Buyer Information Packet - Keller Williamsimages.kw.com/docs/1/...Buyer_s_Information_Packet.pdf ·...
Transcript of Buyer Information Packet - Keller Williamsimages.kw.com/docs/1/...Buyer_s_Information_Packet.pdf ·...
Buyer Information Packet
welcomeThe American Homeownership Initiative turns renters into homeown-
ers using an alternative financing system AHI brings together real
estate professionals major American corporations and other resources
for a national program that provides homeownership opportunities
wwwrealtororglibrarylibraryfg302The Impact of Housing on Community A Review of Scholarly Theories and Empirical Research (Joint Center for Housing Studies of Harvard University Mar 2006)
The current economic crisis and
distressed mortgage system can
make purchasing a home frustrat-
ing and complex Large down
payments closing costs mortgage
qualification and the closing process
have become increasingly difficult
This booklet is designed to educate
you the buyer about how AHIrsquos
system and working with your local
Real Estate Professional can
make your dream of homeowner-
ship a reality
Studies have shown in areas with
high homeownership rates that
health safety education and overall
quality of life improves greatly
while crime and unemployment
rates typically decline
The Challenge of the Conventional Mortgage
In most home sales a buyer agrees to purchase a
property at a set price The buyer obtains a mortgage
from the lender and along with the down payment
pays the seller and closing costs and gets the title to
the property If a certain number of payments are
missed the lender forecloses on the loan and reclaims
the property
The most widely used mortgage is paid over 30 years
at a fixed interest rate
The lending process has become increas-
ingly complex as it evolves Costs associ-
ated with a traditional mortgage include
Title insurance to guarantee no prior
mortgages or liens exist
Lender points
Survey to confirm the dimensions and
location of the property
Appraisal confirm the selling price is equal
to or less than the propertyrsquos actual value
To qualify for a traditional mortgage
lenders look at a set of specific criteria
Down payment
Credit score
Two years of income tax returns W2 1099
Current debt and assets
Two months of bank statements showing
down payment
American Homeownership Initiative (AHI) Process
The Installment Sales Agreement (ISA) also referred to as a contract for deed or a land sales con-
tract is used to buy and sell real estate It is a contract directly between the buyer and seller for
the transfer of equitable title and possession rights The actual deed is then transferred when the
contract is paid off either over time or if the buyer refinances with a conventional mortgage It
was widely used before 1950 throughout the country
1 The AHI Seller working with
an AHI Registered Real Es-
tate Professional offers the property
for sale with price down payment
amount interest rate and contract
term pre-set
2 The AHI Buyer can negotiate
as they wish on these terms
3 AHI Buyer and AHI Seller
agree on the contract amount
4 The Real Estate Professional
prepares the paper work
which the AHI Buyer and AHI
Seller sign at closing
How the AHI process works
5Closing elements include
AHI Buyer receives equitable title on day one
An assignment of the contract and recognition letter is provided to
the AHI Sellerrsquos existing bank and title insurance provider
AHI recommends using a 30-yearfixed interest rate based on the
current mortgage rate
6 After closing
AHI Buyer receives tax benefits from home ownership and savings
are reflected in paycheck after adjustments to W-4 (see your local tax
professional)
AHI Buyer pays AHI Seller a monthly payment
No pre-payment penalties if the AHI Buyer refinances
Contract can be assigned to another buyer with seller approval
AHI Buyerrsquos termination of the ISA contract eliminates future
obligations
About the AHI Process
In the early 90s a principal for the
Initiative successfully directed the
conversion of several large apart-
ment buildings to owner-occupied
individual condominiums for the
Philadelphia developer Historic
Landmarks for Living An innova-
tive seller-financing program was
used that featured simplification of
the tenantbuyerrsquos purchase with
low down payments and the ISA for
immediate homeownership
AHI has been created by a group
of professionals working with large
national companies to implement a
similar program on a national basis
To implement the program AHI
provides detailed specific and edu-
cational information to local real
estate professionals to work with you
and the current property owner
Purchase of home for about the same monthly cost as renting
with a down payment of 1-4 and closing costs paid by the AHI
Seller
The AHI Buyer to build credit through reporting timely monthly
payments to credit bureaus using Mortgage Access Corporation
(MAC) or another similar service
Investment in a city and community as an owner
The AHI Buyer to get homeownership tax benefits
The AHI Process Enables
AHI Buyer Benefits
Homeownership though equitable title at closing
Low down payment usually 1-4 of the home value
AHI Calculated Sales Price is based on local market rents
Closing costs are paid by the AHI Seller
First-time home buyer may have a tax credit up to
$8000 (2009 only)
Tax deductions for mortgage interest and property taxes
First-time Home buyer Tax Credit of $8000httpwwwfederalhousingtaxcreditcom site released by the National Association of Home Buildershttpwwwirsgovnewsroomarticle0id=20467100html site released by the United States Internal Revenue Service
Better approach than the typical rent-to-own
and lease-to-own options
Credit repair if necessary
Positive credit reporting
AHI Buyer is working towards building equity
with each payment
Fixed monthly payments based on a 30-year
contract
Refinance at a lower rate if applicable
No prepayment penalty
Termination of contract without credit damage
or foreclosure
Contract is assumable with certain restrictions
Down Payment and typical closing costs for a home purchase
In the AHI system it is recommended the seller pay
all closing costs Previously these costs were typically
shared between buyer and seller
Examples of such costs for a $150000 purchase are
Summary of Closing Costs
Mortgage Costs Loan Origination Fee
Appraisal Fees
Processing Fees
Title Charges
Settlement or Closing Fee
Title InsuranceTitle Fees
Real Estate Taxes
Recording Fee
