a complete guide to the calstrs 80/17 purchase loan - updated 1-15-09

A Complete Guide to the CalSTRS 80/17 Purchase Loan

Thank You for Attending

We Will Begin in a MomentClass will begin at 7:00pm

Presented By:Broadview Mortgage Corporation

Presenter:

Scott Schang

Contact Information:

Phone: [email protected]


The Purpose and Goals of this Class



• To Create and Empower Home Owners




• Educate you about the current California Real Estate market and Specialty Financing Options for Education Professionals





• Empower you with the ability to make educated decisions in the home buying process





• Empower you with the ability to make educated decisions in the home buying process

• Introduce you to Broadview Mortgage Corporation as your CalSTRS 80/17 expert


Topics We Will Cover In This Class



• A Complete Guide to CalSTRS 80/17



• A Complete Guide to CalSTRS 80/17– 100% option for members of CalPERS




• IRS Guidelines for $7,500 Federal Tax Credit just released – The Details




• IRS Guidelines for $7,500 Federal Tax Credit just released – The Details

• Wrap Up and Take Aways



• Ask Questions throughout presentation



• Ask Questions throughout presentation– You may type questions in at any time during the

presentation – Questions box on your screen





– CalSTRS 80/17 specialists are standing by to answer your questions during the presentation






– The only dumb question is the one you don’t ask






– The only dumb question is the one you don’t ask

Write number down now in case you get disconnected

1-866-667-6724

A Complete Guide to CalSTRS 80/17


• Who’s Eligible for a CalSTRS 80/17?


• Who’s Eligible for a CalSTRS 80/17?– Any employee of a California public school or

community college



community college• Can work in any capacity



community college• Can work in any capacity• Can work in school district



community college• Can work in any capacity• Can work in school district• Pay check stub from public school system




– If you are eligible for CalSTRS pension benefits




– If you are eligible for CalSTRS pension benefits• Provide certificate of eligibility




– If you are eligible for CalSTRS pension benefits• Provide certificate of eligibility• Do not have to be currently employed




– If you are eligible for CalSTRS pension benefits• Provide certificate of eligibility• Do not have to be currently employed

– Any eligible borrower makes family eligible


• How CalSTRS benefits from the 80/17


• How CalSTRS benefits from the 80/17– CalSTRS pension fund invests in mortgage notes

as mortgage backed securities



as mortgage backed securities• CalSTRS is not a lender and does not do loans




– Payments go back into CalSTRS pension fund





– Contributes to the growth and stability of your retirement system as a member of CalSTRS





– Contributes to the growth and stability of your retirement system as a member of CalSTRS

– Broadview Mortgage is an approved Lender on CalSTRS website - See link on site


• CalSTRS 80/17 Compared to FHA



• Lower Down Payment than FHA



• Lower Down Payment than FHA– 3.5% Down as of January 1st, 2009




• Interest Rates as compared to FHA




• Interest Rates as compared to FHA• No UPFRONT Mortgage Insurance Premium





– FHA increased to 1.75%






• No MONTHLY Mortgage Insurance






• No MONTHLY Mortgage Insurance– FHA increased to .55%







• FHA vs CalSTRS Closing Costs







• FHA vs CalSTRS Closing Costs– FHA lower up front / CalSTRS lower total cost







• FHA vs CalSTRS Closing Costs– FHA lower up front / CalSTRS lower total cost

• CalSTRS - No cost to lock or rate



• FHA is a GREAT program as a Plan B



• FHA is a GREAT program as a Plan B– Low down payment requirements



• FHA is a GREAT program as a Plan B– Low down payment requirements– Low up front closing costs



• FHA is a GREAT program as a Plan B– Low down payment requirements– Low up front closing costs– Aggressive interest rates



• FHA is a GREAT program as a Plan B– Low down payment requirements– Low up front closing costs– Aggressive interest rates– 6% seller concessions from seller



• FHA is a GREAT program as a Plan B– Low down payment requirements– Low up front closing costs– Aggressive interest rates– 6% seller concessions from seller– Flexible qualifying guidelines



• FHA is a GREAT program as a Plan B– Low down payment requirements– Low up front closing costs– Aggressive interest rates– 6% seller concessions from seller– Flexible qualifying guidelines– No penalty for lower credit scores



