My Community Mortgage &Flexible Mortgage Training

Offered through

First Mortgage’s Wholesale Division

Agenda• My Community Mortgage

▫ Introduction▫ Eligibility Guidelines▫ Eligible Programs▫ Underwriting Guidelines▫ Community Solutions▫ Community HomeChoice▫ MCM Program Highlights

• Flexible Mortgage▫ Introduction & Highlights of Program▫ Eligibility Guidelines▫ Underwriting Guidelines▫ Eligible Programs▫ Flex Program Highlights

• Interest Rates & Fees• Marketing Tools, Training & Support

MY COMMUNITY MY COMMUNITY MORTGAGEMORTGAGEIntroduction to First Mortgage CorporationIntroduction & Eligible BorrowersSuite of “Community Mortgage Options”My Community Mortgage Product Features

04/22/23

3

Introduction• 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 Federal Home Loan Mortgage Corporation (Freddie Mac); the Government National Mortgage Association (Ginnie Mae); the California Housing Finance Agency (CalHFA); the Nevada Housing Division; the California Public Employees’ Retirement System (CalPERS); the California Teachers’ Retirement System (CalSTRS); and many other major secondary market institutions.

• Having funded in excess of $12 billion in residential real estate loans, FMC has assisted more than sixty thousand 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”.

What is the MCM Program?Penetrating minority and other underserved markets is a

core element of future growth and business success.

• The MyCommunityMortgage (MCM) loan program is Fannie Mae’s program designed to help Lenders and Brokers meet the needs of low & moderate income homebuyers in your communities.

• Market Restrictions: All 50 states (CA, NV, WA, OR, AZ for FMC)

2 Main Objectives of the program:1. AFFORDABILITY

• Little to no cash required

2. FLEXIBILITY

• UW Flexibilities•Borrower Options

Targeted BorrowersLow to Moderate Income Borrowers with…

What is the current market doing?• The market continues to slow down• Product availability continues to shrink making it a

challenge to find alternative financing solutions• Non-Agency products continue to experience liquidity

issues• Purchases, refinances and new home construction are

declining• Overall home values are either flat or depreciating

throughout the country• There is a shift in the market from Agency products

to Government products• Agency and Government products may be a better

alternative to increase originations, lessen risk, and grow market share in this turbulent environment

Opportunity• There are still borrowers who:

▫ Are 1st Time Homebuyers

▫ Have non-traditional credit

▫ Have blemished credit and/or a low credit score

▫ Have limited cash for down payment or closing costs

▫ Have low-to-moderate income

▫ Receive income from government benefits

▫ Have boarder income from non-family members

▫ Have cash-on-hand for closing

▫ Community service professionals who could use extra flexibilities

▫ Want to realize the benefit of homeownership

Solution

• Provide qualified borrowers an affordable, stable homeownership solution with MCM, by offering:

▫ Loans to qualified FTHB, low-to-moderate income borrowers and other underserved markets

▫ No minimum down payment for qualified borrowers▫ Up to 100% LTV and 105% CLTV▫ Non-traditional credit to those who need flexible credit options▫ Flexibility to use cash-on-hand for down payment and closing costs▫ Flexible options for sources of income▫ Up to 6% seller contributions on loans between 90.01-100% LTV▫ Lower initial monthly payments with optional temporary subsidy

buydown plan▫ Fixed rates up to 40-year terms and adjustable rate mortgages

(ARMS)▫ Community 2nds up to 105% CLTV▫ Low mortgage insurance (MI) coverage – maximum of 20%▫ No Area Median Income (AMI) limits in Fannie Neighbors areas▫ Interest only option available on 30 and 40 year fixed mortgages

and 5/1 adjustable rate mortgage

Suite of “Community” Mortgage Options

Community 97 is a 97 percent loan-to-value (LTV) mortgage option with flexible credit guidelines. The core features, which can be customized, include NO minimum borrower contribution (1 Unit only), no monthly reserves, and a higher single qualifying ratio.

Community 100 Plus is a 100 percent loan-to-value (LTV) mortgage option with flexible credit guidelines. The core features, which can be customized, include NO minimum borrower contribution, no monthly reserves, and a higher single qualifying ratio.

