERS loan specialists are standing by to answer your questions during the presentation

– The only dumb question is the one you don’t ask

Write number down now in case you get disconnected

1-866-667-6724


How CalPERS benefits from Program

– CalPERS pension fund invests in mortgage notes as mortgage backed securities

• CalPERS is not a lender

– Payments go back into CalPERS, pension fund

– CalPERS Home Loans are an investment vehicle for the CalPERS retirement fund

– Contributes to the growth and stability of your retirement system as a member of CalPERS


Who is Eligible

– Active or inactive Member of the California Public Employees’ Retirement System – “CalPERS”

– Active or inactive Member of the Legislators’ Retirement System – “LRS”

– Active or inactive Member of the Judges’ Retirement System – “JRS”

– Retired and Annuitant Members are also Eligible


Who is Eligible

– You must intend to occupy the property as your primary residence

– May only have one outstanding CalPERS Mortgage Loan at any given time

• If co-borrower on another CalPERS loan it must be paid in full

– There are no income limitations


Property Qualifications

• Eligible Properties – Single Family Residence – Detached– 2-4 Unit Properties – Attached – *Conforming Only

• Up to $417,000 loan amount– Condominiums / Townhomes – Attached

• Must intend on occupying property as primary residence – No investment or second homes

• Home can be located in any State• You must move into home within 45 days of

note date – documents drawn


Available Loan Options

– CalPERS Home Loan Programs can be used for• Rate and Term Refinance• Cash Out Refinance• Purchase of a new home

– Rate and Term and Cash out refinance options are not advantageous in the current state of the credit markets as of today’s date

– We will only be addressing Purchase Money Loan options in this class



– If you do your research you will find offered…• Conventional Conforming Loan Options -

Fannie Mae & Freddie Mac – Non Government– 30 & 15 Year Fixed– 30 Fixed - 10 Year Interest only– 3/1 ARM– 5/1 ARM– 7/1 ARM - 7/1 ARM Interest only– 10/1 ARM - 10/1 ARM Interest only

• Conventional Non-Conforming Loan Options– 30 & 15 Year Fixed rate only– Loan amounts up to 4 times conforming



– Although CalPERS Guidelines still show these programs as available - Markets have changed

– Underwriting guidelines have eliminated ARM and Interest Only programs over 80% loan to value

– Private Mortgage Insurance is required for any 1st loan amount above 80% loan to value

– PMI companies underwriting guidelines are significantly more strict and take precedence

• Minimum 720 Fico Score Required• Maximum 45% DTI• Maximum LTV 90%



• Conventional Loan Program Review– Maximum 90% first mortgage

• Minimum 5% down payment• 5% CalPERS Personal Loan

– Minimum 720 Credit Score– Maximum 45% Debt to Income

• Low and No Down Payment Option Available


FHA Fixed Rate – Low to No Down

• FHA Loans are Government insured - MIP– Up to 96.5% Loan to Value

• 3.5% minimum down payment

– Can be used in conjunction with a CalPERS personal loan to pay down payment

• Must meet requirements for personal loan

– Credit and Qualifying guidelines are much more flexible than conventional

– Can use non-occupying co-mortgagers to qualify


FHA Purchase Loan Basics

• 2009 FHA Loan Limits– Based on MSA – from up to $625,500– “FHA Jumbo” is anything above $417,000

• Results in slightly higher interest rates

• Owner occupied only - 1-4 units ok• Loan limits increased for 2,3,4 units

– Limits determined by MSA – Call for details



• FHA Loans require 2 types of Mortgage Insurance Premiums - MIP

– Upfront Mortgage Insurance Premium• 1.75% of Loan Amount• Can be financed into loan amount

– Monthly Mortgage Insurance Premium• .55% of Loan Amount• Included in monthly payment• Included on mortgage statement



• Up to 6% seller concessions allowed on FHA loans with minimum down payment of 3.5%– 6% concessions allowed on conventional loans

with minimum 10% down payment– Seller concessions can be used toward closing

costs only, not down payment

• Full income documentation required– 2 years employment history– W2’s or Tax Returns– Current pay stubs

• No assets required for 1-2 unit properties


Down Payment Assistance Program

• CalPERS Personal Loan Guidelines– Personal Loan is available to take out for the

purposes of contributing to the down payment required to purchase a home

– CalPERS Personal Loan is secured by Member’s retirement account with a pledge agreement.