• FHA is a GREAT program as a Plan B– Low down payment requirements– Low up front closing costs– Aggressive interest rates– 6% seller concessions from seller– Flexible qualifying guidelines– No penalty for lower credit scores– CalPERS members may be eligible for 100%

financing using FHA 1st mortgage



• FHA is a GREAT program as a Plan B– Low down payment requirements– Low up front closing costs– Aggressive interest rates– 6% seller concessions from seller– Flexible qualifying guidelines– No penalty for lower credit scores– CalPERS members may be eligible for 100%

financing using FHA 1st mortgage

• If you are eligible and qualify for the CalSTRS 80/17 there is simply no comparison. Period


• CalSTRS 80/17 – Max Loan Amounts



• Conforming Loan Amount



• Conforming Loan Amount – Up to $417,000




• First mortgage loan amount




• First mortgage loan amount– $521,250 Max Purchase Price





• Jumbo Loan Amount





• Jumbo Loan Amount – Up to $536,082






• First mortgage loan amount






• First mortgage loan amount• Max total loan amounts $650,000







– Up to $670,103 Max Purchase Price







– Up to $670,103 Max Purchase Price

• Jumbo interest rate is typically 1% higher


• CalSTRS 80/17 – Property Qualifications



• Eligible Properties



• Eligible Properties – Single Family Residence - Detached



• Eligible Properties – Single Family Residence - Detached– Condominiums / Townhomes - Attached



• Eligible Properties – Single Family Residence - Detached– Condominiums / Townhomes - Attached– Planned Urban Development (PUD)




• Must be owner Occupied




• Must be owner Occupied• Must be located in State of California




• Must be owner Occupied• Must be located in State of California• Cannot own any other properties




• Must be owner Occupied• Must be located in State of California• Cannot own any other properties

– Mobile home not on a permanent foundation and on leased lot/park is not considered real property


• CalSTRS 80/17 – Loan Structure



• Max 1st Loan Amount - 80%



• Max 1st Loan Amount - 80%– Qualify on 80% Only



• Max 1st Loan Amount - 80%– Qualify on 80% Only– Increases your purchasing power




• Max 2nd Loan Amount - 17%




• Max 2nd Loan Amount - 17% – No payments for first 5 years





• 30 Year fixed rate loan only





• 30 Year fixed rate loan only• Same interest rate for both loans





• 30 Year fixed rate loan only• Same interest rate for both loans• One time free float down – both loans


• CalSTRS 80/17 – Second Mortgage



• Second Mortgage Loan



• Second Mortgage Loan– Deferred payments for 5 Years



• Second Mortgage Loan– Deferred payments for 5 Years– Simple interest accrues for deferred period



• Second Mortgage Loan– Deferred payments for 5 Years– Simple interest accrues for deferred period – Accrued interest added to principle balance



• Second Mortgage Loan– Deferred payments for 5 Years– Simple interest accrues for deferred period – Accrued interest added to principle balance – Fully amortized over remaining 300 months




• No surprises guarantee - You will know exactly what your payments will be




• No surprises guarantee - You will know exactly what your payments will be– Although you qualify on first mortgage only, we will

always send you a good faith estimate with total payment


• CalSTRS 80/17 – Down Payment



• Down payment requirements



• Down payment requirements– 3% down payment– 1% from buyer’s own funds




• Sources of Down Payment and Closing Costs




• Sources of Down Payment and Closing Costs– Down Payment - Borrower's own funds




• Sources of Down Payment and Closing Costs– Down Payment - Borrower's own funds – Down Payment - Gift from relative




• Sources of Down Payment and Closing Costs– Down Payment - Borrower's own funds – Down Payment - Gift from relative – Down Payment – Grant from government agency




• Sources of Down Payment and Closing Costs– Down Payment - Borrower's own funds – Down Payment - Gift from relative – Down Payment – Grant from government agency– Closing Costs - Seller contributions up to 3%




• Sources of Down Payment and Closing Costs– Down Payment - Borrower's own funds – Down Payment - Gift from relative – Down Payment – Grant from government agency– Closing Costs - Seller contributions up to 3% – Closing Costs - Borrower's own funds




• Sources of Down Payment and Closing Costs– Down Payment - Borrower's own funds – Down Payment - Gift from relative – Down Payment – Grant from government agency– Closing Costs - Seller contributions up to 3% – Closing Costs - Borrower's own funds – Closing Costs - Gift from relative


• Additional Low and No Down Payment Options for CalPERS Members


• Additional Low and No Down Payment Options for CalPERS Members– Use FHA 1st to 96.5% LTV with personal loan