04/22/23

10

PROGRAM TYPESPROGRAM TYPES1ST Mortgage Programs

04/22/23

11

1st Program Types•FIXED

▫ Conventional Agency Fixed Rate 10-40 year terms

▫ Conventional Agency Fixed Rate Interest Only (10/20) 30 year term1

•ARMS▫ Conventional Agency T-Bill ARM (5/1, 7/1 and 10/1)

30 year term▫ Conventional Agency LIBOR ARM (5/1, 7/1 and 10/1)

30 to 40 year terms

Fully Indexed FIXED ProgramsTopic Description

Program Types Conforming 10, 15, 20, 25, 30, 40 Year Fixed

Interest Rate Interest Rate is Fixed and payment is Fully Amortized for the entire term of the loan.

Term 10 – 40 Years

Max LTV See Max LTV/CLTV page

Max CLTV See Max LTV/CLTV page

Maximum Loan Amount Fannie Mae Conforming Loan Limits

Loan Purpose Purchase Rate & Term Refinance

Occupancy Owner Occupied

Minimum Fico Score AUS: No minimum FICO – Determined by DU (NO BK or FC in last 24 months)Manual: See Max LTV/CLTV page

Interest Only FIXED ProgramsTopic Description

Program Types Conforming 30, 35, 40 Year Interest Only Fixed Programs

Interest Rate Interest Rate is Fixed for the entire term of the loan.

Qualifying Rate Qualify borrower at the Fully Amortized Rate (PITI)

Term 1. 30 Year Term: Interest-only payment for the first 10 years, followed by a 20-year fully amortized payment

2. 35 Year Term: Interest-only payment for the first 5 years, followed by a 30-year fully amortized payment

3. 40 Year Term: Interest-only payment for the first 10 years, followed by a 30-year fully amortized payment

Max LTV See next page

Max CLTV See next page

Maximum Loan Amount Fannie Mae Conforming Loan Limits

Loan Purpose Purchase Rate & Term Refinance

Occupancy Owner Occupied

Minimum Fico Score Minimum 620 regardless of DU decision

ARM ProgramsTopic Description

Program Types Conforming 5/1 (2/2/5 caps only), 7/1, 10/1 T-Bill ARM Conforming 5/1 (2/2/5 caps only), 7/1, 10/1 Libor ARM

Interest Rate Initial Interest rate and monthly payment are low, but these may change during the life of the loan based on the fluctuation of the 1-year T-Bill and the LIBOR Indices, Margin and Caps.

Qualifying Rate Qualify borrower at the Fully Indexed Fully Amortized Payment (PITI)

Term T-Bill: 30 Year TermLIBOR: 30 – 40 Year Term

Max LTV See Max LTV/CLTV page

Max CLTV See Max LTV/CLTV Page

Maximum Loan Amount Fannie Mae Conforming Loan Limits

Loan Purpose Purchase Rate & Term Refinance

Occupancy Owner Occupied

Minimum Fico Score AUS: No minimum FICO – Determined by DU (NO BK or FC in last 24 months)Manual: See Max LTV/CLTV page

Max LTV / CLTV & Fico

Program UnitsPurchase and Rate & Term

Maximum LTV 1 / CLTV 2

Minimum Credit Score (Manual UW)

Community 100 Plus

1 Unit

100 / 105% 620

97 / 105% 600Community 97

Community 2 Units 2 Units 97 / 105% 620

Community 3-4 Units 3 3-4 Units 3 95 / 105% 3 660 3

Maximum LTV/CLTV may be reduced by 5% in areas experiencing Declining

Markets/Values

1 Cooperatives: Maximum LTV is 90%

2 Only community 2nds and closed-end 2nds are allowed

3 3-4 Units: A DU Approve/Eligible certificate is required

ELIGIBILITY ELIGIBILITY REQUIREMENTSREQUIREMENTSEligibility BorrowersEligible Properties

04/22/23

17

Eligible BorrowersTopic Description

Eligible Borrowers U.S.citizens Permanent Resident Aliens Non-Permanent Resident Aliens

Non Citizen Borrowers

Most common types of cards and stamps: Social Security Card Permanent Resident or “Green” Card Employment Authorization Card Immigrant Visa & Entry Stamp I-551 Stamp in Passport

Usage of ITINs ITINs are issued to individuals by the Internal Revenue Service without regard to their immigration status. Therefore, the ITIN does not provide any information about whether a person is residing in the US legally or not.

