1. VA Benefits Briefing This document contains U.S. Department of Veterans Affairs proprietary business information and may not be reproduced without permission. VA Benefits Briefing Department of Veterans Affairs Loan Guaranty Briefing Maine Affordable Housing Conference October 30, 2013

2. VA Benefits Briefing Cleveland Regional Loan Center Cleveland VA Regional Loan Center 1240 E. 9 th Street Cleveland, OH 44199 States of Jurisdiction: Connecticut, Delaware, Indiana, Maine, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Vermont (800) 729-5772 – option 4 (underwriting, new lenders, auditing, etc.) vahomesite@va.gov (800) 729-5772 – option 2 (appraisal questions, condos, builder ID’s, etc.) 325cnv@va.gov Cleveland RLC Website: http://www.vba.va.gov/ro/cleveland/index1.htm National VA Loan Guaranty Website: http://www.benefits.va.gov/homeloans/ 2

3. VA Benefits Briefing Primary Benefits of VA Home Loans 100% financing of the sales price or value, whichever is lower, generally up to $417,000 (some states do have high cost counties which exceed this) No PMI or VA Funding Fee if the Veteran is in receipt of compensation from VA monthly for a Service Connected Disability VA funding fee can be rolled into financing Fixed rate and adjustable rate mortgages Can be used in conjunction with a housing program administered by a state, county, or municipal government entity without VA approval (fees ≤ $250) Seller can typically pay all closing costs Veteran can close on an Interest Rate Reduction Refinance Loan (IRRRL) with no money out of pocket Refinances may be for 100% of the appraised value + VA Funding Fee + Energy Efficient Improvements Fully assumable by any qualified borrower 3

4. VA Benefits Briefing VA Loan Products  Purchase Loans help you purchase a home at a competitive interest rate often without requiring a down payment or private mortgage insurance. Veteran can purchase VA approved condominium/townhouse, single family home, up to 4 attached unit properties, and farm residences.  Interest Rate Reduction Refinance Loan (IRRRL) also called the Streamline Refinance Loan can help you obtain a lower interest rate by refinancing your existing VA loan.  Cash Out Refinance loans allow you to take cash out of your home equity to take care of concerns like paying off debt, funding school, or making home improvements up to 100% of value. Must have at least a $1 lien against property.  Energy Efficient Improvements can be added onto the 100% financing 4

5. VA Benefits Briefing Eligibility Requirements for Home Loan Guaranty Service requirements vary based on when the applicant served. Generally, an applicant must: – Serve 181 continuous days during peacetime during certain periods prior to September 1980, or 2 years after September 1980 with at least a discharge under honorable conditions – If currently serving on full time active duty, at least 90 days is required with an acceptable character of service – It may be possible to have served less then 2 years on active duty if discharged for a service-connected disability – National Guard and Reserve members generally have to have 90 days of active duty service under Title 10 or six years in the Selected Reserve or National Guard actively participating with an honorable discharge The applicant must have a Certificate of Eligibility (COE) from VA that verifies his or her military service to the lender to qualify for a VA-backed loan. The Veteran may be able to obtain a COE through eBenefits at www.eBenefits.va.gov or the Lender directly through WebLGY in the Veterans Information Portal. You may also still have the Veteran complete and mail VA Form 26-1880 to the Atlanta Eligibility Center. www.eBenefits.va.gov 5

6. VA Benefits Briefing Recent Changes? SAR training is available on-line Process for Determining Spousal Income Qualifications in Jurisdictions that Recognize Same-Sex Marriages Portal Security Functions Not much…this is VA after all! For the latest changes, go to VA’s Lender website: http://benefits.va.gov/homeloans/lenders.asp 6

7. VA Benefits Briefing What are the Differences When Qualifying a Person? Automated underwriting is allowed but if sent in for prior approval by VA, full documentation is required We still have the residual method which does consider child care expenses, maintenances, utilities and taxes No minimum credit score, but generally the Veteran must not have derogatory credit within the past twelve months If the Veteran does not have standard credit trade lines, we will consider alternative credit references, i.e. rent, utilities or car insurance payments We do not require reserves unless there is rental income involved which is required for qualification purposes Only the Veteran and his/her spouse, can be included for guaranty purposes of the loan. Co-signors will reduce your guaranty. Military Personnel must be under contract for a year from the date of closing 7

8. VA Benefits Briefing Transitioning from a Refinance World to a Purchase World 99% of all VA loans underwritten by lenders with “automatic” authority (similar to Direct Endorsement) VA has no bottom line credit score Very important that lenders understand that military service time is not considered employment history, but what earned the Veteran their benefits 2 year post military employment history required in most cases, but consideration can be given to 12 month employment history Waiver of employment history if Veteran obtains a position related to military training (military police to police officer, field medic to a nurse/paramedic, computer programming, Air Force pilot to a commercial pilot, etc.) General rule of thumb for qualifying is a maximum of 41% debt to income ratio and meet VA’s residual income guidelines (AUS systems may accept higher ratios) 8

9. VA Benefits Briefing VA Properties VA no longer allows pure mobile homes. Homes must now be permanently attached to a foundation and titled as real estate. No mobile home parks or land rental allowed. 1-4 family units, which are safe, sound and sanitary Condominium or condex projects require VA approvals prior to closing, not PUD’s. Processing time is 4-6 weeks currently New Construction, every builder must be registered with VA SAR approval process, data on-line at http://benefits.va.gov/homeloans/appraiser_sar.asp http://benefits.va.gov/homeloans/appraiser_sar.asp Valuation Department can be reached at 800-729-5772, option 2 or 325cnv@va.gov 9

10. VA Benefits Briefing Loan Management  Since 2009, VA has assisted over 291,000 borrowers in default avoid foreclosure. These resolved delinquencies resulted in over $9.6B in potential claim savings, while assisting with the Secretary’s goal to end Veterans homelessness.  In FY12, VA helped 81 percent (nearly 70,000) Veterans in default retain their homes or avoid foreclosure, while making over 505,000 calls to Veterans and their servicers.  Default Resolution Rate has remained strong despite a troubled housing market. Since implementation: FY09: 71.5%, FY10: 76.3%, FY11: 83.0%, FY12: 81%  VA has 9 Regional Offices with 149 staff trained to help delinquent Veteran borrowers find successful resolutions.  For the last 21 quarters (5 years) VA has had the lowest foreclosure rate (1.88%) of all loan types: Prime (2.13%), Subprime (11.01%) and FHA (3.68%). 10 Message: VA helps Veteran borrowers retain their home or avoid foreclosure during times of financial difficulty, reducing the risk of homelessness.

11. VA Benefits Briefing Thank You Thank you for assisting our Veterans, Service Members and their families. We are lucky to have them and VA appreciates your participation in our home loan program! 11