• Additional Low and No Down Payment Options for CalPERS Members– Use FHA 1st to 96.5% LTV with personal loan– Maximum purchase price $350,000


• Additional Low and No Down Payment Options for CalPERS Members– Use FHA 1st to 96.5% LTV with personal loan– Maximum purchase price $350,000– Can borrow up to 5% of value of home


• Additional Low and No Down Payment Options for CalPERS Members– Use FHA 1st to 96.5% LTV with personal loan– Maximum purchase price $350,000– Can borrow up to 5% of value of home– Up to 50% of Member’s current contribution



• Maximum $18,421



• Maximum $18,421– Personal loan secured by PERS




• Not borrowed from PERS account




• Not borrowed from PERS account– Minimum loan term is 1 year / Max is 15 years




• Not borrowed from PERS account– Minimum loan term is 1 year / Max is 15 years– Must be primary residence




• Not borrowed from PERS account– Minimum loan term is 1 year / Max is 15 years– Must be primary residence– Can be used toward down payment only




• Not borrowed from PERS account– Minimum loan term is 1 year / Max is 15 years– Must be primary residence– Can be used toward down payment only– Attend 100% Financing for CalPERS class


• Other CalSTRS 80/17 Highlights



• No Income limits



• No Income limits• You do not have to be a first time homebuyer



• No Income limits• You do not have to be a first time homebuyer• You cannot own any other properties



• No Income limits• You do not have to be a first time homebuyer• You cannot own any other properties• Minimum FICO Scores




– 620 for Loan Amounts up to $400,000




– 620 for Loan Amounts up to $400,000 – 680 for Loan Amounts up to $650,000





• Combined 1st & 2nd Loans






• Interest Rate lock requires Property Address






• Interest Rate lock requires Property Address– Typically rate is locked when offer is accepted






• Interest Rate lock requires Property Address– Typically rate is locked when offer is accepted

• If offer falls out – Rate lock is lost as well


• CalSTRS 80/17 - What Makes it Different



• Cannot buy interest rate down



• Cannot buy interest rate down– Below market / Set by CalSTRS




• Cannot “roll in” closing costs into rate




• Cannot “roll in” closing costs into rate• Fannie Mae – Pricing Adjustments





– Declining Market - .25%





– Declining Market - .25%– High LTV Flex 97 - .5%





– Declining Market - .25%– High LTV Flex 97 - .5%– Risk based credit score pricing






• None at 740 FICO






• None at 740 FICO

• Much lower cost than FHA but may require more money brought to the closing table


• CalSTRS 80/17 – Review



– Only 3% down payment required



– Only 3% down payment required– No upfront mortgage insurance premium



– Only 3% down payment required– No upfront mortgage insurance premium– No monthly mortgage insurance premium



– Only 3% down payment required– No upfront mortgage insurance premium– No monthly mortgage insurance premium– Qualify for 80% first mortgage only



– Only 3% down payment required– No upfront mortgage insurance premium– No monthly mortgage insurance premium– Qualify for 80% first mortgage only– 17% second mortgage deferred for 5 years



– Only 3% down payment required– No upfront mortgage insurance premium– No monthly mortgage insurance premium– Qualify for 80% first mortgage only– 17% second mortgage deferred for 5 years– No income or first time home buyer limits



– Only 3% down payment required– No upfront mortgage insurance premium– No monthly mortgage insurance premium– Qualify for 80% first mortgage only– 17% second mortgage deferred for 5 years– No income or first time home buyer limits– Up to 3% seller concessions for closing costs



– Only 3% down payment required– No upfront mortgage insurance premium– No monthly mortgage insurance premium– Qualify for 80% first mortgage only– 17% second mortgage deferred for 5 years– No income or first time home buyer limits– Up to 3% seller concessions for closing costs– Rates set by CalSTRS



– Only 3% down payment required– No upfront mortgage insurance premium– No monthly mortgage insurance premium– Qualify for 80% first mortgage only– 17% second mortgage deferred for 5 years– No income or first time home buyer limits– Up to 3% seller concessions for closing costs– Rates set by CalSTRS– One time Free float down



– Only 3% down payment required– No upfront mortgage insurance premium– No monthly mortgage insurance premium– Qualify for 80% first mortgage only– 17% second mortgage deferred for 5 years– No income or first time home buyer limits– Up to 3% seller concessions for closing costs– Rates set by CalSTRS– One time Free float down– Interest rate can be locked once offer accepted