Non Occupant Co-Borrowers

Not Allowed

Other Borrower may not own any other residence at time of closing

Eligible PropertiesTopic Description

Eligible Properties

Attached SFR’s Detached SFRs1

Attached PUDs Detached PUDs1

Low-Rise Condos High-Rise Condos Cooperatives 2-4 Units2

1 Includes modular, panelized & prefabricated classifications of factory-built housing2 3-4 Units: Ineligible with the Community Solutions option. A DU Approve/Eligible certificate is required.

INCOME REQUIREMENTSINCOME REQUIREMENTSBorrower Income RequirementsOther Income Requirements

Overtime and Part-Time IncomeBoarder IncomeRental IncomeCo-Borrowers Income

04/22/23

20

Income RequirementTopic Description

Borrower Income Limit

HUD AMI

The borrower’s income is limited to 100% of the annual HUD AMI (area median income) in which the property is located with the following exceptions:

CA: 140% WA & OR (Several Counties): 120% Non-Metropolitan Counties: 115% All Other Areas: 100%

Exception Median income limits do not apply if:

1.If the subject property is located in a FannieNeighbors area including border regions :

www.efanniemae.comOR

2.When a public agency, housing finance agency, non-profit organization or an employer provides down payment or closing cost assistance. The income limits imposed by those organizations will apply.

Other Income RequirementsTopic Description

Boarder Income(related or not related)

MCM 97 & MCM 100 Only

1-2 Unit Only Boarder may not be obligated on the note Boarder has lived with the borrower and paid rent for the past 12 months Border income does not exceed 30% of the total qualifying income Boarder provides documentation to demonstrate a history of shared residency that shows the boarder’s address as the same as the borrower’s, and proof of rental payments for the past 12 months

Drivers license with property address Bank Statements Cancelled checks or bank deposits

Rental Income (2-4 Units)FNMA Form 216 required

If one or more of the units is rented or is intended to be rented, rental income for the units may be added to the borrower’s income when calculating the debt ratios based on the following:

For 2 units, 75% of the gross rents may be used For 3-4 units, 65% of the gross rents may be used Allowed only on LTVs <= 97

Co-Borrower’s Income

If there are multiple occupying co-borrowers, and any of the occupying co-borrowers have no credit score due to an insufficient credit record with the repositories, no credit analysis on those borrowers is required, as long as their combined income is not greater than 30% of the total qualifying income (50% if approved through DU).

Overtime &Part Time Income

Need to verify 24 month history of this income type • Borrower’s eligible under Community Solutions can qualify with a 12-month history

Section 8 Voucher income allowed

GENERAL GUIDELINESGENERAL GUIDELINESUnderwriting OptionsUnderwriting GuidelinesOther General GuidelinesFannie Mae GeocoderMortgage Insurance

04/22/23

23

Underwriting Options

MCM DU GuidelinesTopic DescriptionAdvantages of using DU

• Quicker approval• Limited waiver of reps and warrants• Co-borrower with no credit can contribute up to 50% of the qualifying

income• Possible reduced documentation• Possible higher ratios than with manual underwriting• Possible lower credit score than with manual underwriting

DU recommendation of EA-I eligible with limited waiver of reps and warrants

Standard EA loan-level price adjustments (LLPAs) do not apply Up to 100% LTVs with 3% seller contributions Use of DU not required, but strongly encouraged

Reasons for using Manual UW

Broker is not a DU/DO subscriber Goal should be to transition to DU

Broker not participating in Expanded Approval (Refer with Caution) Under the following DU Recommendations:

“Approve/Ineligible,” “Refer/Ineligible,” “EA-II”, “EA-III,” “Refer with Caution IV,” “Refer with Caution,” or “Out of Scope”

Nontraditional credit history borrowers (Out of Scope) Borrowers with extenuating circumstances Borrowers needing additional flexibility through a targeted borrower option (Community Solutions)

Credit Score• Minimum Credit Score requirements:

▫ DU - No minimum credit score required except for IO loans (620)

• Manual Underwrite:

Program Units

Purchase and Rate & Term

Maximum LTV 1 / CLTV 2

Minimum Credit Score (Manual UW)

Community 100 Plus1 Unit

100 / 105% 620

97 / 105% 600Community 97

Community 2 Units 2 Units 97 / 105% 620

Community 3-4 Units 3 3-4 Units 3 95 / 105% 3 660 3

1 Cooperatives: Maximum LTV is 90%

2 Only community 2nds and closed-end 2nds are allowed

3 3-4 Units: A DU Approve/Eligible certificate is required

Credit HistoryBorrowers who do not meet the minimum credit score requirement or lack

credit history may be eligible if they meet the following requirements:

NO Credit Score

Manual UW ONLY!

