Desktop Underwriter is a registered trademark of Fannie Mae. Loan Prospector is a registered trademark of Freddie Mac. This presentation is a summary and is not complete. This information is for mortgage professionals only and should not be distributed to or used by consumers or other third-parties. Information is accurate as of the date shown below and is subject to change without notice. 1/22/2015 FANNIE MAE 97% LTV OPTIONS Program Training Offered by… FIRST MORTGAGE CORPORATION January 22, 2015

AGENDA  Introduction  Available 97% Programs  Eligibility Guidelines  Program Guidelines  Underwriting Guidelines  Pricing and Fees  FMC Resources and Support 2 97% LTV OPTIONS PROGRAM

Introduction to the… 97% LTV OPTIONS PROGRAM 3  According to consumer research conducted by Fannie Mae, the primary barrier to homeownership for first-time home buyers is saving money for the down payment and closing costs.  In support of ongoing efforts to expand access to credit and support sustainable homeownership, Fannie Mae offered the 97% LTV/CLTV/HCLTV financing to help home buyers who would otherwise qualify for a mortgage but may not have the resources for a larger down payment.  In addition, Fannie Mae is offering this same program to existing Fannie Mae borrowers.  These options are designed to help serve creditworthy borrowers and expand business opportunities. 97% LTV OPTIONS PROGRAM

Available 97% LTV OPTION PROGRAMS… 4 1.Non-MCM Program – Regular 97% LTV Standard Program  Purchase transactions if at least one borrower is a First-Time Homebuyer  Standard Limited Cash-Out Refinance Option for existing Fannie Mae loans  No Income Limits, No Counseling required 2.MyCommunityMortgage (MCM) Program – See separate Training coming soon…  Purchase transactions only if at least one borrower is a First-Time Homebuyer  Lower MI  Standard LLPA of.75%  Income Limits apply  Counseling required 97% LTV OPTIONS PROGRAM

97% STANDARD PROGRAM Eligibility Guidelines Program Guidelines Underwriting Guidelines

Eligibility Guidelines PURCHASE 6 Eligible Borrowers  Must be a First Time Home Buyers At least 1 borrower must be a FTHB FTHB is defined as someone who has not owned any residential property in the last 3 years Income Limits  No Income Limit required Minimum MI Coverage  18% + MI Loan-Level Price Adjustment or 35% Home-buyer Education and Counseling  Not required Minimum Borrower Contribution  Standard contribution requirements apply Pricing  Standard risk-based LLPAs Based on credit score and LTV range 97% LTV OPTIONS PROGRAM

Eligibility Guidelines REFINANCE (Limited Cash-Out) 7 97% LTV OPTIONS PROGRAM Existing Loan  Loan must be owned (or securitized) by Fannie Mae Documentation may come from the current servicer, Fannie Mae’s loan lookup tool, or any other eligible source Minimum MI Coverage  18% + MI Loan-Level Price Adjustment or 35% All other guidelines  Follow standard limited cash-out refinance guidelines Pricing  Standard risk-based LLPAs Based on credit score and LTV range

Eligibility Guidelines cont’d… 8 Eligible Properties  1 Unit SFR  FNMA Eligible Condos  FNMA Eligible PUDs Ineligible Property / Loan Types  Manufactured Homes  2-4 Unit Properties  2 nd Homes  Investment Properties  High Balance loans  ARM loans 97% LTV OPTIONS PROGRAM

Program Highlights TopicDescription Program Types  Up to 30 Year Fixed Rate Only LTV  to 97% LTV CLTV  to 97% if subordinate lien is NOT a Community 2 nd  105% if subordinate lien is a Community 2 nd  HCLTV: to 97% Maximum Loan Amounts  $417,000 Maximum Occupancy Type  Primary Residence Loan Purpose  Purchase Transactions  No Cash-Out Refinances 9 97% LTV OPTIONS PROGRAM

Sample MI MATRIX MGIC – ALL States except WA 10 97% LTV OPTIONS PROGRAM

Underwriting Guidelines 11 97% LTV OPTIONS PROGRAM TopicDescription Underwriting Method  Desktop Underwriter (DU) required Must have an Approve/Eligible recommendation Manual UW  Not allowed DTI  Follow DU Approval Down Payment & Closing Costs  Follow standard FNMA guidelines. Eg., gifts, grants, Community 2nds in addition to borrower’s own funds Reserves  As determined by DU. May come from eligible gifts.

Underwriting Guidelines 12 97% LTV OPTIONS PROGRAM TopicDescription PURCHASE: DU Input  1003 in DU must show at least 1 borrower is a FTHB  Section VIII of Form 1003 will indicate FTHB requirement LCOR: DU Input  Select Fannie Mae in the “Owner of Existing Mortgage” field  Additional Data Screen in the Full 1003

INTEREST RATES/FEES Rates and Fees Reminders FMC Support

Interest Rates & Fees TopicGuidelines Interest Rates  See Page 3 of the FMC Rate Sheet Origination Fees  No max required - Follow new HUD RESPA rules Discount Fees  Buyer or Seller Discounts allowed subject to consumer laws – Discount Points allowed only for loan level price adjustments (subject to FMC’s discretion) Rebate/Discount Pricing  See FMC rate sheet Allowable Fees  Must be reasonable and customary and fully disclosed to the borrower in accordance with all agencies, federal, state and local laws  See FMC fee sheet for our lender fees 14 97% LTV OPTIONS PROGRAM

FMC SUPPORT 15 97% LTV OPTIONS PROGRAM TRAININGS First Mortgage offers FREE Weekly ONLINE Trainings See the FMC website for the January 2015 Training schedule Trainings for January 2015:  1/13 – FMC Product Overview  1/15 – ACCESS/FIRSTDOWN Program  1/20 – NEW: HomeStyle Program Training – RETAIL/BUILDER Only  1/22 – NEW: 97% LTV Program Training SUPPORT TEAM RETAIL: Contact your FMC Loan Help Team Wholesale Brokers / Correspondent Lenders: Contact your FMC Account Executive For help with:  Guidelines  Program questions  Scenarios  Pricing / Fees  Loan Submissions  Trainings FMC WEB SITE  Rate Sheets  Matrices  FMC Overlays  Training Schedule/Materials  Guidelines  Forms  Marketing  Tools  Calculators

On behalf of First Mortgage, thank you for joining today’s training and we hope the information provided will help you build your business! The main purpose of First Mortgage Corporation’s (FMC) training documents is to assist real estate and mortgage professionals in developing entry-level competence with loan programs. While FMC staff, employees, contractors and contributors take care to ensure the accuracy of the content of training documents, FMC makes no warranties as to the accuracy of the information contained within these materials. Furthermore, every user of this material uses it understanding that he or she must still conduct his or her own original legal research, analysis and drafting. In addition, every user must refer to the relevant legislation, case law, administrative guidelines, rules and other primary sources. FMC specifically disclaims any liability for any loss or damage any user may suffer as a result of information contained within this training material. While the information contained in FMC’s training material addresses guidelines and issues surrounding mortgage programs, these materials do not constitute legal advice. All non-legal professionals are urged to seek legal advice from a lawyer. THANK YOU FOR YOUR BUSINESS… 16 97% LTV OPTIONS PROGRAM