1. Offered through FIRST MORTGAGE CORPORATION CHF ACCESS Training 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. 6/12/2013

2. Agenda Introduction CHF Access Programs – Program Highlights – Income Calculation – Eligibility Guidelines – Underwriting Guidelines – Access Fees What’s New? Upcoming changes… Marketing & Support Since 1975, First Mortgage Corporation has been opening doors to the American Dream. It’s all we do and we do it well. Discover today why First Mortgage Corporation is your First Time Home Buyer and Down Payment Assistance Headquarters! Don’t wait! Call us today!

3. INTRODUCTION First Mortgage Corporation Who is CHF? State Restrictions Market Challenges & Access Solution

4. Introduction to First Mortgage Corporation First Mortgage Corporation is an independent residential Mortgage Banking firm with branch offices located throughout the west. Founded in 1975, FMC is a direct-lending mortgage banker approved as a lender and/or loan servicer by the Federal Housing Administration (FHA); the Veterans Administration (VA); the Federal National Mortgage Association (Fannie Mae); the Government National Mortgage Association (Ginnie Mae); the National Homebuyers Fund (NHF); and many other major secondary market institutions. First Mortgage Corporation is currently rated the #5 FHA Lender in CA! Having funded in excess of $20 billion in residential real estate loans, FMC has assisted thousands of families with their mortgage needs. FMC enables families to enjoy the American Dream of Homeownership…“it’s the only thing we do.” FMC has a longstanding tradition of providing unparalleled customer service and a reputation built on adding value to the home loan process. That’s why FMC should be considered…“YOUR FIRST LENDING RESOURCE”.

5. Introduction to CHF  Who they are … ◦ In 1993, a group called the “ Regional Council of Rural Counties or RCRC ” (made up of 30 rural counties in CA) formed the California Rural Home Mortgage Finance Authority (CRHMFA) aka as Cal Rural to help increase homeownership opportunities. ◦ In 2002, CRHMFA sponsored the Homebuyers Fund, Inc., now known as CHF.  Who they serve … o Families and individuals who can afford a mortgage loan but do not have the resources for the down payment and closing costs  What they provide … o CHF offers financing up to 99.50% designed to increase homeownership opportunities to low-to-moderate income individuals and families in CA.,

6. SPONSOR: CHF (CRHMFA Homebuyers Fund) PARTICIPANT LENDER & SERVICER: FMC (First Mortgage Corporation) ADMINISTRATOR: NHF (National Homebuyer ’ s Fund) (NHF is strictly providing administrative services; i.e. marketing, training, support, etc.)

7. CHF Programs  CHF “Affordable Housing” Programs: 1.CHF “ACCESS” (Available exclusively through FMC only) 2.CHF “Platinum” (Available through FMC) 3.Mortgage Credit Certificate (Tax Credit available through FMC)  CHF “ACCESS” State Restriction:  FHA Loans: Available throughout CA ONLY! ◦ Available exclusively through First Mortgage ONLY!

8. Today’s Challenges  Seller paid DAPs discontinued (Nehemiah, etc.)  More restrictive guidelines/products  Slow market  Struggling Economy  Maxed out sellers  Higher cost of living = Less money to save Over $7.2 Billion in 1 st & 2 nd loan financing since 1993 (53,000 properties)

9. What “CHF ACCESS” offers  15-Year Fully Amortized 2 nd  Up to 3% of lower of Sales Price or Appraised Value  CLTV up to 99.50%  LITTLE TO NO MONEY OUT OF POCKET 1 st Loan2 nd Loan Home Ownership  FHA up to 96.50% LTV

10. Overview

11. CHF ACCESS PROGRAMS  Eligible 1 st Mortgage Program  Down Payment & Closing Cost Assistance  Sample Calculations  Income Limit Calculation

12. CHF ACCESS Program Topic Program Description State RestrictionAvailable throughout the WHOLE STATE OF CALIFORNIA ONLY! Program TypesFHA 30 Year Fixed Max LTV96.50% Max CLTV99.50% (ACCESS 1 st and 2 nd combined) Maximum Loan Amount Conforming: Up to $417,000 Jumbo: > $417,000 to $729,750 based on county where property is located FHA Loan Limits Loan PurposePurchase OccupancyOwner Occupied Down Payment Assistance CHF ACCESS 2 nd : CAN be used to fulfill the borrower ’ s equity contribution required on FHA 1 st Mortgage

13. CHF ACCESS 2nd Program TopicProgram Description Program TypesCHF ACCESS 2 nd Fixed Term15-yrs Fixed-Rate Fully Amortizing Maximum Loan AmountSized up to 3% of the lower of the Sales Price or Appraised Value Interest Rate8.25% Max CLTV99.50% (ACCESS 1 st and 2 nd combined) Use of Funds  Proceeds may be used for: DOWN PAYMENT CLOSING COSTS Price Adjustments Up Front or Single Premium MI  No cash back to the borrower from the 2 nd loan proceeds Any overage over POCs must be used to reduce principal balance Any overage over $500 results in redraw of loan documents Fees on 2 nd Flat $350.00 plus applicable Escrow and Title Fees on the 2 nd Added to the Underwriting Fee on the ACCESS 1 st