A non-traditional credit report is acceptable:

One rental housing expense source (If no rental payment exists, then other credit references can be utilized as long as a total of four sources are documented for at least 12 months) One utility payment source such as telephone service or cable television service One additional utility or other credit source (medical, auto, life, school tuition, insurance policy or household/renter’s)

LESS than required credit score

The borrower has an insufficient credit score due to insufficient traditional credit history the credit will be considered acceptable provided the borrower has all of the following:

Minimum credit history of 3 tradelines at least 2 years old No more than nine accounts currently open (Accounts closed six months or more at application are not counted). No history of bankruptcy, foreclosure, collections or judgments. No history of delinquency in housing debt. No delinquencies for revolving accounts in the last 12 months and no more than one account 1x30 days in the 1 months before No delinquencies for installment accounts in the last 24 months, and no more than one account 1x30 days in the 12 months before Outstanding revolving account balances representing no more than 50% of aggregate credit lines at application. The account may not be paid off or paid down to qualify the borrower.

Other General GuidelinesTopic DU ManualMaximum DTI As

determined by DU

43% Community Solutions:

> 97% LTV: 45% DTI ; =< 97% LTV: 50% DTI

Reserves

As determined

by DU

MCM 100: NO RESERVES REQUIREDMCM 97: 1 Unit – NO RESERVES REQUIRED 2-4 Units – 2 Months PITI (May not be gifted) Community Solutions 100 – No Reserves required Community Solutions 97 - Same as MCM 97 except Gift funds are OK for reserves

Homebuyer Education

1 Unit: Participation in a homebuyer education program is recommended but not required

2-4 Units: Homebuyer education is required for all borrowers and co-borrowers who are 1st Time Homebuyers: All Income Properties: All borrower and co-borrowers must complete a landlord education course Education programs can be taken through a community counseling organization and require in-person, face-to-face tutorial, classroom, or workshop sessions. Participation in an education program must be documented by a “Certificate of Completion” that is submitted with the loan file

Prepayment Penalties

Not Available

Buydowns, Down Payment, Sources of Funds

Topic DescriptionTemporary Buydowns

2/1 & 1/1 Temporary Buydowns available 660 min. score Purchase Transactions Only Not permitted on 3-4 units Not permitted on 5/1 ARM

Temporary B/D Qualifying Rate

LTV > 95%: Qualify at Note Rate (DU or Manual)LTV =< 95%: Qualify at Note Rate PLUS 1% DU (Bought Down rate if Manual UW)

Borrower Contribution

1 Unit: No minimum contribution required 2 Units: The minimum down payment is 3% which must be from the borrower’s own funds 3-4 Units: The minimum down payment is 5% of which 3% must be from the borrower’s own funds

Interested Party Contribution

Loans > 90% LTV are eligible up to 3% interested party contributions (6% for 90% or less) Interested-party contributions may be used exclusionary to cover closing costs and prepaid expenses

Acceptable Sources of Funds for Down Payment, Closing Costs and Prepaid Items:

Borrower’s own funds, including checking, savings, certificate of deposit, Individual Development Account (IDA) Proceeds from loans secured by the borrower’s own assets Gift Funds from relative, fiance / fiancee, or domestic partner Unsecured loans or grants from a non-profit organization, government agency, or the borrower’s employer Cash-on-hand (allowed for 1-unit properties only) Approved Fannie Mae Community 2nds

Subordinate Financing**

Only an Approved Fannie Mae Community 2nd is allowedCommunity 2nd may be treated as a gift in DU rather than a Subordinate 2nd if:

1. Community 2nd is fully forgiven over time (both the P&I)2. Payment is deferred for no less than 5-years

**Must be included as Subordinate financing in CLTV calculation and all system calculations.

Submitting an MCM loan through DUTopic Description

Step 1 Input 1003 as you would normally

Step 2 In left navigation panel, select Community Lending

Step 3 Input the Metropolitan area or Co. and HUD median Income. If you don’t, DU will automatically fill it out for you

Step 4 Select “Yes” or “No” in Fannie Neighbors area

Step 5 Select “Yes” or “No” in Community Seconds Area

If the Community 2nds meet the 2 criteria below, select NO and input it as Gift Funds

1. Requires NO repayment within the first 5 years of the loan2. It meets Fannie Mae eligibility requirements

If it doesn’t meet the above criteria, select YES and input it as a Community 2nd loan

Must enter funds as subordinate financing it in the DOT and payment in the proposed housing section.