City Transfer Tax
State Transfer tax
Down Payment
Total Cash Needed to Close
AHI Process
0
0
0
0
0
0
Determined at closing
0
0
0
$3000
$3000
Conventional Mortgage Loan (FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$4500 (3)
$12230
Conventional Mortgage Loan (non-FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$30000 (20)
$37730
Typical monthly payment and tax savingsThe AHI Buyer can deduct interest and property tax from their Federal
Income Tax Since this benefit varies with individuals and states a tax
specialist should be consulted for each situation Example
Contract Monthly Payment
AHI Calculated Sales Price
Down Payment (Percent)
Down Payment (Dollars)
Purchase with 30yrFixed 6
Monthly Contract Payment
Monthly Real Estate Taxes
Monthly Homeowners Insurance
Monthly Maintenance
Monthly Total Payment
Estimated Tax Savings
Mortgage Interest Paid
Real Estate Taxes Paid
Medical Expenses Paid
Charitable Expenses Paid
Tax Preparation amp Job Expenses
Total Itemized Deductions
Standard Deduction
Excess Itemized Deductions Less
Monthly Tax Savings for AHI Buyer 25
Rate (Itemized Divided by 12 Months Multi-
plied by 25 Tax Rate)
Monthly Total
Monthly Tax Savings for ISA Buyer
Monthly Payments after Deductions
1
$75000
20
$1500
$73500
$441
$83
$75
$50
$649
$4451
$1000
$200
$200
$500
$6351
$5450
$901
$19
$649
-$19
$630
2
$150000
20
$3000
$147000
$881
$83
$75
$50
$1090
$8902
$1000
$200
$200
$500
$10802
$5450
$5352
$111
$1090
-$111
$978
3
$250000
20
$5000
$245000
$1469
$83
$75
$50
$1702
$14837
$1000
$200
$200
$500
$16737
$5450
$11287
$235
$1702
-$235
$1467
PricingHow is the price for each home
determined
The Real Estate Professional works with the AHI Seller
to determine the AHI Calculated Sales Price The Real
Estate Professional uses local market rents to calculate
the purchase price
How is the interest rate determined
AHI recommends that the interest rate be fixed for the
30-year term This means the AHI Buyer will have
the agreed upon interest rate for the entire length of the
ISA contract or until refinance
AHI Buyerrsquos ability to terminate the contract
Things happen Situations change The AHI Program provides a way to
protect your future ability to purchase a home or apply for credit What
does it mean It means no foreclosure If at any time you canrsquot make your
payments or you simply wish to move the AHI Seller can (with certain
restrictions) transfer the ISA to a new buyer The AHI Buyer also has the
right to sell the property ldquoconventionallyrdquo at any time
Job Loss Protection
AHI has arranged for the AHI Seller to buy optional job loss insurance
through the HELP program for up to six months of contract payments
if the buyer involuntarily loses their job
AHI Buyer Benefits
AHI has built a group of nationally recognized and respected corporate
product and service providers to enhance the buying experience AHI
Buyer Benefits are provided to the AHI Buyer at closing The portfolio
delivers discounts on superior products and services
welcomeThe American Homeownership Initiative turns renters into homeown-
ers using an alternative financing system AHI brings together real
estate professionals major American corporations and other resources
for a national program that provides homeownership opportunities
wwwrealtororglibrarylibraryfg302The Impact of Housing on Community A Review of Scholarly Theories and Empirical Research (Joint Center for Housing Studies of Harvard University Mar 2006)
The current economic crisis and
distressed mortgage system can
make purchasing a home frustrat-
ing and complex Large down
payments closing costs mortgage
qualification and the closing process
have become increasingly difficult
This booklet is designed to educate
you the buyer about how AHIrsquos
system and working with your local
Real Estate Professional can
make your dream of homeowner-
ship a reality
Studies have shown in areas with
high homeownership rates that
health safety education and overall
quality of life improves greatly
while crime and unemployment
rates typically decline
The Challenge of the Conventional Mortgage
In most home sales a buyer agrees to purchase a
property at a set price The buyer obtains a mortgage
from the lender and along with the down payment
pays the seller and closing costs and gets the title to
the property If a certain number of payments are
missed the lender forecloses on the loan and reclaims
the property
The most widely used mortgage is paid over 30 years
at a fixed interest rate
The lending process has become increas-
ingly complex as it evolves Costs associ-
ated with a traditional mortgage include
Title insurance to guarantee no prior
mortgages or liens exist
Lender points
Survey to confirm the dimensions and
location of the property
Appraisal confirm the selling price is equal
to or less than the propertyrsquos actual value
To qualify for a traditional mortgage
lenders look at a set of specific criteria
Down payment
Credit score
Two years of income tax returns W2 1099
Current debt and assets
Two months of bank statements showing
down payment
American Homeownership Initiative (AHI) Process
The Installment Sales Agreement (ISA) also referred to as a contract for deed or a land sales con-
tract is used to buy and sell real estate It is a contract directly between the buyer and seller for
the transfer of equitable title and possession rights The actual deed is then transferred when the
contract is paid off either over time or if the buyer refinances with a conventional mortgage It
was widely used before 1950 throughout the country
1 The AHI Seller working with
an AHI Registered Real Es-
tate Professional offers the property
for sale with price down payment
amount interest rate and contract
term pre-set
2 The AHI Buyer can negotiate
as they wish on these terms
3 AHI Buyer and AHI Seller
agree on the contract amount
4 The Real Estate Professional
prepares the paper work
which the AHI Buyer and AHI
Seller sign at closing
How the AHI process works
5Closing elements include
AHI Buyer receives equitable title on day one
An assignment of the contract and recognition letter is provided to
the AHI Sellerrsquos existing bank and title insurance provider
AHI recommends using a 30-yearfixed interest rate based on the
current mortgage rate
6 After closing
AHI Buyer receives tax benefits from home ownership and savings
are reflected in paycheck after adjustments to W-4 (see your local tax
professional)
AHI Buyer pays AHI Seller a monthly payment