14. Sample Scenario: (Purchase Price: $325,000) Sample 1: Borrower has little or NO money Down - Seller contributing for costs… CHF ACCESS 1st:96.50% ($325,000 x 96.50%) $313,625.00+ CHF ACCESS 2nd (Down Payment):3% ($325,000 x 3%) $9,750.00+ Total Financing 1st & 2nd:99.5% of SP or AV$323,375.00= Borrower Required Down Payment:.5% ($325,000 x.5%) $1,625.00 Borrower Contribution:.50% ($1,625) for DP (Seller pay for Closing Costs) Sample 2: Borrower HAS Down Payment but NO money for Closing Costs... CHF ACCESS 1st:96.50% ($325,000 x 96.50%) $313,625.00+ Borrower Funds (Down Payment):3.5% ($325,000 x 3.5%) $11,375.00+ CHF ACCESS 2nd (Closing Costs):3% ($325,000 x 3%) $9,750.00 Total Financing 1st & 2nd:99.50% of SP or AV$325,000.00= Borrower Contribution: 3.5% ($11,375) for DP

15. Sample Scenario: (Purchase Price: $325,000) Sample 3: Borrower has NO money for D/P OR C/C - Receiving Gift Funds of 5%... CHF ACCESS 1st:96.50% ($325,000 x 96.50%) $313,625.00+ CHF ACCESS 2nd (Down Payment):3% ($325,000 x 3%) $9,750.00 Total Financing 1st & 2nd:99.50% of SP or AV$323,375.00= Gift Funds Received5% ($325,000 x 5%) $16,250.00.5% given for DP0.5% ($325,000 x.5%) $1,625.00 4.5% towards CC4.5% ($325,000 x 4.5%) $14,625.00 Borrower Contribution: ZERO ($0)

16. INCOME LIMITS / CALCULATIONS Program Income Limits Income Limit Calculation Qualifying Borrower Income

17. Program Income Limits TopicGuidelines Income Limit  115% of HUD AMI Website to useTo calculate the Program Income Limit by County, refer to: http://www.huduser.org/datasets/il.html

18. 2013 CHF ACCESS Income Limits

19. Borrower Qualifying TopicGuidelines Borrower Qualifying Income  Qualify Borrower based on Qualifying (Repayment) Income (not Household Income)  Only the income used for Qualifying is considered in order to meet the Program Income Limits. Eg.,  DU Income – Income you input in DU to see if borrower qualifies for loan  UW Income – Income used by UW to calculated Debt to Income Ratios to qualify borrower for loan

20. Sample Qualifying Income Sample: Husband, Wife, 2 kids, Grandma will be moving into home (5 ppl) Who has earned income?  Husband & Wife both work – 2+ yr history  Son works PT – 6 month history  Grandma gets SSI – 2+ yr history Who ’ s going on the loan?  Husband  Wife  Son Who ’ s income do we use to qualify borrower for ACCESS Program? Qualifying Income (ACCESS) USE ONLY INCOME from:  Husband  Wife Do not use income from:  Son: because he doesn ’ t have 2 year required to be effective income  Grandma: because she ’ s not going on the loan

21. ADDITIONAL GUIDELINES Eligibility Guidelines General Underwriting Guidelines Pricing, Costs and Fees

22. Eligibility Guidelines TopicGuidelines Borrower Eligibility  Purchase of Owner-Occupied Primary Residences Only  NO 1 st Time Homebuyer Requirement  MAY OWN OTHER PROPERTIES – must meet FHA requirements Property Eligibility  Single Family Residences  PUD ’ s  FHA Approved Condos  2 Units with 640 minimum fico and 1% hit to price Income Limits 115% of HUD Area Median Income (AMI) – See Income Limit sheet Sales Price LimitsNot Applicable First Time HomebuyerNot Required Non Occupying Co- Borrowers/Co-Signers NOT ALLOWED Homebuyer EducationRequired Minimum Homebuyer Contribution NONE required

23. Underwriting Guidelines TopicGuidelines UnderwritingUW Method:  DU allowed – Must be risk scored by FHA Scorecard  Approve/Eligible recommendation  Manual UW allowed – FMC Overlays apply **Unless specifically specified, Follow Standard FHA guidelines PLUS First Mortgage FHA overlays** Minimum Credit Scores  580+ Fico Score: Maximum Financing allowed  0 Score or Non-Traditional Tradeline borrower: Maximum Financing allowed  Follow HUD 4155 guidelines plus ML 2010-29 PLUS FMC overlays  Price Adjustments apply – See First Mortgage rate sheet Max Debt Ratio **REVISED**  Less than 620 Fico: Up to 43% max DTI  Ficos 620 – 659: Up to 45% max DTI  Ficos 660 or higher: Up to 48.9% max DTI Comp Factors  Ratios > 43% requires a minimum of two (2) strong compensating factors from HUD 4155 Reserves  NONE required Mortgage Ins.  Follow standard FHA MIP