04/22/23

31

Determining Income Eligibility with the Fannie Mae Property GeoCoder

• No Income limits if property is located in a Fannie Neighbors area

www.efanniemae.com

• Workaround for new construction in a Fannie Neighbors census tract

▫ For new construction (the address is not in the system), use the Property Geo Coder to provide a printout for the loan file showing an existing property in the same census tract

▫ The appraisal must provide evidence that the subject property is in the same census tract

04/22/23

32

Mortgage InsuranceReduced MI Rates – Use MI chart below regardless of DU recommendation. Reduced or Custom MI is not acceptable. See sample combination below:

LTV RANGEMCM Minimum

CoverageStandard Minimum

Coverage

97.01 – 100% LTV95.01 – 97% LTV90.01 – 95% LTV85.01 – 90% LTV80.01 – 85% LTV

20%18%16%12%6%

35%35%35%30%25%

Borrower paid MI may be financed into loan up to max 100% CLTV (including financed MI). Borrower financed MI may be in whole or in part; check with MI company for availability of this option.

Financed MI allowed on 1 Unit up to 100% LTV. Max CLTV > 95% including financed MI must be delivered using Special Feature Code 574.

Example: Using standard MI or A- MI rates

$200,000 loan; 100% LTV, 30 Yr Fixed, 6.50% int. rate

Standard Rate

MI Monthly Payment

20% MI

$98

35% MI

$160

Savings

$62 / Month

MI A- Rate, 619 score $162 $237 $75 / Month

Mortgage InsuranceReduced MI Rates – Use MI chart below regardless of DU recommendation. Reduced or Custom MI is not acceptable. See sample combination below:

LTV RANGEMCM Minimum

Coverage

Standard Minimum Coverage

97.01 – 100% LTV95.01 – 97% LTV90.01 – 95% LTV85.01 – 90% LTV80.01 – 85% LTV

20%18%16%12%6%

35%35%35%30%25%

Borrower paid MI may be financed into loan up to max 100% CLTV (including financed MI). Borrower financed MI may be in whole or in part; check with MI company for availability of this option.

Financed MI allowed on 1 Unit up to 100% LTV. Max CLTV > 95% including financed MI must be delivered using Special Feature Code 574.

Community SolutionsCommunity SolutionsCommunity Solutions 100 & Community Community Solutions 100 & Community Solutions 97Solutions 97

• Community Solutions a targeted borrower option under the MCM is designed especially for America’s teachers, police officers, firefighters, health care workers, and military personnel.

• Community Solutions adds flexibilities to the MCM to help our country’s valued workers overcome obstacles to homeownership.

• The Community Solutions option may be especially attractive to borrowers who have access to an Employer-Assisted Housing benefit to cover gifted reserves, a temporary interest rate buydown, and/or down payment or closing costs.

04/22/23

35

Community SolutionsCommunity Solutions was designed especially to add flexibilities to

MyCommunityMortgage to help our country’s valued workers overcome obstacles to homeownership.

Eligible Borrowers 1. Education Professionals:• Public or private schools, kindergarten through post-secondary

levels;2. Public Safety:

• State or local law enforcement agency, fire department, or other sworn law enforcement or firefighting officers; or

3. Health Care Professionals:• Certified, accredited, or licensed healthcare workers such as

nurses, medical residents, pharmacists, technicians, or technologists.

4. Military Personnel

Qualifying Ratio 45% single qualifying ratio 43% with temporary interest rate buydown 50% with 2 months’ reserves and strong compensating factors (maximum 97% LTV)

Reserves One month’s reserves; gifting acceptable 2 months’ reserves for 50% qualifying ratio

Temporary Buydown

Underwritten at bought-down rate43% single qualifying ratio

Other 1-2 Unit Properties only Part-time and overtime income with 12 months’ history Manual underwriting required

Community HomeChoiceCommunity HomeChoice• Community HomeChoice is an option under

MyCommunityMortgage designed to meet the mortgage needs of low-to-moderate income borrowers with disabilities or have a family member with a disability.

• It offers extra flexibilities for borrower income and qualifying ratios, and allows a non-occupying co-borrower.

