2010 NSP FIRST Mortgage Loan Program Summary Approved by THDA 05/07/2010

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1 Description: Eligible Applicants: Maximum Household Interest Rate: Loan Term/ Type: Pre-Payment Penalty Subject to Recapture: Required Reserves: Down Payment Minimum Investment: Maximum Loan Amount: Homebuyer Education: The United Housing FIRST Mortgage Loan Program is a first mortgage loan program designed to assist low to moderate borrowers achieve home ownership. Not limited to First Time Homebuyers. Available on NSP funded properties only. This program is designed to serve income levels up to 120% of Area Median Income. Income is calculated per NSP guidelines. Conforms to income guidelines, not more than 120 AMI % fixed rate, subject to change (rate based on THDA Great Start prevailing rate) see THDA Great Start Program 30 year Conventional (first mortgage). Loan amount will be limited by debt-to-income ratios 31/45% of qualifying borrower(s) not to exceed 45%. Late Charge Fee: 5%. No pre-payment penalty. Yes As required by loan type. 1% of the Sales Price. (Must be from the borrowers own funds). Minimum investment based on 1% Sales Price When subordinate financing is used, the combined Loan To-value may not exceed 105%. Buydowns not allowed. Required. Closing Costs: Maximum 1% Origination Fee, $ Underwriting Fee, Fees $ Processing Fee, $12.50 Credit Report Fee; $24.00 if Joint, $16.00 Flood Certification Fee, $16.00 Wire Transfer Fee. The borrowers closing costs can come from gifts, grants, and/or seller contributions; i.e. or from the borrowers own funds. Cash on hand is allowed, (guidelines apply). Reasonable attorney fees and costs in progress.

2 Property Type: Credit Guidelines: United Housing NSP Single Family Properties only. Primary residence only. Non-occupied borrowers/ coborrowers are not acceptable. Approved for Memphis and Shelby County residents only. Eligible homes located in Shelby County. Credit underwriting focused on past 24 months. No more than 3 x 30 within the past 24 months. revised 12/02/2010 Car Payment and Installment loans: No more than 1x30 days in the past 12 months. Revolving Accounts: You should not have any payments 60 days late. No more than 1x 30 days late in the past 12 months. Collections, Judgments, Liens: Not acceptable in past 12 months. Judgments must be paid in full. Repossessions: same as Foreclosures, except that it cannot have a deficiency balance Medical Collections: Not considered. Bankruptcies: ALLOWED: Chapter 13/ Chapter 7/ Foreclosures/ Foreclosure Prevention ALLOWED; requires at least two years since dismissed or discharged date; however, no more than two Chapter 13 or Chapter 7 filings within the past seven years allowed. Detailed credit explanation needed along with satisfactory re-established credit. Subject to additional credit underwriting guidelines and approval. revised 11/08/2010

3 Active Chapter 13: Chapter 13 Discharged: Chapter 13 Dismissed: Student Loans: Foreclosure/ Deed n Lieu Predatory Loans/ ARMS / Short Sales ALLOWED: MUST obtain approval from court. Subject to Credit guidelines listed above and 12 satisfactory payments paid through wage earner plan required. ALLOWED; must be at least 4 non-traditional lines of credit verified for past 12 months with satisfactory credit payment history. Only 2 additional lines if 12 months of housing or rental history is verified. Subject to Credit Guidelines listed above. ALLOWED: Must be 12 months past dismissal date. Subject to Credit guidelines listed above. Deferred at least six (6) months. ALLOWED: Two years must have past since Foreclosure. Must pertain to primary residence only and caused by circumstances out of your control, such as; death of the primary wages earner, layoff, or long term serious illness. Credit explanation letter and documentation required. Mortgage history must reflect 0x30 days in past 24 months prior to financial documented mortgage hardship. Current rental history must be 0x30 days since hardship resolution. Subject to Credit guidelines above. ALLOWED: Must be documented, i.e.; Note, Deed and HUD I; subject to Credit guidelines above and loan committee approval. Six Month Lease: Not applicable if customer is mortgage ready and 620 credit score which is determined by the UHI underwriting guidelines. Non-Traditional and Allowed; must be at least 4 non-traditional lines of credit and Alternative Credit: verified for past 12 months, only 2 additional lines if 12 months of housing history is verified. Credit Score Escrow accounts: Reserves: 575 (subject to credit guidelines) Required for Property Taxes and Homeowners Insurance. 2 months required for City taxes, County taxes and Home Owners Insurance.

4 Assumptions: Subordinate Financing: Appraisals: Not permitted. Soft second mortgages are allowed as long as the borrower meets the minimum cash contribution (if applicable) and the combined loans are still within the allowable debt ratios and the cumulative maximum loan-to-value. When subordinate financing is used the combined LTV may not exceed 105%. Per NSP guidelines. Servicing: FAHE: Tina Cain: Phone ext 114 Toll free Fax P O Box 908, Berea, KY Website: Income: Contacts: Lease-Purchase: The maximum household income shall not exceed 1the maximum household limits for NSP. Two full years of employment must be verified. School or military is considered employment. Gaps in employment up to 60 days in the last 2 years are permitted. Receipt of public or private assistance will not be a disqualifying factor. Parttime jobs require 12 month history Past two years tax returns are required if self-employed. Non-taxable income can be grossed up 25%. United Housing, Inc. Dorothy A. Williams- Lending Coordinator 51 North Cooper Street Memphis, TN Phone: Fax: [email protected] The lease- purchase option will be utilized by CDCs and Local nonprofit housing providers to expand homeownership opportunities. NSP housing providers will have the option to offer properties under a lease purchase arrangement. In this scenario, the participant will underwrite a homebuyer s credit situation, and if there are credit issues that can be resolved within 12 to 18 months, a lease with an option to purchase can be

5 created. During the lease- purchase period the homebuyer will work toward resolution of financial issues with support of counseling and training from the NSP partner. In order to maximize the lease- purchase option, NSP partners will establish an escrow account for each prospective buyer. Funds in this account will be used for down payment and closing costs when securing a mortgage. NOTE: See NSP/ Down Payment Assistance Guidelines and HOPE PLUS Program Key Guidelines for additional guidelines that may apply.