• Bait and Switch “Red Flags”


• Bait and Switch “Red Flags”– Community programs designed to benefit specific

members of the education community



members of the education community– CalSTRS loans have fixed rates and fees




• Buyer Benefit - Lenders can’t charge more




• Buyer Benefit - Lenders can’t charge more– What to watch out for……





• Agent recommends lender but not program





• Agent recommends lender but not program• Lender isn’t CalSTRS 80/17 Expert





• Agent recommends lender but not program• Lender isn’t CalSTRS 80/17 Expert• FHA is presented as an option/solution






– Underwriting guidelines changed






– Underwriting guidelines changed– Approval can not be changed if locked







• CalSTRS loans can close in weeks – Call us!







• CalSTRS loans can close in weeks – Call us!– Escrow can often be delayed without penalty

$7,500 Federal Tax Credit


• No-interest loan paid back over 15 years


• No-interest loan paid back over 15 years– Begin paying back 2 years after claim



• Must purchase on or before July 1st, 2009



• Must purchase on or before July 1st, 2009– Between April 8th, 2008 and July 1st , 2009




• Must be first time home buyer




• Must be first time home buyer– Can not have owned in past 3 years





• 10% of purchase price up $7,500






• $7,500 - Married filing joint or Single taxpayer






• $7,500 - Married filing joint or Single taxpayer

• Married filing separate $3,750


• Home bought in 2008 can be claimed on 2008 returns



• Home bought in 2009 can be claimed on 2008 (or amended 2008) return




• Income limit is $150,000 for married couple




• Income limit is $150,000 for married couple– Phase out maximum is $170,000





• Income limit is $75,000 for single taxpayer





• Income limit is $75,000 for single taxpayer– Phase out maximum is $95,000






• Loan is paid back in 15 equal installments






• Loan is paid back in 15 equal installments– Deducted from refund on future returns






• Loan is paid back in 15 equal installments– Deducted from refund on future returns– Added to tax liability on future returns


• You would be ineligible for Tax Credit if:


• You would be ineligible for Tax Credit if:– Your income exceed the phase-out range


• You would be ineligible for Tax Credit if:– Your income exceed the phase-out range– You buy your home from a close relative. This

includes your spouse, parent, grandparent, child or grandchild




– You stop using your home as your main home




– You stop using your home as your main home– You sell your home before the end of the year




– You stop using your home as your main home– You sell your home before the end of the year– You are a nonresident alien




– You stop using your home as your main home– You sell your home before the end of the year– You are a nonresident alien– Your home financing comes from tax-exempt

mortgage revenue bonds - CalHFA




– You stop using your home as your main home– You sell your home before the end of the year– You are a nonresident alien– Your home financing comes from tax-exempt

mortgage revenue bonds - CalHFA– You owned another main at any time during the

three years prior to the date of purchase


Wrap up and Take Aways



– We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, VA, Conventional and Jumbo Loans




– We are a direct Lender that specializes in FHA Refinance, Streamline and Purchase loans.





– We are more than happy to be your “second opinion” if you are already working with someone





– We are more than happy to be your “second opinion” if you are already working with someone

– We are committed to educating and empowering homeowners - Join us for future classes

A Complete Guide toCalSTRS 80/17


– You will receive a “Thank you” email with links to the information we’ve talked about here today

• Copy of power point presentation• Secure on-line loan application• Links to tools and resources we talk about in

all of our classes• Link to CalSTRS website to follow rates• Dream Home Finder request• A schedule of all upcoming classes

Upcoming Home Buyer Classes


• A Complete Guide to Buying Foreclosures and Short Sales



• A Complete Guide to Closing Costs and the Good Faith Estimate




• A Complete Guide to the CalSTRS 80/17 Home Purchase Program





• A First Time Home buyer’s Complete Guide to Credit and Qualifying






• A Complete Guide to the CalPERS Home Loan Program – No down option







• A First Time Home Buyer’s Complete Guide to Hiring a Real Estate Agent and Finding the Best Deals







• A First Time Home Buyer’s Complete Guide to Hiring a Real Estate Agent and Finding the Best Deals

Check back often for upcoming classes

Thank you for Attending

You input is ValuablePlease complete 2 question

survey when you log off

Presented By:Broadview Mortgage Corp.

Presenter:

Scott Schang

Contact Information:

Phone: [email protected]

a complete guide to the calstrs 80/17 purchase loan - updated 1-15-09

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