No pre-payment penalties if the AHI Buyer refinances
Contract can be assigned to another buyer with seller approval
AHI Buyerrsquos termination of the ISA contract eliminates future
obligations
About the AHI Process
In the early 90s a principal for the
Initiative successfully directed the
conversion of several large apart-
ment buildings to owner-occupied
individual condominiums for the
Philadelphia developer Historic
Landmarks for Living An innova-
tive seller-financing program was
used that featured simplification of
the tenantbuyerrsquos purchase with
low down payments and the ISA for
immediate homeownership
AHI has been created by a group
of professionals working with large
national companies to implement a
similar program on a national basis
To implement the program AHI
provides detailed specific and edu-
cational information to local real
estate professionals to work with you
and the current property owner
Purchase of home for about the same monthly cost as renting
with a down payment of 1-4 and closing costs paid by the AHI
Seller
The AHI Buyer to build credit through reporting timely monthly
payments to credit bureaus using Mortgage Access Corporation
(MAC) or another similar service
Investment in a city and community as an owner
The AHI Buyer to get homeownership tax benefits
The AHI Process Enables
AHI Buyer Benefits
Homeownership though equitable title at closing
Low down payment usually 1-4 of the home value
AHI Calculated Sales Price is based on local market rents
Closing costs are paid by the AHI Seller
First-time home buyer may have a tax credit up to
$8000 (2009 only)
Tax deductions for mortgage interest and property taxes
First-time Home buyer Tax Credit of $8000httpwwwfederalhousingtaxcreditcom site released by the National Association of Home Buildershttpwwwirsgovnewsroomarticle0id=20467100html site released by the United States Internal Revenue Service
Better approach than the typical rent-to-own
and lease-to-own options
Credit repair if necessary
Positive credit reporting
AHI Buyer is working towards building equity
with each payment
Fixed monthly payments based on a 30-year
contract
Refinance at a lower rate if applicable
No prepayment penalty
Termination of contract without credit damage
or foreclosure
Contract is assumable with certain restrictions
Down Payment and typical closing costs for a home purchase
In the AHI system it is recommended the seller pay
all closing costs Previously these costs were typically
shared between buyer and seller
Examples of such costs for a $150000 purchase are
Summary of Closing Costs
Mortgage Costs Loan Origination Fee
Appraisal Fees
Processing Fees
Title Charges
Settlement or Closing Fee
Title InsuranceTitle Fees
Real Estate Taxes
Recording Fee
City Transfer Tax
State Transfer tax
Down Payment
Total Cash Needed to Close
AHI Process
0
0
0
0
0
0
Determined at closing
0
0
0
$3000
$3000
Conventional Mortgage Loan (FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$4500 (3)
$12230
Conventional Mortgage Loan (non-FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$30000 (20)
$37730
Typical monthly payment and tax savingsThe AHI Buyer can deduct interest and property tax from their Federal
Income Tax Since this benefit varies with individuals and states a tax
specialist should be consulted for each situation Example
Contract Monthly Payment
AHI Calculated Sales Price
Down Payment (Percent)
Down Payment (Dollars)
Purchase with 30yrFixed 6
Monthly Contract Payment
Monthly Real Estate Taxes
Monthly Homeowners Insurance
Monthly Maintenance
Monthly Total Payment
Estimated Tax Savings
Mortgage Interest Paid
Real Estate Taxes Paid
Medical Expenses Paid
Charitable Expenses Paid
Tax Preparation amp Job Expenses
Total Itemized Deductions
Standard Deduction
Excess Itemized Deductions Less
Monthly Tax Savings for AHI Buyer 25
Rate (Itemized Divided by 12 Months Multi-
plied by 25 Tax Rate)
Monthly Total
Monthly Tax Savings for ISA Buyer
Monthly Payments after Deductions
1
$75000
20
$1500
$73500
$441
$83
$75
$50
$649
$4451
$1000
$200
$200
$500
$6351
$5450
$901
$19
$649
-$19
$630
2
$150000
20
$3000
$147000
$881
$83
$75
$50
$1090
$8902
$1000
$200
$200
$500
$10802
$5450
$5352
$111
$1090
-$111
$978
3
$250000
20
$5000
$245000
$1469
$83
$75
$50
$1702
$14837
$1000
$200
$200
$500
$16737
$5450
$11287
$235
$1702
-$235
$1467
PricingHow is the price for each home
determined
The Real Estate Professional works with the AHI Seller
to determine the AHI Calculated Sales Price The Real
Estate Professional uses local market rents to calculate
the purchase price
How is the interest rate determined
AHI recommends that the interest rate be fixed for the
30-year term This means the AHI Buyer will have
the agreed upon interest rate for the entire length of the
ISA contract or until refinance
AHI Buyerrsquos ability to terminate the contract
Things happen Situations change The AHI Program provides a way to
protect your future ability to purchase a home or apply for credit What
does it mean It means no foreclosure If at any time you canrsquot make your
payments or you simply wish to move the AHI Seller can (with certain
restrictions) transfer the ISA to a new buyer The AHI Buyer also has the
right to sell the property ldquoconventionallyrdquo at any time
Job Loss Protection
AHI has arranged for the AHI Seller to buy optional job loss insurance
through the HELP program for up to six months of contract payments
if the buyer involuntarily loses their job
AHI Buyer Benefits
AHI has built a group of nationally recognized and respected corporate
product and service providers to enhance the buying experience AHI
Buyer Benefits are provided to the AHI Buyer at closing The portfolio
delivers discounts on superior products and services
The Challenge of the Conventional Mortgage
In most home sales a buyer agrees to purchase a
property at a set price The buyer obtains a mortgage
from the lender and along with the down payment
pays the seller and closing costs and gets the title to
the property If a certain number of payments are
missed the lender forecloses on the loan and reclaims
the property
The most widely used mortgage is paid over 30 years
at a fixed interest rate
The lending process has become increas-
ingly complex as it evolves Costs associ-
ated with a traditional mortgage include
Title insurance to guarantee no prior
mortgages or liens exist
Lender points
Survey to confirm the dimensions and
location of the property
Appraisal confirm the selling price is equal
