Special Home Loan Programs

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What you will learn in this ClassSpecial Loan ProgramsCalSTRS 80/17 home purchase loanCommunity Access purchase loan

Qualifying guidelinesHome buyer qualificationsProperty qualifications

Your class will start in a moment

What you will learn in this ClassRed flags and MisinformationHow to avoid misinformationHow to identify bait and switch

The Next StepHiring the best team to help you buyWhat you need to get pre-approved

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CalSTRS 80/17 Purchase LoanCalifornia State Teacher’s Retirement System

CalSTRS is NOT a lender and does not offer loans

CalSTRS established qualifying guidelines

CalSTRS approved lenders to offer loan program

CalSTRS will purchase closed loans that meet guidelines

Payments go back into CalSTRS pension fund

You do not have to be a member of CalSTRS

CalSTRS 80/17 Purchase LoanWho is Eligible for a CalSTRS 80/17

Employee of California public school / community college• Can work in any capacity• Can work in school district• Pay check stub from public school system

If you are eligible for CalSTRS pension benefits• Provide certificate of eligibility• Do not have to be currently employed

Any eligible borrower makes family eligible

CalSTRS 80/17 Purchase LoanWhy CalSTRS 80/17 is better than FHALower Down Payment than FHA

3.5% minimum for FHA3% required for CalSTRS

Interest Rates as compared to FHASet by CalSTRS – Cannot be manipulated by lendersFHA rates are set by lender and can vary greatly

No UPFRONT Mortgage Insurance Premium

No MONTHLY Mortgage Insurance

CalSTRS 80/17 Purchase LoanHome buyer requirements

There are no income limits or maximums

You do not have to be a first time homebuyer

You or spouse cannot own any other properties

Minimum FICO Scores 620 for Loan Amounts up to $400,000 680 for Loan Amounts up to $650,000Combined 1st & 2nd Loans

CalSTRS 80/17 Purchase LoanMax Loan Amounts

Conforming Loan Amount Up to $417,000 - First mortgage loan amount$521,250 Max Purchase Price

Jumbo Loan Amount Up to $536,082 - First mortgage loan amountMax total loan amounts $650,000Up to $670,103 Max Purchase Price

Jumbo interest rate is typically 1% higher

CalSTRS 80/17 Purchase LoanProperty Qualifications

Eligible Properties Single Family Residence - DetachedCondominiums / Townhomes - AttachedPlanned Urban Development (PUD)

Must be owner Occupied

Must be located in State of California

Cannot own any other properties

Mobile home in a park is not considered real property

CalSTRS 80/17 Purchase LoanThe “Secret weapons” of this loan programMax 1st Loan Amount - 80%

Qualify on 80% OnlyIncreases your purchasing power

Max 2nd Loan Amount - 17% No payments for first 5 years

30 Year fixed rate loan only

Same interest rate for both loans

One time free float down – both loansIf the rates drop – you may lower your rate

CalSTRS 80/17 Purchase LoanDemystifying the deferred second loan

How the payments are calculatedDeferred payments for 5 YearsSimple interest accrues for deferred period Accrued interest added to principle balance Fully amortized over remaining 300 months

No surprises guarantee – Payment cannot changeYou will always know the total payment beginning on the 61st month.

CalSTRS 80/17 Purchase LoanExample Based on $300,000 Purchase Price $51,000 loan amount x 5.375%* interest rate $2,741.25 annual accrued interest

x 5 years deferral period$13,706.25 total accrued interest for 5yrs

+ $51,000 original loan balance$64,706.25 61st month new total principle with deferred interest

+ $144.920 15 days interim interest – attend “Closing Costs”$64,841.17

$64,841.17 Amortized for 25 years = $393.42 payment

*Interest rates can change daily and without notice – This is only an example

CalSTRS 80/17 Purchase LoanCosts Controlled by CalSTRS

Cannot buy interest rate downBelow market / Set by CalSTRS

Cannot “roll in” closing costs into rate

Fannie Mae – Pricing AdjustmentsDeclining Market - .25%Risk based credit score pricing - None at 740 FICO

Potentially lower cost than FHA - may require more money brought to the closing table

Broadview Community AccessSometimes CalSTRS is not the best option

If loan level price adjustments increase closing costs to unaffordable level

If all of down payment is coming from gift from relative

If you require a co-signer to qualify to buy a home

If you or your spouse are on title of other property

Broadview Community Access Affordable Mortgage

Broadview Community AccessAffordable Home Purchase Program

Reduced upfront closing costsNo increase in closing cost if credit below 740Same rate as CalSTRS 80/17 lower out of pocket cost

Reduced lender feesMaximum lender fees $350No processing or underwriting fees

Eligible for more flexible FHA qualifying guidelinesMinimum 620 credit scoreCan use non-occupying co-signer to qualify100% of down payment and closing costs as gift

Get Educated – Be Empowered“Red Flags” – Avoid Misinformation

Benefit specific members of the education community

CalSTRS loans have fixed rates and fees Interest rates set daily by CalSTRSOrigination fees set by CalSTRS Can not charge discount points for rate

There have been many instances of lenders / real estate agents misleading or misinforming buyers

Ignorance is ok – Not knowing is not unethicalPushing FHA to make more money is common

Get Educated – Be Empowered“Red Flags” – Identify Bait & Switch

Agent recommends lender but not programAn educated agent or lender will empower you

FHA is first option or as result of a qualifying “problem”

GFE does not accurately reflect closing costsFannie Mae CA market fee - .25%Credit Score 740 or less - ?%Max 1.25% origination – No discount points allowed

Not all approved lenders/brokers are expertsAsk your loan officer how many they have closed

The Next StepHiring your Real Estate Agent & Lender TeamThe decision to work with a Loan Officer and Real Estate Agent is a decision to hire someone for a professional service it is to be taken very seriously

Hold your team accountable to high expectations of character, communication and expertise

A quality home buying team will educate and inform you

Always avoid pressure tactics and implied urgency

Make sure your team specializes in the programs that you are interested in to purchase your home

The Next StepWhat you need to get Pre-Approved

Income documents you will need to show your lenderLast 30 days pay stubs for all buyersLast 2 years W2’s for all buyers2 yrs tax returns IF non W2 income or expenses

Asset documents you will need to show your lenderLast 60 days statements for all reserves including checking, savings, 401K, stocks, bonds

Tell your loan officer if you plan to use Gift Funds Incorrectly receiving or documenting gift funds could cause delays or problems closing on purchase

About Broadview MortgageWe are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs

We want the opportunity to be your lender if you have not already chosen one

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

If you are not working with an Agent, we can recommend a qualified Real Estate Agent in your area that shares our values and expertise

We are committed to Educating and Empowering homeowners, Please ask us about other homeownership education classes

Got Questions?

GetAnswers

You are being empowered by

Broadview Mortgage - Katellawww.HomeownershipUniversity.comCell/Text: 714-336-8286Office: 866-667-6724Email: CalSTRS@BroadviewMortgageCorp.com

Thank you for attending