Understanding Streamline 203(k) Loans

1. Understanding Streamline 203(k) Loans

2. Program Highlights • FHA Renovation Program • Simplified process! • Up to $35,000 in repairs with no minimum! • No consultant required • Two draws per contractor • Contractor can receive up to 50% of total costs up front to defray cost of materials

3. Eligible Properties • 1-4 unit owner occupied properties • Town houses • Condos (interior only) • Row homes • HUD Repos

4. Common Improvements • New free standing appliances • Interior and exterior painting • Flooring, carpeting and tile • Energy efficient improvements • Other improvements that are a permanent part of the real estate

5. Other Eligible Improvements • Changes to eliminate obsolescence and reduce maintenance • Modernize plumbing, heating, AC and electrical systems • Install or repair well or septic system • Roofing, gutters, downspouts • Lead based paint abatement

6. Calculating Loan Amount • Use Maximum Mortgage Worksheet (Purchase) • Purchase price • Cost of repairs • Contingency Fund (optional) • Inspection fees and title updates • Permit Fees • Supplemental Origination Fee (1.5%) • Compare to 110% of after-improved value and use the lesser of the two calculations • Multiplied by the LTV Factor

7. Calculating Loan Amount • Use the Max Mortgage Worksheet (Refi) • Existing Debt • Total Cost of Repairs • Closing Costs, Prepaids and Discount Points • Less FHA MIP Refund • Compare to lesser of 110% of after-improved value or “As-is” Value + Renovation • Multiplied by the LTV Factor

8. Who Can Do the Work? • Borrower can select their own contractor • Should be licensed and insured if required by municipality • Should be able to document qualifications • Borrower can do their own work only if they can document their qualifications

9. Getting them Closed • Borrower collects contractor bids • Bids are used to order appraisal • Appraiser will do subject-to appraisal • Borrower and contractor sign contract

10. What Happens After Closing? • Customer receives a “welcome” package from M & T Bank – Mortgage Division • Work begins • Up to 50% can be paid to each contractor up front • Title update will be needed • Final inspection will be done to ensure workmanlike completion of work

11. Selling the Streamline K • Much faster process to get to closing • Include appliances and cosmetics • Up to 110% of after-improved value • Overcome borrower concerns about property

12. Get the message out to those who can build yourbusiness with you. • Realtors • General Contractors • Dealers • Community Groups

13. Questions? Please Contact Your Account Executive Or Broker Service Representative at 1-800-378-7212 Thank you for your business.