to or less than the propertyrsquos actual value
To qualify for a traditional mortgage
lenders look at a set of specific criteria
Down payment
Credit score
Two years of income tax returns W2 1099
Current debt and assets
Two months of bank statements showing
down payment
American Homeownership Initiative (AHI) Process
The Installment Sales Agreement (ISA) also referred to as a contract for deed or a land sales con-
tract is used to buy and sell real estate It is a contract directly between the buyer and seller for
the transfer of equitable title and possession rights The actual deed is then transferred when the
contract is paid off either over time or if the buyer refinances with a conventional mortgage It
was widely used before 1950 throughout the country
1 The AHI Seller working with
an AHI Registered Real Es-
tate Professional offers the property
for sale with price down payment
amount interest rate and contract
term pre-set
2 The AHI Buyer can negotiate
as they wish on these terms
3 AHI Buyer and AHI Seller
agree on the contract amount
4 The Real Estate Professional
prepares the paper work
which the AHI Buyer and AHI
Seller sign at closing
How the AHI process works
5Closing elements include
AHI Buyer receives equitable title on day one
An assignment of the contract and recognition letter is provided to
the AHI Sellerrsquos existing bank and title insurance provider
AHI recommends using a 30-yearfixed interest rate based on the
current mortgage rate
6 After closing
AHI Buyer receives tax benefits from home ownership and savings
are reflected in paycheck after adjustments to W-4 (see your local tax
professional)
AHI Buyer pays AHI Seller a monthly payment
No pre-payment penalties if the AHI Buyer refinances
Contract can be assigned to another buyer with seller approval
AHI Buyerrsquos termination of the ISA contract eliminates future
obligations
About the AHI Process
In the early 90s a principal for the
Initiative successfully directed the
conversion of several large apart-
ment buildings to owner-occupied
individual condominiums for the
Philadelphia developer Historic
Landmarks for Living An innova-
tive seller-financing program was
used that featured simplification of
the tenantbuyerrsquos purchase with
low down payments and the ISA for
immediate homeownership
AHI has been created by a group
of professionals working with large
national companies to implement a
similar program on a national basis
To implement the program AHI
provides detailed specific and edu-
cational information to local real
estate professionals to work with you
and the current property owner
Purchase of home for about the same monthly cost as renting
with a down payment of 1-4 and closing costs paid by the AHI
Seller
The AHI Buyer to build credit through reporting timely monthly
payments to credit bureaus using Mortgage Access Corporation
(MAC) or another similar service
Investment in a city and community as an owner
The AHI Buyer to get homeownership tax benefits
The AHI Process Enables
AHI Buyer Benefits
Homeownership though equitable title at closing
Low down payment usually 1-4 of the home value
AHI Calculated Sales Price is based on local market rents
Closing costs are paid by the AHI Seller
First-time home buyer may have a tax credit up to
$8000 (2009 only)
Tax deductions for mortgage interest and property taxes
First-time Home buyer Tax Credit of $8000httpwwwfederalhousingtaxcreditcom site released by the National Association of Home Buildershttpwwwirsgovnewsroomarticle0id=20467100html site released by the United States Internal Revenue Service
Better approach than the typical rent-to-own
and lease-to-own options
Credit repair if necessary
Positive credit reporting
AHI Buyer is working towards building equity
with each payment
Fixed monthly payments based on a 30-year
contract
Refinance at a lower rate if applicable
No prepayment penalty
Termination of contract without credit damage
or foreclosure
Contract is assumable with certain restrictions
Down Payment and typical closing costs for a home purchase
In the AHI system it is recommended the seller pay
all closing costs Previously these costs were typically
shared between buyer and seller
Examples of such costs for a $150000 purchase are
Summary of Closing Costs
Mortgage Costs Loan Origination Fee
Appraisal Fees
Processing Fees
Title Charges
Settlement or Closing Fee
Title InsuranceTitle Fees
Real Estate Taxes
Recording Fee
City Transfer Tax
State Transfer tax
Down Payment
Total Cash Needed to Close
AHI Process
0
0
0
0
0
0
Determined at closing
0
0
0
$3000
$3000
Conventional Mortgage Loan (FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$4500 (3)
$12230
Conventional Mortgage Loan (non-FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$30000 (20)
$37730
Typical monthly payment and tax savingsThe AHI Buyer can deduct interest and property tax from their Federal
Income Tax Since this benefit varies with individuals and states a tax
specialist should be consulted for each situation Example
Contract Monthly Payment
AHI Calculated Sales Price
Down Payment (Percent)
Down Payment (Dollars)
Purchase with 30yrFixed 6
Monthly Contract Payment
Monthly Real Estate Taxes
Monthly Homeowners Insurance
Monthly Maintenance
Monthly Total Payment
Estimated Tax Savings
Mortgage Interest Paid
Real Estate Taxes Paid
Medical Expenses Paid
Charitable Expenses Paid
Tax Preparation amp Job Expenses
Total Itemized Deductions
Standard Deduction
Excess Itemized Deductions Less
Monthly Tax Savings for AHI Buyer 25
Rate (Itemized Divided by 12 Months Multi-
plied by 25 Tax Rate)
Monthly Total
Monthly Tax Savings for ISA Buyer
Monthly Payments after Deductions
1
$75000
20
$1500
$73500
$441
$83
$75
$50
$649
$4451
$1000
$200
$200
$500
$6351
$5450
$901
$19
$649
-$19
$630
2
$150000
20
$3000
$147000
$881
$83
$75
$50
$1090
$8902
$1000
$200
$200
$500
$10802
$5450
$5352
$111
$1090
-$111
$978
3
$250000
20
$5000
$245000
$1469
$83
$75
$50
$1702
$14837
$1000
$200
$200
$500
$16737
$5450
$11287
$235
$1702
-$235
$1467
PricingHow is the price for each home
determined
The Real Estate Professional works with the AHI Seller
to determine the AHI Calculated Sales Price The Real
Estate Professional uses local market rents to calculate
the purchase price
How is the interest rate determined
AHI recommends that the interest rate be fixed for the
30-year term This means the AHI Buyer will have
the agreed upon interest rate for the entire length of the