04/22/23

37

What is the Community HomeChoiceCommunity HomeChoice is an option under MyCommunityMortgage designed

to meet the mortgage needs of low-to-moderate income borrowers with disabilities or have a family member with a disability.

Eligible Borrowers

1. Borrower who are disabled2. Borrower’s who have a family member(s)

with disabilities living with them purchasing their first home Defined as handicapped under the federal

Fair Housing Act

Borrower Income Limit

Borrower Income limit 115% of AMI • See income limits page for higher income limit areas

Other • Non-occupying co-borrowers allowed• DU or Manual Underwriting in most cases• Manual underwriting: Higher ratios, gifted

reserves

Highlights of the MCM ProgramMCM Program Highlights

My Community 97 = 97/105% LTV/CLTV

My Community 100 Plus = 100/105% LTV/CLTV

Purchase and Rate & Term refinances

Flexibility on credit histories Non traditional credit accepted

Income Source flexibilities Boarder Income allowed (from relatives or non-relatives) Rental Income Allowed

Greatly Reduced Mortgage Insurance PremiumsEg., 20% coverage for 100% LTV, 18% for 97%, 6-16 for other LTVs >80%

Community Solutions Program Extra flexibilities with options to serve teachers/educational institution employees, police officers, firefighters, health care workers and eligible military personnel (eligible for higher ratios and gifted reserves)

Community HomeChoice ProgramAvailable for borrowers with a disability or borrowers with family members who have a disability living with them purchase their first home who may need greater underwriting flexibilities, including non-occupying co-borrowers

No minimum borrower contribution (1 unit)

MCM Highlights Cont’d…MCM Program Highlights

No reserves required in most cases

No minimum Fico score with a DU approval

5/1, 7/1 and 10/1 Fixed Period ARMS 30 and 40 year terms available

20, 25, 30 or 40-year Fixed Rate terms

10-year Interest Only option for 5/1 30 year term and 30 or 40-year Fixed Qualify at higher of note rate or fully indexed rate on fully amortized payment

Temporary Buydowns allowed for Fixed Rate, 7/1 and 10/1 ARMS

Available though DU or Manual Underwrite

Secondary financing only allowed with an approved Community 2nd

Qualifying community 2nds can be treated as a gift rather than a subordinate lien (DU only)

Owner-occupied primary residences only Borrower must not own any other property

2-4 Units allowed for borrowers who want to live in one and rent out the other 3-4 Units: DU Approve/Eligible up to 95/105% LTV/CLTV

FANNIE MAE FLEXIBLE FANNIE MAE FLEXIBLE 100100IntroductionEligible BorrowersHighlights of the ProgramDown Payment / Source of Funds

04/22/23

41

What is the Flexible Mortgage Program?

• The Flexible Mortgage loan program is Fannie Mae’s reward program for borrowers with average to above average credit history who have experienced difficulty in saving a down program for a home.

• Market Restrictions: All 50 states (CA, NV, WA, OR, AZ for FMC)

Targeted Borrowers:

1. Limited Funds for Down Payment

•Flex 100 (NO DP)•Flex 97 (3% DP)

2.Use savings for other investments or expenditures

• Use savings for moving expenses, etc.

2. Have Access to alternative sources

of funds

• Gifts, grants, unsecured loans from relatives,

employers, etc.

Eligibility GuidelinesTopic DescriptionEligible Borrowers U.S. Citizens

Permanent Resident Aliens Non-Permanent Resident Aliens

Eligible Properties 1 Unit SFR Detached or Attached PUD Detached or Attached Condominium

Income Limits Not Applicable

Sales Price Limits Not Applicable

Target Area/Fannie Neighbors

Not Applicable

Occupancy Owner Occupied Only

Purpose PurchaseRate & Term

Interested Party Contribution

Up to 3% of sales price (Premium pricing may be used to fund closing costs exceeding the minimum borrower contribution requirement)

Prepayment Penalty Not Available

Underwriting GuidelinesTopic Description

Underwriting Options

DU ONLY with Approve/Eligible, EA-I, EA-II, EA-III or Refer/Eligible

Minimum Credit Score

NO MINIMUM with a DU approval (IO loans require 620 Minimum)

Maximum DTI As determined by DU

Reserves As determined by DU

Temporary Buydowns

2/1 and 1/1 Eligible

Temporary Buydown Qualifying Rate

95% LTV – Qualify at the Note Rate<= 95% LTV – Qualify at the Note Rate PLUS 1%

Down Payment / Sources of FundsTopic Description

Borrower Contribution There isn’t a down payment required, however the borrower must contribute a minimum amount based upon one of the two choices:

Minimum of 3% of the purchase price which may be applied towards closing costs and/or prepaid items for Flex 97 or 100. (The 3% can be paid by any acceptable source of funds) OR

Minimum $500 cash from own funds for Flex 100 or Flex with sub financing (funds must be on deposit; acceptable sources of funds are checking, savings, CD or other depository accounts). All other funds from the list of “acceptable sources” of funds may not be included in the $500.