– Funds are not withdrawn from the Member’s account, but used as collateral for the CalPERS Personal Loan

– Loan is treated as a liability and payment included in debt to income ratio

– No lien is placed against the property



• CalPERS Personal Loan Guidelines– Eligible borrowers

• Active or inactive members of CalPERS, LRS and JRS

• Retired and annuitants members, and Tier Two Member whose contributions are service credits are not eligible for the Personal Loan

– Eligible uses for Personal Loan• Can be used in conjunction with a CalPERS

Mortgage Loan for the purposes of down payment assistance only



• CalPERS Personal Loan Guidelines– Eligible Properties

• Single family residence - Detached• Condominiums - Attached• Planned Urban Development - PUD

– Must be occupied as principle residence– No multi family properties - 2 to 4 units not eligible



• CalPERS Personal Loan Guidelines– Loan Type

• Personal loan is fixed rate, fully amortized– Loan Term

• Loan term is determined by loan amount– $1,000 - $1,499 3 Years– $1,500 - $2,999 4 Years– $3,000 - $4,999 5 Years– $5,000 - $9,999 10 Years– -$10,000 - $18,421 15 Years

– Minimum loan is $1,000 – Minimum term is 1 year



• CalPERS Personal Loan Guidelines– Maximum Loan Amount

• Up to 5% of the value of the home or• Up to 50% of each Member’s current

contribution to retirement account• Maximum Personal Loan amount is $18,421

– Members may obtain their current contribution amount, available for use on a CalPERS Personal Loan by contacting CalPERS at 888-225-7377

• First loan amount can not exceed $350,000


Interest Rate Float Down Policy

• There are two opportunities to float down your “locked” interest rate during purchase process– If interest rates drop – You automatically get the

lower rate

• Opportunity #1: At time of approval

• Opportunity #2: At time of drawing loan docs– Interest rate MUST be locked for 60 or 90 days

• Personal Loan is eligible for float down


CalPERS Home Loan Review• Conventional conforming and non-conforming

loans require minimum 10% down payment– Can use Personal Loan up to 5% if eligible

• Can purchase 1-4 unit properties if primary– 1-2 unit properties if non-conforming loan amount

• Two free float down opportunities• FHA fixed rate first mortgage with Personal

Loan provides no down payment option• If you work in a Public School or Community

College – May be eligible for CalSTRS 80/17– 3% down payment required – No MIP


“Red Flag” - FHA Approved lenders

• Many illegal “Branch” companies that are not approved to originate FHA loans

• Check official HUD website for approval status of lender - will provide link on site

• “Red Flags” include – a different company name and/or address on page 3 of loan application.

$7,500 Federal Tax Credit

• No-interest loan paid back over 15 years– Begin paying back 2 years after credit

• Must purchase on or before July 1st, 2009– Between April 8th, 2008 and July 1st , 2009

• Must be first time home buyer– Can not have owned in past 3 years

• 10% of purchase price up $7,500

• $7,500 - Married filing joint or Single taxpayer

• Married filing separate $3,750


• Home bought in 2008 can be claimed on 2008 returns

• Home bought in 2009 can be claimed on 2008 (or amended 2008) return

• Income limit is $150,000 for married couple– Phase out maximum is $170,000

• Income limit is $75,000 for single taxpayer– Phase out maximum is $95,000

• Loan is paid back in 15 equal installments– Added to your tax liability if you owe– Deducted from your refund if over paid


• You would be ineligible for Tax Credit if:– Your income exceed the phase-out range– You buy your home from a close relative. This

includes your spouse, parent, grandparent, child or grandchild

– You stop using your home as your main home– You sell your home before the end of the year– You are a nonresident alien– Your home financing comes from tax-exempt

mortgage revenue bonds - CalHFA– You owned another main at any time during the

three years prior to the date of purchase

Wrap up and Take Aways

– We are the Lender for all CalPERS, CalSTRS, CalHFA, FHA & VA, Conventional and Jumbo Loans

– We can Refer you to a qualified Real Estate Agent in your area

– We are more than happy to be your “second opinion” if you are already working with someone

– We are committed to educating and empowering homeowners - Join us for future classes

Wrap up and Take Aways

– You will receive a “Thank you” email with links to the information we’ve talked about here today

• Copy of power point presentation• Link to search HUD approved lenders• Link to search MSA Loan Limits• Dream Home Finder request• Secure on-line FHA loan application• Links to tools and resources we talk about in

all of our classes• A schedule of all upcoming classes

Upcoming Home Buyer Classes

• A Complete Guide to Buying Foreclosures and Short Sales

• A Complete Guide to Closing Costs and the Good Faith Estimate

• A Complete Guide to the CalSTRS 80/17 Home Purchase Program

• A First Time Home buyer’s Complete Guide to Credit and Qualifying

• A First Time Home Buyer’s Complete Guide to Hiring a Real Estate Agent and Finding the Best Deals

• A Complete guide to FHA Purchase Loan Options

Check back often for upcoming classes

Thank you for Attending

You input is ValuablePlease complete 2 question

survey when you log off

Presented By:Broadview Mortgage Corp.

Presenter:

Scott Schang

Contact Information:

Phone: [email protected]

100% financing options for calpers members - updated 1/19/09

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