ISA contract or until refinance
AHI Buyerrsquos ability to terminate the contract
Things happen Situations change The AHI Program provides a way to
protect your future ability to purchase a home or apply for credit What
does it mean It means no foreclosure If at any time you canrsquot make your
payments or you simply wish to move the AHI Seller can (with certain
restrictions) transfer the ISA to a new buyer The AHI Buyer also has the
right to sell the property ldquoconventionallyrdquo at any time
Job Loss Protection
AHI has arranged for the AHI Seller to buy optional job loss insurance
through the HELP program for up to six months of contract payments
if the buyer involuntarily loses their job
AHI Buyer Benefits
AHI has built a group of nationally recognized and respected corporate
product and service providers to enhance the buying experience AHI
Buyer Benefits are provided to the AHI Buyer at closing The portfolio
delivers discounts on superior products and services
American Homeownership Initiative (AHI) Process
The Installment Sales Agreement (ISA) also referred to as a contract for deed or a land sales con-
tract is used to buy and sell real estate It is a contract directly between the buyer and seller for
the transfer of equitable title and possession rights The actual deed is then transferred when the
contract is paid off either over time or if the buyer refinances with a conventional mortgage It
was widely used before 1950 throughout the country
1 The AHI Seller working with
an AHI Registered Real Es-
tate Professional offers the property
for sale with price down payment
amount interest rate and contract
term pre-set
2 The AHI Buyer can negotiate
as they wish on these terms
3 AHI Buyer and AHI Seller
agree on the contract amount
4 The Real Estate Professional
prepares the paper work
which the AHI Buyer and AHI
Seller sign at closing
How the AHI process works
5Closing elements include
AHI Buyer receives equitable title on day one
An assignment of the contract and recognition letter is provided to
the AHI Sellerrsquos existing bank and title insurance provider
AHI recommends using a 30-yearfixed interest rate based on the
current mortgage rate
6 After closing
AHI Buyer receives tax benefits from home ownership and savings
are reflected in paycheck after adjustments to W-4 (see your local tax
professional)
AHI Buyer pays AHI Seller a monthly payment
No pre-payment penalties if the AHI Buyer refinances
Contract can be assigned to another buyer with seller approval
AHI Buyerrsquos termination of the ISA contract eliminates future
obligations
About the AHI Process
In the early 90s a principal for the
Initiative successfully directed the
conversion of several large apart-
ment buildings to owner-occupied
individual condominiums for the
Philadelphia developer Historic
Landmarks for Living An innova-
tive seller-financing program was
used that featured simplification of
the tenantbuyerrsquos purchase with
low down payments and the ISA for
immediate homeownership
AHI has been created by a group
of professionals working with large
national companies to implement a
similar program on a national basis
To implement the program AHI
provides detailed specific and edu-
cational information to local real
estate professionals to work with you
and the current property owner
Purchase of home for about the same monthly cost as renting
with a down payment of 1-4 and closing costs paid by the AHI
Seller
The AHI Buyer to build credit through reporting timely monthly
payments to credit bureaus using Mortgage Access Corporation
(MAC) or another similar service
Investment in a city and community as an owner
The AHI Buyer to get homeownership tax benefits
The AHI Process Enables
AHI Buyer Benefits
Homeownership though equitable title at closing
Low down payment usually 1-4 of the home value
AHI Calculated Sales Price is based on local market rents
Closing costs are paid by the AHI Seller
First-time home buyer may have a tax credit up to
$8000 (2009 only)
Tax deductions for mortgage interest and property taxes
First-time Home buyer Tax Credit of $8000httpwwwfederalhousingtaxcreditcom site released by the National Association of Home Buildershttpwwwirsgovnewsroomarticle0id=20467100html site released by the United States Internal Revenue Service
Better approach than the typical rent-to-own
and lease-to-own options
Credit repair if necessary
Positive credit reporting
AHI Buyer is working towards building equity
with each payment
Fixed monthly payments based on a 30-year
contract
Refinance at a lower rate if applicable
No prepayment penalty
Termination of contract without credit damage
or foreclosure
Contract is assumable with certain restrictions
Down Payment and typical closing costs for a home purchase
In the AHI system it is recommended the seller pay
all closing costs Previously these costs were typically
shared between buyer and seller
Examples of such costs for a $150000 purchase are
Summary of Closing Costs
Mortgage Costs Loan Origination Fee
Appraisal Fees
Processing Fees
Title Charges
Settlement or Closing Fee
Title InsuranceTitle Fees
Real Estate Taxes
Recording Fee
City Transfer Tax
State Transfer tax
Down Payment
Total Cash Needed to Close
AHI Process
0
0
0
0
0
0
Determined at closing
0
0
0
$3000
$3000
Conventional Mortgage Loan (FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$4500 (3)
$12230
Conventional Mortgage Loan (non-FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$30000 (20)
$37730
Typical monthly payment and tax savingsThe AHI Buyer can deduct interest and property tax from their Federal
Income Tax Since this benefit varies with individuals and states a tax
specialist should be consulted for each situation Example
Contract Monthly Payment
AHI Calculated Sales Price
Down Payment (Percent)
Down Payment (Dollars)
Purchase with 30yrFixed 6
Monthly Contract Payment
Monthly Real Estate Taxes
Monthly Homeowners Insurance
Monthly Maintenance
Monthly Total Payment
Estimated Tax Savings
Mortgage Interest Paid
Real Estate Taxes Paid
Medical Expenses Paid
Charitable Expenses Paid
Tax Preparation amp Job Expenses
Total Itemized Deductions
Standard Deduction
Excess Itemized Deductions Less
Monthly Tax Savings for AHI Buyer 25
Rate (Itemized Divided by 12 Months Multi-
plied by 25 Tax Rate)
Monthly Total
Monthly Tax Savings for ISA Buyer
Monthly Payments after Deductions
1
$75000
20
$1500
$73500
$441
$83
$75
$50
$649
$4451
$1000
$200
$200
$500
$6351
$5450
$901
$19
$649
-$19
$630
2
$150000
20
$3000
$147000
$881
$83
$75
$50
$1090
$8902
$1000
$200
$200
$500
$10802
$5450
$5352
$111
$1090
-$111
$978
3
$250000
20
$5000
$245000
$1469
$83
$75
$50
$1702
$14837
$1000
$200
$200
$500
$16737
$5450
$11287
$235
$1702
-$235
$1467
PricingHow is the price for each home
determined
The Real Estate Professional works with the AHI Seller
to determine the AHI Calculated Sales Price The Real
Estate Professional uses local market rents to calculate
the purchase price
How is the interest rate determined
AHI recommends that the interest rate be fixed for the
30-year term This means the AHI Buyer will have
the agreed upon interest rate for the entire length of the
ISA contract or until refinance
AHI Buyerrsquos ability to terminate the contract
Things happen Situations change The AHI Program provides a way to
protect your future ability to purchase a home or apply for credit What
does it mean It means no foreclosure If at any time you canrsquot make your
payments or you simply wish to move the AHI Seller can (with certain
restrictions) transfer the ISA to a new buyer The AHI Buyer also has the
right to sell the property ldquoconventionallyrdquo at any time
Job Loss Protection
AHI has arranged for the AHI Seller to buy optional job loss insurance
through the HELP program for up to six months of contract payments
if the buyer involuntarily loses their job
AHI Buyer Benefits
AHI has built a group of nationally recognized and respected corporate
product and service providers to enhance the buying experience AHI
Buyer Benefits are provided to the AHI Buyer at closing The portfolio
delivers discounts on superior products and services
About the AHI Process
In the early 90s a principal for the
Initiative successfully directed the
conversion of several large apart-
ment buildings to owner-occupied
individual condominiums for the
Philadelphia developer Historic
Landmarks for Living An innova-
tive seller-financing program was
used that featured simplification of
the tenantbuyerrsquos purchase with
low down payments and the ISA for
immediate homeownership
AHI has been created by a group
of professionals working with large
national companies to implement a
similar program on a national basis
To implement the program AHI
provides detailed specific and edu-
cational information to local real
estate professionals to work with you
and the current property owner
Purchase of home for about the same monthly cost as renting
with a down payment of 1-4 and closing costs paid by the AHI
Seller
The AHI Buyer to build credit through reporting timely monthly
payments to credit bureaus using Mortgage Access Corporation
(MAC) or another similar service
Investment in a city and community as an owner
The AHI Buyer to get homeownership tax benefits
The AHI Process Enables
AHI Buyer Benefits
Homeownership though equitable title at closing
Low down payment usually 1-4 of the home value
AHI Calculated Sales Price is based on local market rents
Closing costs are paid by the AHI Seller
First-time home buyer may have a tax credit up to
$8000 (2009 only)
Tax deductions for mortgage interest and property taxes
First-time Home buyer Tax Credit of $8000httpwwwfederalhousingtaxcreditcom site released by the National Association of Home Buildershttpwwwirsgovnewsroomarticle0id=20467100html site released by the United States Internal Revenue Service
Better approach than the typical rent-to-own
and lease-to-own options
Credit repair if necessary
Positive credit reporting
AHI Buyer is working towards building equity
with each payment
Fixed monthly payments based on a 30-year
contract
Refinance at a lower rate if applicable
No prepayment penalty
Termination of contract without credit damage
or foreclosure
Contract is assumable with certain restrictions
Down Payment and typical closing costs for a home purchase
In the AHI system it is recommended the seller pay
all closing costs Previously these costs were typically
shared between buyer and seller
Examples of such costs for a $150000 purchase are
Summary of Closing Costs
Mortgage Costs Loan Origination Fee
Appraisal Fees
Processing Fees
Title Charges
Settlement or Closing Fee
Title InsuranceTitle Fees
Real Estate Taxes
Recording Fee
City Transfer Tax
State Transfer tax
Down Payment
Total Cash Needed to Close
AHI Process
0
0
0
0
0
0
Determined at closing
0
0
0
$3000
$3000
Conventional Mortgage Loan (FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$4500 (3)
$12230
Conventional Mortgage Loan (non-FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$30000 (20)
$37730
Typical monthly payment and tax savingsThe AHI Buyer can deduct interest and property tax from their Federal
Income Tax Since this benefit varies with individuals and states a tax
specialist should be consulted for each situation Example
Contract Monthly Payment
AHI Calculated Sales Price
Down Payment (Percent)
Down Payment (Dollars)
Purchase with 30yrFixed 6
Monthly Contract Payment
Monthly Real Estate Taxes
Monthly Homeowners Insurance
Monthly Maintenance
Monthly Total Payment
Estimated Tax Savings
Mortgage Interest Paid
Real Estate Taxes Paid
Medical Expenses Paid
Charitable Expenses Paid
Tax Preparation amp Job Expenses
Total Itemized Deductions
Standard Deduction
Excess Itemized Deductions Less
Monthly Tax Savings for AHI Buyer 25
Rate (Itemized Divided by 12 Months Multi-
plied by 25 Tax Rate)
Monthly Total
Monthly Tax Savings for ISA Buyer
Monthly Payments after Deductions
1
$75000
20
$1500
$73500
$441
$83
$75
$50
$649
$4451
$1000
$200
$200
$500
$6351
$5450
$901
$19
$649
-$19
$630
2
$150000
20
$3000
$147000
$881
$83
$75
$50
$1090
$8902
$1000
$200
$200
$500
$10802
$5450
$5352
$111
$1090
-$111
$978
3
$250000
20
$5000
$245000
$1469
$83
$75
$50
$1702
$14837
$1000
$200
$200
$500
$16737
$5450
$11287
$235
$1702
-$235
$1467
PricingHow is the price for each home
determined
The Real Estate Professional works with the AHI Seller
to determine the AHI Calculated Sales Price The Real
Estate Professional uses local market rents to calculate
the purchase price
How is the interest rate determined
AHI recommends that the interest rate be fixed for the
30-year term This means the AHI Buyer will have
the agreed upon interest rate for the entire length of the
ISA contract or until refinance
AHI Buyerrsquos ability to terminate the contract
Things happen Situations change The AHI Program provides a way to
protect your future ability to purchase a home or apply for credit What