24. UW Guidelines cont’d… TopicGuidelines Seller ContributionsAllowed up to 6% Buy-downsAllowed Gift Funds Allowed from family members – Follow 4155 Other Sources of Assistance Gift Funds 401k loans Grants Prepayment PenaltyNo Prepayment Penalty AssumabilityAllowed per FHA guidelines *** All other requirements – Follow FHA 4155.1 guidelines PLUS FMC overlays***

25. FMC - FHA Overlays (Applies to all FMC products – not specific to ACCESS)

26. FMC - FHA Overlays (Applies to all FMC products – not specific to ACCESS)

27. ACCESS RATES & FEES ACCESS Interest Rates ACCESS Allowable Fees

28. ACCESS Interest Rates

29. ACCESS Fees & Charges TopicGuidelines Interest Rates  Interest Rates available on the FMC Rate Sheet, OR  For Retail – Contact Secondary Marketing  For WS Brokers – Contact your A/E 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 FMC Fees  See doc order form or contact your Branch Manager or (Account Executive for W/S) for lender fees Allowable Fees  Must be reasonable and customary and fully disclosed to the borrower in accordance with all agencies, federal, state and local laws  Follow FMC rules on limitation of fees for FHA loans Fees on 2 nd Flat $350.00 plus applicable Escrow and Title Fees on the 2 nd

30. MISCELLANEOUS What’s New? Upcoming Changes… Marketing Materials – English and Spanish Selling Features FMC Support

31. Funding Process TopicGuidelines Funding Process Due to regulatory requirements, the Access 2nd must be funded by CHF directly. Therefore, ALL CHF Access 2 nd transactions now require an additional 24 hours for the Funding Department review. Prior to requesting the wire from CHF, First Mortgage must verify that all conditions have been cleared. Same day fundings will not be scheduled for Access transactions. In order to provide excellent service for our Access Product the Funding Department will pre-fund the transaction at the time of requesting the wire from CHF.

32. Funding Process cont’d… TopicGuidelines Required Documentation The following documents must accompany the funding request: 1.Escrow Instructions 2.Estimated HUD-1 (for both 1st and 2nd) 3.Copy of FMC Lock Additional Requirements  When funding the Access 2nd mortgage, please ensure that the Note and Deed of Trust are Non-MERS instruments and show CRHMFA Homebuyers Fund as the Lender on the Note and Beneficiary on the Deed. If the docs are drawn through a doc prep vendor, such as DocMagic, please specify that the instruments are Non-MERS documents.

33. Funding Process cont’d… TopicGuidelines Retail / Builder / Wholesale Divisions  Follow the procedures from the previous slides with regards to funding the ACCESS 2nds. Correspondent Division  Please go to the Correspondent website for instructions on the new funding process for ACCESS 2nds, or contact your FMC Account Executive for more details. www.fmccorrespondent.com

34. New ACCESS States… TopicGuidelines Retail / BuilderComing soon….  ARIZONA  NEVADA  TEXAS WholesaleFollowing shortly after Retail / Builder CorrespondentFollow shortly after Wholesale Other statesWill be reviewed and selected after roll out to the three states above

35. Marketing Materials

36. NOT Limited to First Time Home Buyers NO “ Recapture Tax ” if home is sold later NO Sales Price Limits No additional “ Compliance Review ” required Financing available for Down Payment and Closing Costs CLTV ’ s up to 99.50% = little to no money down & no out of pocket closing costs No Minimum Borrower Contribution Required Ratios stretched up to 48.9% DTI 2 Units allowed with minimum 640 fico score Buyer or Seller Discount Fees allowed Selling Features FIRST MORTGAGE

37. FAQ ’ s Frequently Asked Questions is available on the First Mortgage website. Hot Question! Can you refinance the ACCESS program for a lower rate? Is the 2 nd re-subordinated or will it need to be paid off with the new refinanced 1 st mortgage? F A Q ‘ S

38. FMC Support WEB SITE Go to our FMC websites for: 1.RATE SHEETS 2.TRAINING MATERIALS 3.GUIDELINES 4.FORMS 5.CALCULATORS 6.TOOLS 7.MARKETING TRAININGS First Mortgage offers FREE Weekly ONLINE Trainings See June Training Schedule for upcoming Trainings… Trainings for June, 2013: 6/6 – FMC Product Overview 6/12 – CHF ACCESS 6/14 – HARP DU Refi Plus Training 6/18 – HARP DU Refi Plus Repeat Training ??? NHF ACCESS for AZ, NV, TX coming up… SUPPORT Retail: Loan Help Wholesale: Your FMC Account Executive For help with your: Scenarios Pricing / Fees Guidelines Loan Submissions Trainings

39. 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.