Financing CONDOS in Myrtle Beach

1. R. Roy Dunn – Coastal Financing Guru RDunn@remn.com (843) 446-4663 Financing CONDOSin Myrtle Beach March, 2013

3. Financing Condos in Myrtle Beach

4. The Spectrum of Condo Financing

6. Does the condo “HOTEL-LIKE NO project offer AMENITIES”? YES • HOA stability issues: • Timeshare or Fractional ownership in the project • HOA dues delinquency rate • Budgeted cash reserves • litigation NO! CONDOTEL • Direct sale to Fannie Mae! • ‘Normal’ terms, rates, and conditions. • 20% down required (no MI available on condos) • 30-year fixed rate available! • All ARM terms, available, too. 25% down payment required

7. Condotel financing requirements 2nd homes are preferred Investment properties have restrictions Square footage > 750 > 500 eligible for reduced LTV Credit score requirements Liquid asset (reserves) requirement Retirement funds not applicable Rule of thumb – 10-20% of outstanding mortgages Asset requirement is post-closing

8. Condotel financing terms 25% down payment ARMs – 3, 5, 7-year adjustment period 30-year term Fixed rate 15 - year (.75% higher rate than ARM) 30 - year (roughly 7.5% rate…notvery popular!)

9. On The Horizon Reducing down payment requirement to 20%! Reducing the level of liquid assets required for reserves! “Every day, our level of scrutiny is less than the day before.”

10. QUESTIONS?

11. R. Roy Dunn – Coastal Financing Guru RDunn@remn.com (843) 446-4663 FANNIE MAE Homestyle renovation program March, 2013

12. HomeStyle sales features • Owner Occupied: • 95% LTV to $417,000 • Second Home • 90% LTV to $417,000 • Appraisal is always based on After Improved value • LTV is always lower of the following: • Purchases: Sales price + renovation costs –or- after improved value • Refinance: Payoff + closing costs + renovation costs –or- after improved value

13. HomeStyle sales features • Mortgage insurance • Standard MI coverage • “Do It Yourself” not offered with most MI carriers • Genworth allows only 120 days to complete construction • Essent has very restrictive DTI based on credit score • For highly qualified Borrowers, the MI is significantly cheaper than FHA • Financed MI is allowed • 97% LTV to $417,000

14. HomeStyle sales features • No minimum amount of repairs • Maximum amount of renovation costs • 50% after improved value or non “do it yourself” • 10% after improved value on “do it yourself” • Renovations can include: • Fences • Decks/patios • Luxury items • Repair of out buildings • Complete partially built REO’s • Renovation cannot include • New construction • Construction of new out buildings

15. Program highlights • 1-2 unit owner occupied and 1 unit “true” second/vacation homes • No investment properties • Condo’s limited to 80%LTV • Renovation work must be permissible under the bylaws of the HOA • Work is limited to the interior of the unit, including installation of fire walls in the attic • Homeowners' Association must provide written approval for all renovation work to be completed

16. Program Highlights • Maximum number of 3 contractors allowed • “Do It Yourself” option • Borrower must provide evidence of his/her qualification to complete repairs • No sweat equity; reimbursement for cost of materials only • TX will not allow payment directly to the Borrower for material costs • Limited to 10% of the as-completed value of home • 1 unit properties only • Limited MI options- see product guides • Product guide has been created for program specifics

17. QUESTIONS?