does it mean It means no foreclosure If at any time you canrsquot make your
payments or you simply wish to move the AHI Seller can (with certain
restrictions) transfer the ISA to a new buyer The AHI Buyer also has the
right to sell the property ldquoconventionallyrdquo at any time
Job Loss Protection
AHI has arranged for the AHI Seller to buy optional job loss insurance
through the HELP program for up to six months of contract payments
if the buyer involuntarily loses their job
AHI Buyer Benefits
AHI has built a group of nationally recognized and respected corporate
product and service providers to enhance the buying experience AHI
Buyer Benefits are provided to the AHI Buyer at closing The portfolio
delivers discounts on superior products and services
AHI Buyer Benefits
Homeownership though equitable title at closing
Low down payment usually 1-4 of the home value
AHI Calculated Sales Price is based on local market rents
Closing costs are paid by the AHI Seller
First-time home buyer may have a tax credit up to
$8000 (2009 only)
Tax deductions for mortgage interest and property taxes
First-time Home buyer Tax Credit of $8000httpwwwfederalhousingtaxcreditcom site released by the National Association of Home Buildershttpwwwirsgovnewsroomarticle0id=20467100html site released by the United States Internal Revenue Service
Better approach than the typical rent-to-own
and lease-to-own options
Credit repair if necessary
Positive credit reporting
AHI Buyer is working towards building equity
with each payment
Fixed monthly payments based on a 30-year
contract
Refinance at a lower rate if applicable
No prepayment penalty
Termination of contract without credit damage
or foreclosure
Contract is assumable with certain restrictions
Down Payment and typical closing costs for a home purchase
In the AHI system it is recommended the seller pay
all closing costs Previously these costs were typically
shared between buyer and seller
Examples of such costs for a $150000 purchase are
Summary of Closing Costs
Mortgage Costs Loan Origination Fee
Appraisal Fees
Processing Fees
Title Charges
Settlement or Closing Fee
Title InsuranceTitle Fees
Real Estate Taxes
Recording Fee
City Transfer Tax
State Transfer tax
Down Payment
Total Cash Needed to Close
AHI Process
0
0
0
0
0
0
Determined at closing
0
0
0
$3000
$3000
Conventional Mortgage Loan (FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$4500 (3)
$12230
Conventional Mortgage Loan (non-FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$30000 (20)
$37730
Typical monthly payment and tax savingsThe AHI Buyer can deduct interest and property tax from their Federal
Income Tax Since this benefit varies with individuals and states a tax
specialist should be consulted for each situation Example
Contract Monthly Payment
AHI Calculated Sales Price
Down Payment (Percent)
Down Payment (Dollars)
Purchase with 30yrFixed 6
Monthly Contract Payment
Monthly Real Estate Taxes
Monthly Homeowners Insurance
Monthly Maintenance
Monthly Total Payment
Estimated Tax Savings
Mortgage Interest Paid
Real Estate Taxes Paid
Medical Expenses Paid
Charitable Expenses Paid
Tax Preparation amp Job Expenses
Total Itemized Deductions
Standard Deduction
Excess Itemized Deductions Less
Monthly Tax Savings for AHI Buyer 25
Rate (Itemized Divided by 12 Months Multi-
plied by 25 Tax Rate)
Monthly Total
Monthly Tax Savings for ISA Buyer
Monthly Payments after Deductions
1
$75000
20
$1500
$73500
$441
$83
$75
$50
$649
$4451
$1000
$200
$200
$500
$6351
$5450
$901
$19
$649
-$19
$630
2
$150000
20
$3000
$147000
$881
$83
$75
$50
$1090
$8902
$1000
$200
$200
$500
$10802
$5450
$5352
$111
$1090
-$111
$978
3
$250000
20
$5000
$245000
$1469
$83
$75
$50
$1702
$14837
$1000
$200
$200
$500
$16737
$5450
$11287
$235
$1702
-$235
$1467
PricingHow is the price for each home
determined
The Real Estate Professional works with the AHI Seller
to determine the AHI Calculated Sales Price The Real
Estate Professional uses local market rents to calculate
the purchase price
How is the interest rate determined
AHI recommends that the interest rate be fixed for the
30-year term This means the AHI Buyer will have
the agreed upon interest rate for the entire length of the
ISA contract or until refinance
AHI Buyerrsquos ability to terminate the contract
Things happen Situations change The AHI Program provides a way to
protect your future ability to purchase a home or apply for credit What
does it mean It means no foreclosure If at any time you canrsquot make your
payments or you simply wish to move the AHI Seller can (with certain
restrictions) transfer the ISA to a new buyer The AHI Buyer also has the
right to sell the property ldquoconventionallyrdquo at any time
Job Loss Protection
AHI has arranged for the AHI Seller to buy optional job loss insurance
through the HELP program for up to six months of contract payments
if the buyer involuntarily loses their job
AHI Buyer Benefits
AHI has built a group of nationally recognized and respected corporate
product and service providers to enhance the buying experience AHI
Buyer Benefits are provided to the AHI Buyer at closing The portfolio
delivers discounts on superior products and services
Down Payment and typical closing costs for a home purchase
In the AHI system it is recommended the seller pay
all closing costs Previously these costs were typically
shared between buyer and seller
Examples of such costs for a $150000 purchase are
Summary of Closing Costs
Mortgage Costs Loan Origination Fee
Appraisal Fees
Processing Fees
Title Charges
Settlement or Closing Fee
Title InsuranceTitle Fees
Real Estate Taxes
Recording Fee
City Transfer Tax
State Transfer tax
Down Payment
Total Cash Needed to Close
AHI Process
0
0
0
0
0
0
Determined at closing
0
0
0
$3000
$3000
Conventional Mortgage Loan (FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$4500 (3)
$12230
Conventional Mortgage Loan (non-FHA)
$1500 (1)
$300
$1000
$1500
$200
$1450
Determined at closing
$280
$2250
$750
$30000 (20)
$37730
Typical monthly payment and tax savingsThe AHI Buyer can deduct interest and property tax from their Federal
Income Tax Since this benefit varies with individuals and states a tax
specialist should be consulted for each situation Example
Contract Monthly Payment
AHI Calculated Sales Price
Down Payment (Percent)
Down Payment (Dollars)
Purchase with 30yrFixed 6
Monthly Contract Payment
Monthly Real Estate Taxes
Monthly Homeowners Insurance
Monthly Maintenance
Monthly Total Payment
Estimated Tax Savings
Mortgage Interest Paid
Real Estate Taxes Paid
Medical Expenses Paid
Charitable Expenses Paid
Tax Preparation amp Job Expenses
Total Itemized Deductions
Standard Deduction
Excess Itemized Deductions Less
Monthly Tax Savings for AHI Buyer 25
Rate (Itemized Divided by 12 Months Multi-
plied by 25 Tax Rate)
Monthly Total
Monthly Tax Savings for ISA Buyer
Monthly Payments after Deductions
1
$75000
20
$1500
$73500
$441
$83
$75
$50
$649
$4451
$1000
$200
$200
$500
$6351
$5450
$901
$19
$649
-$19
$630
2
$150000
20
$3000
$147000
$881
$83
$75
$50
$1090
$8902
$1000
$200
$200
$500
$10802
$5450
$5352
$111
$1090
-$111
$978
3
$250000
20
$5000
$245000
$1469
$83
$75
$50
$1702
$14837
$1000
$200
$200
$500
$16737
$5450
$11287
$235
$1702
-$235
$1467
PricingHow is the price for each home
determined
The Real Estate Professional works with the AHI Seller
to determine the AHI Calculated Sales Price The Real
Estate Professional uses local market rents to calculate
the purchase price
How is the interest rate determined
AHI recommends that the interest rate be fixed for the
30-year term This means the AHI Buyer will have
the agreed upon interest rate for the entire length of the
ISA contract or until refinance
AHI Buyerrsquos ability to terminate the contract
Things happen Situations change The AHI Program provides a way to
protect your future ability to purchase a home or apply for credit What
does it mean It means no foreclosure If at any time you canrsquot make your
payments or you simply wish to move the AHI Seller can (with certain
restrictions) transfer the ISA to a new buyer The AHI Buyer also has the
right to sell the property ldquoconventionallyrdquo at any time
Job Loss Protection
AHI has arranged for the AHI Seller to buy optional job loss insurance
through the HELP program for up to six months of contract payments
if the buyer involuntarily loses their job
AHI Buyer Benefits
AHI has built a group of nationally recognized and respected corporate
product and service providers to enhance the buying experience AHI
Buyer Benefits are provided to the AHI Buyer at closing The portfolio
delivers discounts on superior products and services
Typical monthly payment and tax savingsThe AHI Buyer can deduct interest and property tax from their Federal
Income Tax Since this benefit varies with individuals and states a tax
specialist should be consulted for each situation Example
Contract Monthly Payment
AHI Calculated Sales Price
Down Payment (Percent)
Down Payment (Dollars)
Purchase with 30yrFixed 6
Monthly Contract Payment
Monthly Real Estate Taxes
Monthly Homeowners Insurance
Monthly Maintenance
Monthly Total Payment
Estimated Tax Savings
Mortgage Interest Paid
Real Estate Taxes Paid
Medical Expenses Paid
Charitable Expenses Paid
Tax Preparation amp Job Expenses
Total Itemized Deductions
Standard Deduction
Excess Itemized Deductions Less
Monthly Tax Savings for AHI Buyer 25
Rate (Itemized Divided by 12 Months Multi-
plied by 25 Tax Rate)
Monthly Total
Monthly Tax Savings for ISA Buyer
Monthly Payments after Deductions
1
$75000
20
$1500
$73500
$441
$83
$75
$50
$649
$4451
$1000
$200
$200
$500
$6351
$5450
$901
$19
$649
-$19
$630
2
$150000
20
$3000
$147000
$881
$83
$75
$50
$1090
$8902
$1000
$200
$200
$500
$10802
$5450
$5352
$111
$1090
-$111
$978
3
$250000
20
$5000
$245000
$1469
$83
$75
$50
$1702
$14837
$1000
$200
$200
$500
$16737
$5450
$11287
$235
$1702
-$235
$1467
PricingHow is the price for each home
determined
The Real Estate Professional works with the AHI Seller
to determine the AHI Calculated Sales Price The Real
Estate Professional uses local market rents to calculate
the purchase price
How is the interest rate determined
AHI recommends that the interest rate be fixed for the
30-year term This means the AHI Buyer will have
the agreed upon interest rate for the entire length of the
ISA contract or until refinance
AHI Buyerrsquos ability to terminate the contract
Things happen Situations change The AHI Program provides a way to
protect your future ability to purchase a home or apply for credit What
does it mean It means no foreclosure If at any time you canrsquot make your
payments or you simply wish to move the AHI Seller can (with certain
restrictions) transfer the ISA to a new buyer The AHI Buyer also has the
right to sell the property ldquoconventionallyrdquo at any time
Job Loss Protection
AHI has arranged for the AHI Seller to buy optional job loss insurance
through the HELP program for up to six months of contract payments
if the buyer involuntarily loses their job
AHI Buyer Benefits
AHI has built a group of nationally recognized and respected corporate
product and service providers to enhance the buying experience AHI
Buyer Benefits are provided to the AHI Buyer at closing The portfolio
delivers discounts on superior products and services
PricingHow is the price for each home
determined
The Real Estate Professional works with the AHI Seller
to determine the AHI Calculated Sales Price The Real
Estate Professional uses local market rents to calculate
the purchase price
How is the interest rate determined
AHI recommends that the interest rate be fixed for the
30-year term This means the AHI Buyer will have
the agreed upon interest rate for the entire length of the
ISA contract or until refinance
AHI Buyerrsquos ability to terminate the contract
Things happen Situations change The AHI Program provides a way to
protect your future ability to purchase a home or apply for credit What
does it mean It means no foreclosure If at any time you canrsquot make your
payments or you simply wish to move the AHI Seller can (with certain
restrictions) transfer the ISA to a new buyer The AHI Buyer also has the
right to sell the property ldquoconventionallyrdquo at any time
Job Loss Protection
AHI has arranged for the AHI Seller to buy optional job loss insurance
through the HELP program for up to six months of contract payments
if the buyer involuntarily loses their job
AHI Buyer Benefits
AHI has built a group of nationally recognized and respected corporate
product and service providers to enhance the buying experience AHI
Buyer Benefits are provided to the AHI Buyer at closing The portfolio
delivers discounts on superior products and services
AHI Buyer Benefits
AHI has built a group of nationally recognized and respected corporate
product and service providers to enhance the buying experience AHI
Buyer Benefits are provided to the AHI Buyer at closing The portfolio
delivers discounts on superior products and services