Acceptable Sources of Funds for Any Use

Borrowers own funds – checking, savings, CD or other depository accounts Proceeds from loans secured by borrower’s assets Gift funds from a relative Grants from non-profit agencies that do not have to be repaid Unsecured loans from a non-profit community organization, government agency, or the borrower’s employer

(Premium pricing is not an acceptable source of flexible funds)

Acceptable Sources of Funds for Down Payment & Closing Costs

Interested party contributions limited to 3% of the lesser of the sales price or appraised value Lender paid closing costs are limited to 2% of value

• Interested party contributions may not be applied to the borrower’s minimum required contribution. The contributions and premium pricing may only cover closing costs and prepaid items in excess of the borrower’s initial contribution

1st Program Types•FIXED

▫ Conventional Agency Fixed Rate 10-40 year terms

▫ Conventional Agency Fixed Rate Interest Only (10/20) 30 year term1

•ARMS▫ Conventional Agency T-Bill ARM (5/1, 7/1 and 10/1)

30 year term▫ Conventional Agency LIBOR ARM (5/1, 7/1 and 10/1)

30 year term▫ Conventional Agency LIBOR ARM Interest Only (5/1, 7/1 and

10/1) 30 year term

Max LTV / CLTVTopic Flex 97 Flex 100 Flex w/Sub

Financing

Maximum Loan Amount Fannie Mae Conforming loan limits apply

Maximum LTV/CLTV• Purchase, R&T Refinance

97% / 105% 100% / 105% 95% / 105%

• With IO Feature 97% / 100% 100% / 100% 100% / 100%

• Cash Out Refinance Not Eligible

Topic Flex 97 Flex 100 Flex w/Sub

Borrower Paid 35%LTV > 80%: MI Coverage

is 18%

Lower Cost (Must receive a DU approve or refer recommendation)

18% 25%

Mortgage Insurance

Highlights of the ProgramFlexible Mortgage Program Highlights

Maximum 100% LTV (minimum 90% LTV without secondary financing) No minimum LTV required for loans with secondary financing On refinance transactions, minimum 95.01% LTV

Up to 105% CLTV when originated with an approved Community 2nd

Available to be underwritten through FNMA DU

Interest Only Option (for the 1st 10 years of the loan) available on 30 Quality at higher of note rate or fully indexed rate on fully amortized payment

No Borrower Income restrictions

No Homebuyer Education required

Reserves determined by DU (usually 2 months)

Purchase and Rate & Term refinances

Owner-occupied primary residence only

Available Terms: 15, 20, 25, 30 year Fixed

INTEREST RATE, FEES, INTEREST RATE, FEES, MARKETING & SUPPORTMARKETING & SUPPORT

Interest RateAllowable PointsFees / CostsMarketingSupport

04/22/23

49

Interest Rate

Interest Rates for the MCM & Flexible programs are available on the FMC

website:

www.firstmtgcorp.com

OR

From your A/E

Points & FeesTopic Description

Origination Points

No Max Points – Negotiated between Broker/Borrower – Must not violate laws

Discount Points No Max Points – Negotiated between Broker/Borrower – Must not violate laws

Premium Pricing MCM – Must be used to cover Closing Costs & Prepaid ItemsFlex - Allowed

Fees See Standard Doc Order form on FMC Wholesale Website :

www.firstmortcorp.com

Broker can charge on top of FMC fees as long as it’s reasonable and customary

Marketing & Tools• Visit our website: www.firstmtgcorp.com for

marketing materials, tools, forms, training, etc.

• Weekly Trainings – Open Broker Web Trainings available every Friday – Contact your AE for a schedule!

• Compare your 100% financing opportunities• Resources are always available to help you find

the ideal mortgage for your borrower’s needs• Compare guideline requirements for our various

100% financing products

Thank you for joining our training today and we hope

the information provided was informative and will help you

build your business!

04/22/23

53