1. Sell More Homes In ReverseDiscover theHECM for Purchase Loan Presented by:This document is for professional use only. Do not distribute to thepublic or reproduce without the written consent.

2. What Is A HECM for Purchase Loan?A Home Equity Conversion Mortgage (HECM) For Purchaseis an innovative loan that lets seniors buy a new home usingequity from the sale of their previous home or other assets. This document is for professional use only. Do not distribute to the public or reproduce without the written consent. 3. What Are Its Special Features? For homebuyers age 62+ Requires no monthly mortgage payments FHA-insured, non-recourse loan For primary home purchases This document is for professional use only. Do not distribute to the public or reproduce without the written consent. 4. What About Credit Qualifications? Qualifying may be easier than a traditional mortgage. Generally, the older the borrower is,the more funds they may receive. Currently, a borrowerscredit score is not usedin the credit decision.This document is for professional use only. Do not distribute to the public orreproduce without the written consent. 5. What Are The Benefits For Your Clients? Affordability no monthly mortgagepayments required. Purchasing Power lower upfrontinvestment than a cash purchase. Accessibility it may be easier toqualify for credit than with a traditionalmortgage.This document is for professional use only. Do not distribute to the public orreproduce without the written consent. 6. Other Unique Benefits Peace of Mind one time initial investmentmade upfront on the HECM loan Control borrower retains home title. Safeguards - Mortgage Insurance Premium(MIP) ensures the amount owed on the loancan never be more than the value of thehome at the time of sale Education HUD required counseling This document is for professional use only. Do not distribute to the public or reproduce without the written consent. 7. Show Your Clients The AdvantagesUsing a HECM for purchase loan, the math isclear, with $100,000 Investment, they canbuy a: $100,000Home in Cash OR $250,000Home with HECM for Purchase Loan** This HECM for Purchase Loan example is based on a 67 year old borrower, a loan amount of $150,487, cash due at closing of $99,513, a fixed interest rate of 4.50%, an appraised homevalue of $250,000. Total estimated settlement costs of $11,513 include a mortgage insurance premium of $5,000, origination charges of $4,500, and other charges of $2,013. The mortgagepayoff of $250,000 is amortized over 204 months with total finance charges of $277,418 and an annual percentage rate of 6.12%. Interest rates may vary.This document is for professional use only. Do not distribute to thepublic or reproduce without the written consent. 8. HECM for Purchase May Help You: Sell more homes Make home buying more affordable Move renters to buyers Meet the needs of your senior clients This document is for professional use only. Do not distribute to the public or reproduce without the written consent. 9. Help Your ClientsRight-size and Save More For Retirement This document is for professional use only. Do not distribute to the public or reproduce without the written consent.* This HECM for Purchase Loan example is based on a 67 year old borrower, a loan amount of $150,487, cash due at closing of $99,513, a fixed interest rate of 4.50%, an appraisedhome value of $250,000. Total estimated settlement costs of $11,513 include a mortgage insurance premium of $5,000, origination charges of $4,500, and other charges of $2,013.The mortgage payoff of $250,000 is amortized over 204 months with total finance charges of $277,418 and an annual percentage rate of 6.12%. Interest rates may vary. 10. Help Your ClientsAfford A Retirement Dream Home This document is for professional use only. Do not distribute to the public or reproduce without the written consent.*This HECM for Purchase Loan example is based on a 67 year old borrower, a loan amount of $305,287, cash due at closing of $194,713, a fixed interest rate of 4.50%, an appraised home value of $500,000. Totalestimated settlement costs of $18,713 include a mortgage insurance premium of $10,000, origination charges of $6,000, and other charges of $2,713. The mortgage payoff of $500,000 is amortized over 204 monthswith total finance charges of $552,003 and an annual percentage rate of 6.07%. Interest rates may vary. 11. Help Your ClientsAfford to Sell and Move Closer to FamilyThis document is for professional use only. Do not distribute to the public orreproduce without the written consent.* This HECM for Purchase Loan example is based on a 67 year old borrower, a loan amount of $150,487, cash due at closing of $99,513, a fixed interest rate of 4.50%, an appraised homevalue of $250,000. Total estimated settlement costs of $11,513 include a mortgage insurance premium of $5,000, origination charges of $4,500, and other charges of $2,013. The mortgage1payoff of $250,000 is amortized over 204 months with total finance charges of $277,418 and an annual percentage rate of 6.12%. Interest rates may vary. 12. What Are Eligibility Requirements? Borrower: Youngest borrower must be 62+ Occupancy as Primary Residence within60 days of closing No other mortgage loan can be used tobuy home (HECM for Purchase must bethe only home loan). Property: Single-family home, townhouse HUD Approved condo Planned unit development (PUD) FHA property guidelinesThis document is for professional use only. Do not distribute to the public orreproduce without the written consent. 13. How Do You Get Started?Learn about the HECM ProgramRefer your clients to a qualified reverse mortgage specialistShop for New Home with your clientBuyer applies for a HECM for Purchaseloan (after an accepted purchase offerbetween buyer and seller).Close on new home using proceeds fromHECM for Purchase and customer downpayment.This document is for professional use only. Do not distribute to the public orreproduce without the written consent. 14. HECM for PurchaseHUD Questions and AnswersThis document is for professional use only. Do not distribute tothe public or reproduce without the written consent. 15. Why Was The HECM Program Created? The program was introduced by HUD in 2009 to allow seniors to purchase a new principal residence and obtain a Home Equity Conversion Mortgage (HECM) loan within a single transaction. The program was also designed to enable senior homeowners to relocate to other geographical areas to be closer to family members or downsize to homes that meet their physical needs, i.e., handrails, one level properties, ramps, wider doorways, etc.This document is for professional use only. Do not distribute to thepublic or reproduce without the written consent. 16. FAQ Property RelatedCan a HECM for purchase be used to satisfy outstanding paymentobligations associated with a land contract?Yes, if the property will be used as collateral for the HECM and the mortgage willbe held in fee simple, or on a leasehold under a lease for not less than 99 yearswhich is renewable, or under a lease having the remaining period of not less than50 years beyond the date of the 100th birthday of the youngest mortgagor.Can a lender take an application on a property that is under constructionand not habitable?No. The lender may only take application once the Certificate of Occupancy or itsequivalent has been issued. This document is for professional use only. Do not distribute to the public or reproduce without the written consent. 17. FAQ - PropertyAre set asides for property charges allowed (i.e., ground rent, tax, insurance,Homeowner Association fees, etc.)?Yes. Mortgagors will continue to have the option of electing to have the lender withholdfunds from their monthly payments or by charging such funds to the line of credit.Are set asides for repairs allowed?To be eligible for federal insurance, the property must meet FHA minimum propertyrequirements. All repairs to correct major property deficiencies that threaten the healthand safety of the homeowner and/or jeopardize the soundness and security of theproperty must be completed by the seller prior to closing. Appraisers must complete theappraisal report as "Subject To" the completion of these repairs.Major Property Deficiency Examples:No running water, Leaking roof, No primary heating source, Inadequate electrical system(including lighting), Inoperable doors and windows (inhibited ingress and egress), Stateor local code violationsIs the Amendatory Clause required?Yes. An appraisal is required for all HECM transactions, including purchase transactions.The execution of the Amendatory Clause does not negate federal and state mandateson providing a copy of the appraisal to the consumer.This document is for professional use only. Do not distribute tothe public or reproduce without the written consent. 18. FAQ - FundingWhat would be an "allowable FHA funding source" for gap financing of the equityportion? A withdrawal from the mortgagors savings or retirement account would be anacceptable funding source.How is the maximum claim amount and principal limit calculated?For HECM purchase transactions only, the maximum claim amount will be the least of: 1)the appraised value; 2) sale price; or 3) FHA mortgage limit for a one family residence.The principal limit is determined by multiplying the maximum claim amount by theprincipal limit factor corresponding to the age of the youngest mortgagor, the expectedinterest rate and the initial MIP option that the borrower selects.Are gifts an acceptable source of funding?Prospective mortgagors may use their own money or money obtained from the sale ofassets. The monetary investment requirement can also be met by the use of approvedfunding sources as defined in HUD Handbook 4155.1 REV-5, section 2-10, with theexception of the following funding sources which may not be used: Sweat Equity, TradeEquity, Rent Credit, Cash or its equivalent, in whole or in part, from the following parties,before, during or after loan closing:- The seller or any other person or entity that financially benefits from the transactions, or- Any third party or entity that is reimbursed, directly or indirectly, by any of the partiesdescribed in the previous bullet. This document is for professional use only. Do not distribute to the public or reproduce without the written consent. 19. HUD FAQ - FundingCan prospective mortgagors apply credit card cash advances towards therequired monetary investment or closing costs?No. This would be a violation of 24 Code of Federal Regulations 206.32(a), whichrequires all outstanding obligations connected to the HECM transaction, purchaseor otherwise, to be satisfied prior to or on the date of closing.Are seller concessions allowed?No. Seller concessions are applicable to forward mortgages only.Is seller financing permitted?No.Is the Real Estate Certification required?Yes. This document is for professional use only. Do not distribute to the public or reproduce without the written consent. 20. FAQ - FundingWhen purchasing a new principal residence, if the HECM proceeds do not cover thesales price, can part or all of the propertys indebtedness be subordinated behindthe first and second HECM liens if the existing lien holder is willing to execute asubordinate agreement?No. All existing liens must be satisfied at the HECM closing.If the source of funds comes from the sale of the homeowners principal residenceor other owned property, and the sale is occurring the same day as the closing onthe HECM, can a copy of the executed HUD-1 and cashiers or certified check,evidencing the sale, be used to verify the funding source?Yes. In addition to the HUD-1, a copy of the sales contract executed by all parties and acopy of the cashiers or certified check bearing the name of the seller can be used to verifythe funding source.Can prospective mortgagors obtain a secured or non-secured loan from anotherasset (i.e., car, home equity line of credit, or investment property or second home) tosatisfy the monetary investment or closing costs?No. Consistent with existing policy, bridge loans and other interim financing methodsassociated with HECM transactions are prohibited, unless the unpaid oroutstanding obligation can be satisfied prior to or on the day of closing.This document is for professional use only. Do not distribute tothe public or reproduce without the written consent. 21. Together, we can make this new business-building opportunity yours!Contact InformationChris Beard, NMLS# 353274Reverse Mortgage Specialist9822 Montague StreetTampa, FL 33626Cell: 813-857-1254Toll Free: 866-684-7868cbeard@firstbankonline.comwww.GoLocalReverseMortgage.comBorrowers must be age 62 or older. Consult a tax advisor. Reverse mortgage borrowers are required to obtain an eligibilitycertificate by receiving counseling sessions with a HUD-approved agency. Family members are also strongly encouraged toparticipate in these informative sessions. Call for more detailed program information. Loan proceeds are not consideredincome and will not affect Social Security or Medicare benefits. Monthly reverse mortgage advances may affect borrowereligibility for other programs. Consult either a local program office or an attorney to determine how, or if, monthly reversemortgage payments might affect a specific situation. This information is for real estate and building professionals only and isnot intended for consumer distribution.Information is accurate as of the date of 4/12 and is subject to change without notice. 21