1. FHA 203(k) Program Overview
Sagamore Home Mortgage LLC
Presented by – Tom Connors
Account Manager
February 19, 2015

2. Today’s Overview 1 2 3 Where does it fit in today’s market?
What is the FHA 203(k)? 2
How do we start Originating 203(k)’s 3

3. Today’s Market
Always a Market

5. In the News
Harvard’s Joint Center for Housing is projecting a steady growth in remodeling this year
National Mortgage News article points to double digit growth
Continued low interest rates for first mortgages encourage renovation.

6. Where is the market? Any home completed for at least one year
Foreclosures and short sales
Older neighborhoods – outdated homes
Refinance Stated Purpose – Home Improvements
Borrowers with Limited to No Equity

7. Benefits to Borrowers
Can buy location and make the house the way they want it – now
One closing for the mortgage and improvements
Borrower chooses the improvements that are done after closing
Create Equity on Purchase or leverage future value on Refinance loans with little or no equity

8. Advantages to you Differentiate yourself from or eliminate competition
Attract or Retain more Realtors, Customers or builder/remodeler referral sources
Larger loans with better collateral

9. More advantages to you !
Less rate/price sensitive than “commodity” products
Close more loans – nearly every major or minor project imaginable is allowed
Only new swimming pools, hot tubs and other “luxury items” are ineligible

10. 203(k) Program

11. What is the FHA 203(k)?
A fully disbursed 1st Mortgage with escrow established for repairs and improvements
Fixed Home Improvement Plan in place at closing
Not an open ended Equity Loan/Line
Escrow Funds Disbursed at or after closing

12. All 203(k) Loans Purchase and refinance Fixed and Adj. rates
Standard FHA loan limits and MIP
Manufactured Homes
HUD REO & $100 Down
GNND
1-4 Family Owner Occupied- Conversions
Mixed Use & Condos

13. Eligible Improvements?
Additions-expansions -unfinished space
Functional Obsolescence–Deferred Maintenance
Remodel kitchens & baths – flooring
Replace Mechanical Systems or appliances
Windows-siding-roofing - garages, decks and enclosed porches

14. Standard vs. Streamlined 203(k)
Two formats: Standard 203(k) & Streamlined 203(k) (Limited Repair)
Regular FHA loan which incorporates a remodeling plan as part of the mortgage
Loan is saleable and insurable right after closing
Up to six months to complete the renovation

15. Standard 203(k) Not all lenders offer FHA 203(k) Standard
With a consultant and a general contractor, the loan moves more quickly
More projects can be done – Bigger Loans!
Can accommodate changes in plans

16. Streamlined 203(k) Limited Repairs 1 to 3 Specialized Contractors
Fixed remodeling plans
No changes or extensions
Simple uncomplicated projects

17. Extended Benefits Reputation and referrals for success with 203(k)
Consultants: Partners in a successful program
Realtors: Sell more homes faster
Contractors: Better projects with assured payments

18. Microsoft Engineering Excellence
Ready to start with 203(k)?
Microsoft Confidential

19. How do we add 203(k)? Consultants are the key to a successful program
Required for Standard & recommended for Streamlined
Lender Locates FHA Consultants in your lending areas (Lender Select)
Interview and get samples of Work Write- Ups

20. Consultant = Great Resource for you and your customer!
Evaluates the property for required work, suggested work and borrower’s wish list
Does a feasibility study or work write-up and cost estimate or evaluates bids for Streamlined 203(k)
Fee can be financed in the mortgage
Helps the appraiser to “see” the after- improved value for better appraised value

21. What happens next? Pre-Qualify Borrower (Credit is Credit)
Discuss desired repairs & improvements
Educate Borrower on Loan Product via the 203(k) Borrower’s Acknowledgment
Complete the Maximum Mortgage Worksheet
Are they ready for a consultant?

22. Underwriting the 203(k) Credit is credit
Maximum Mortgage Worksheet – includes all the renovation and fees into the loan
After-improved Appraisal includes the project
Screen borrower’s choice of contractor

23. Closing Loan can close in normal time frames
Obtain Building Permits and Contractor begins work on the project
Loan is purchased & escrow established at Platinum Home Mortgage

24. Managed Draw = Platinum
Your Borrower, Consultant, Contractor and other vendors contact or are contacted by Platinum Home Mortgage
We order inspections, title updates etc…….
Anticipate checks – 5 to 7 business days from inspection
Checks sent directly to customer same day request is complete

25. Managed Draw – Continued
We post and pay interest on escrow at .10%
Any financed mortgage payments are automatically applied when due
We provide the customer and you with ongoing accounting
We manage towards final completion, final accounting and case close out

26. PHMC Customer Focus
Our Turn Around Times are always same day or next day on each step in the process
Our goal is a completed project and a satisfied customer, Realtor, Builder/Remodeler
You maintain your excellent reputation in market & gets referrals!

27. Questions? Tom Connors Account Manager tom.connors@phmc.com
Direct: x213 Toll Free: x213
Doug Woodley Product Support Representative
Direct: x Toll Free: x212