1. © Copyright Inlanta Mortgage, Inc © Copyright Inlanta Mortgage, Inc 203(k) Informational Seminar P Presenter: Dan Frio Trusted Mortgage Professional Inlanta Mortgage 477 E. Butterfield Rd. Ste. 308 Lombard, IL 60148 Phone: 630-435-4616 Fax: 630-206-1071

4. © Copyright Inlanta Mortgage, Inc © Copyright Inlanta Mortgage, Inc 203(k) Informational Seminar P Target Markets: 1. Buyers purchasing a home in need of rehabilitation: - may be REO's, foreclosures, or short sales - incomplete renovations - out-dated kitchen, bathroom, etc... - unfinished basement 2. Listing - home may be a REO, foreclosure, or short sale - show potential buyer benefit of 203k loan - sell a home that has been on the market for some time

5. © Copyright Inlanta Mortgage, Inc © Copyright Inlanta Mortgage, Inc 203(k) Informational Seminar P Program Eligibility: 1. Down Payment - - 3.5% of total amount of purchase plus costs of repairs 2. Seller contributions - seller may contribute 3% of purchase prices toward closing cost and prepaids 3. Purchase of owner occupied primary residence - attached and detached single family, condos, and PUDs - 2 to 4 units - REO owned properties

6. © Copyright Inlanta Mortgage, Inc © Copyright Inlanta Mortgage, Inc 203(k) Informational Seminar P FHA 203(k) Streamline: - Allow buyer to finance up to $35,000 into their mortgage for improvements - Minimum $5000 rehabilitation amount - Allowed on limited improvement types - can be 100% cosmetic improvements - can not be used for structure repairs or improvements - No 203(k) consultant is need

7. © Copyright Inlanta Mortgage, Inc © Copyright Inlanta Mortgage, Inc 203(k) Informational Seminar P FHA 203(k) Standard: - Allows buyer to make larger and structural improvement to the home - No limit on repair amount -Minimum $5000 rehabilitation amount -A 203(k) consultant is needed

8. © Copyright Inlanta Mortgage, Inc © Copyright Inlanta Mortgage, Inc 203(k) Informational Seminar P Loan Process: Step one: Buyer locates property in need of repair. Writes offer and offer gets accepted Step two: Home inspection is schedule with 203(k) consultant. Improvements are determined by buyer and consultant. (note: consultant is not need for a streamline) Step three: Consultant or borrower completes work write-up and prepares contractor bid packages to obtain cost estimates Step four: Appraiser uses work write up to determine “as-is” and “improved” value Step five: Loan closes and buyer becomes owner of the house Step six: Work is started within 30 days of closing and completed within six months.

9. © Copyright Inlanta Mortgage, Inc © Copyright Inlanta Mortgage, Inc 203(k) Informational Seminar P Eligible Improvements: Virtually any kind of improvement is eligible provide that it becomes a permanent part of the real property and adds value. Eligibility may differ between a Standard FHA 203(k) and a Streamlined loan. Example of improvements: - additions to the structure - kitchen or bath remodels - finished basement or attic - patios, decks, or terraces - roofing and landscaping - safety, energy efficiency and electrical upgrades - handicapped accessibility upgrades Luxury items such as swimming pools, hot tubs, tennis courts, barbecue pits, gazebos, saunas, or alteration to support commercial use are not eligible.

10. © Copyright Inlanta Mortgage, Inc © Copyright Inlanta Mortgage, Inc 203(k) Informational Seminar P Tips for making the process easier: 1. A 203(k) loan will take any where from two to three months to close. Make sure you set your closing date out far enough to allow enough processing time of the loan. 2. Always use a 203(k) consultant for the home inspection. Even though a consultant isn't needed on a streamline 203(k), a loan can always start out as a streamline and be switched to a full. By using a 203(k) consultant for the home inspection from the beginning you could save your client the cost of a second home inspection. 3. From the beginning make sure that everyone involved in the process realizes that the transaction will be financed with a 203(k) loan.

11. © Copyright Inlanta Mortgage, Inc © Copyright Inlanta Mortgage, Inc 203(k) Informational Seminar P Notes:

12. © Copyright Inlanta Mortgage, Inc © Copyright Inlanta Mortgage, Inc 203(k) Informational Seminar P Notes: