An Agent's Guide to Reverse for Purchase Financing

An Agent's Guide to Reverse for Purchase Financing

Capture More Sales and Closings in the 55+ Market EVAN KLAUS Corporate Purchase Program Leader 443-974-3504 [email protected] reversefunding.com

NOT FOR CONSUMER USE. © 2022 Reverse Mortgage Funding LLC, 1455 Broad St., 2nd Floor, Bloomfield, NJ 07003. Company NMLS ID # 1019941. The information herein is not intended as legal, tax or financial planning advice and should not be relied on or construed as such. These materials have not been reviewed, approved, or issued by FHA, HUD, or any government agency. The company is not aliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency.

• What is reverse mortgage purchase financing? • What are homebuyers saying? • How does reverse mortgage purchase financing work? • Who is eligible for reverse mortgage purchase financing? • How can your business benefit?

The Reverse Mortgage Purchase Financing Option Find out how reverse mortgage financing can benefit your clients and your business.

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The Reverse Mortgage Purchase Financing Option

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Open the door to an untapped market of buyers

Reverse mortgages are often under-utilized and misunderstood by would-be buyers. Yet they can be a good funding option for new home buyers already in or approaching retirement age. It's also available to borrowers as young as 55 in select states. Higher minimum age requirements may apply.*

3 *Available to borrowers as young as 55 in select states only. Higher minimum age requirements may apply. Visit www.reversefunding.com/equity-elite for details.

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What is reverse mortgage purchase financing? • A financing tool that can allow your older clients to buy a new house or condo by combining a one-time investment of their funds with reverse mortgage loan proceeds to complete the purchase • Monthly principal and interest payments are optional . As with any mortgage, the homeowner, must meet their obligations to keep current with property taxes, insurance, and maintenance • The owner builds less equity—but unlike a traditional mortgage, the borrower is not at risk of owing more than the home is worth at the time of repayment

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Borrower Qualifications • Age 55 and older (Higher min. age requirements may apply * ) • Specific down payment percentage required • Borrower must meet ongoing loan obligations †

• Borrower must be purchasing primary residence • Down payment from allowable source • Borrower must participate in loan counseling

* Available to borrowers as young as 55 in select states only. Higher minimum age requirements may apply. Visit www.reversefunding.com/equity-elite for details. † As with any mortgage, the borrower must meet their loan obligations, keeping current with property taxes, insurance, and maintenance.

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Advantages for your 55+ clients • Buyers can get additional spending power. Buyers can increase their buying power and maximize their cash investment in a new home. They can more comfortably afford an upscale home or a property in a more desirable location • Buyers enjoy a flexible payment feature. Monthly principal and interest payments are optional, * improving cash flow • Buyers can make a purchase without necessarily jeopardizing their nest egg for retirement. Most buyers can keep more of their cash than they can with a conventional mortgage or all-cash purchase, generally leaving their savings for retirement intact

*As with any mortgage, the borrower must meet their loan obligations, keeping current with property taxes, insurance, and maintenance.

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What Homebuyers are Saying

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Source: RMF Reverse Mortgage Purchase Financing Customer Survey Responses, March 2021

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Reverse mortgage financing was key for homebuyers Would you still have purchased your new home if you did not have reverse mortgage purchase financing as an option?

32.0% 43.8% 24.3%

Yes, definitely Probably not No, definitely not

Source: RMF Reverse Mortgage Purchase Financing Customer Survey Responses, March 2021

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Homebuyers who used reverse mortgage purchase financing also had increased buying power How much more expensive was the home you purchased compared to what you initially planned, thanks to the reverse mortgage purchase financing option?

$25,000 more $50,000 more $75,000 more Over $100,000 more

16.8% 27.1% 16.8% 39.3%

Source: RMF Reverse Mortgage Purchase Financing Customer Survey Responses, March 2021

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Homebuyers' decisions were influenced by the availability of this financing option How important was the reverse mortgage financing purchase option in your decision to purchase the specific home that you bought?

Very important Somewhat important Not important

72.8% 23.1% 4.7%

Source: RMF Reverse Mortgage Purchase Financing Customer Survey Responses, March 2021

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Reverse mortgage purchase financing gave borrowers increased spending power Did the reverse mortgage purchase financing option allow you to buy a more expensive home in a more desirable location than you had originally planned?

63.3% 36.7%

Yes No

Source: RMF Reverse Mortgage Purchase Financing Customer Survey Responses, March 2021

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Reverse mortgage purchase financing makes people more financially comfortable in retirement Did the reverse mortgage purchase financing option help you feel more comfortable with your financial planning goals for retirement?

72.8% 23.1% 4.7%

Yes, much more comfortable Somewhat more comfortable No, it had no impact

Source: RMF Reverse Mortgage Purchase Financing Customer Survey Responses, March 2021

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How Does Reverse Mortgage Purchase Financing Work?

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Home Equity Conversion Mortgage (HECM) reverse mortgage purchase financing • Available to borrowers aged 62 or older • Loan amounts up to $970,800 • The home being purchased must be new primary residence • Eligible properties include: single-family homes,

Program Highlights Federally-insured * Created in 2009 Typically, a down payment of 45% to 62% —depending on borrower age—is required †

FHA-approved condominiums, townhouses or Planned Unit Developments (PUDs), and manufactured homes meeting HUD guidelines • Down payment cannot be borrowed—it must come from savings, the sale of the current house, or a gift from family

*This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency. † This down payment range assumes closing costs will be financed into the loan. The information being displayed is for illustrative purposes only. Actual cash required may vary and is based on age of youngest borrower, interest rate, home value, and other factors. Please contact Reverse Mortgage Funding LLC (RMF) for details about credit costs and terms.

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Equity Elite ® reverse mortgage purchase financing

• Available to homebuyers as young as age 55 in select states * • Allows seller concessions of up to 6% of the sales price towards origination fees and other closing costs • A slightly higher down payment of 55% to 75% † of the purchase price is typically required (could be as low as 42% for older clients) • Loan amounts up to $4 million ‡ for higher-value homes • Available for more condominiums—FHA-approval not required || • No mortgage insurance premium can mean lower up-front costs

*Available to borrowers as young as 55 in select states only. Higher minimum age requirements may apply. Visit www.reversefunding.com/equity-elite for details. † This down payment range assumes closing costs will be financed into the loan. The information being displayed is for illustrative purposes only. Actual cash required may vary and is based on age of youngest borrower, interest rate, home value, and other factors. Please contact Reverse Mortgage Funding LLC (RMF) for details about credit costs and terms. ‡ Not applicable in all states; MA imposes a maximum loan amount of $ 2 MM. Visit www.reversefunding.com/equity-elite for details. || This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency.

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Required down payment for HECM reverse mortgage purchase financing Purchase Price $335,000 $375,000 $425,000 $465,000 Cash Required * Age 62 $176,467 $196,707 $222,700 $241,597 Age 67 $165,747 $184,707 $208,157 $226,717 Age 71 $156,702 $174,582 $196,682 $214,162 Age 75 $147,992 $164,832 $185,682 $202,072 *This down payment range assumes closing costs will be financed into the loan. The information being displayed is for illustrative purposes only. Actual cash required may vary and is based on age of youngest borrower, interest rate, home value, and other factors. Please contact Reverse Mortgage Funding LLC (RMF) for details about credit costs and terms.

© 2022 Reverse Mortgage Funding LLC. NMLS ID # 1019941. NOT FOR FURTHER DISTRIBUTION.

Required down payment for Equity Elite ® reverse mortgage purchase financing Purchase Price $500,000 $550,000 $600,000 $650,000

$700,000 $750,000

Cash Required *

Age 55 Age 60 Age 65 Age 70 Age 75 Age 80

$312,536 $343,406 $374,294 $401,931 $285,036 $313,156 $338,294 $366,181 $263,519 $286,756 $312,494 $338,231 $242,019 $265,856 $289,694 $313,531 $223,519 $245,506 $267,494 $289,481 $207,519 $227,906 $248,294 $268,681

$432,569 $463,206 $394,069 $421,956 $363,969 $389,706 $337,369 $361,206 $311,469 $333,456

$289,069 $309,456 *This down payment range assumes closing costs will be financed into the loan. The information being displayed is for illustrative purposes only. Actual cash required may vary and is based on age of youngest borrower, interest rate, home value, and other factors. Please contact Reverse Mortgage Funding LLC (RMF) for details about credit costs and terms.

© 2022 Reverse Mortgage Funding LLC. NMLS ID # 1019941. NOT FOR FURTHER DISTRIBUTION.

• Do I have to sell my current home before I can buy a new home with reverse mortgage purchase financing? No, unless it has an FHA mortgage on it OR you need the proceeds to use for the required investment in the home you are buying. The new home must also be your primary residence. • Who owns the home? You own the home and your name is on the title. As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance, and maintenance. • What if I live in my new house for 20 years and wind up owing more than it is worth? The reverse mortgage purchase financing option has a non-recourse feature. You will not owe more than the home is worth when the loan is repaid. • What if I live in my house for 10 years and the home builds $100,000 in equity? It works just like a traditional sale process—sell the home, pay off the loan and any remaining proceeds from the sale go to you or the estate. Frequently asked questions by consumers

15 This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency.

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A Growing Need for This Type of Financing

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Buyers who financed their home purchase

Roughly 70% of buyers aged 56 to 95 have financed their home purchase

Source: 2021 NAR Home Buyer and Seller Generational Trends Report

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Median percent down payment

Average down payment for buyers aged 56 to 95 is around 20% for a traditional mortgage

Source: 2021 NAR Home Buyer and Seller Generational Trends Report

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Homebuyer trends by age

37% of homebuyers are aged 56 to 95

13 Source: 2021 NAR Home Buyer and Seller Generational Trends Report

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Grow Your Business with Reverse Mortgage Financing

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How reverse mortgage purchase financing can help your business

Increases your buyers’ purchasing power

Increases your sales

Increases your listings

Helps older buyers feel more secure about their savings

Grows your business with 55 and older * clients

*Available to borrowers as young as 55 in select states only. Higher minimum age requirements may apply. Visit www.reversefunding.com/equity-elite for details.

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• Clients concerned they will outlive their savings • Clients concerned they need to save their money for long-term care • Clients concerned about decreasing their monthly cash flow Close more deals with clients on the fence

The reverse mortgage purchase financing option DOES NOT replace your cash or no-contingency buyers But it can help you attract and capture a brand new and rapidly growing market of homebuyers—those 55 and older *

*Available to borrowers as young as 55 in select states only. Higher minimum age requirements may apply. Visit www.reversefunding.com/equity-elite for details.

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© 2022 Reverse Mortgage Funding LLC. NMLS ID # 1019941. NOT FOR FURTHER DISTRIBUTION.

Your clients can be confident with RMF as their lender • RMF is committed to—and recognized for—providing extraordinary customer service • We provide an experience that’s tailored to each individual • We not only make loans, but after closing we service and maintain a long-term relationship with our customers • We’re one of the nation’s top reverse mortgage lenders • As a direct lender, we have certain pricing advantages—and we pass those savings on to our customers

Source: RMF Customer Satisfaction Survey 2021 Source: LendingTree and Trustpilot Ratings and Reviews, as of May 202 2

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Ready to get started? Contact me today!

EVAN KLAUS Corporate Purchase Program Leader 443-974-3504 [email protected] reversefunding.com

© 2022 Reverse Mortgage Funding LLC. NMLS ID # 1019941. NOT FOR FURTHER DISTRIBUTION.

This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency. Equity Elite Reverse Mortgage (“Equity Elite”) is Reverse Mortgage Funding LLC’s proprietary loan program, and it is not affiliated with the Home Equity Conversion Mortgage (HECM) loan program, which is insured by FHA. Equity Elite is available to qualified borrowers who also may be eligible for FHA’s HECM program or are seeking loan proceeds that are higher than FHA’s HECM program limit. Equity Elite currently is available only for eligible properties in select states. Please contact your loan originator to see if it is currently available in your state. Upon a maturity event, any non-borrowing individuals with an ownership interest in the property, including non-borrowing spouses, will have a short period of time (for example, 30 days from a due and payable letter or an alternate time specified by the loan servicer if extensions are available under the circumstances) to purchase the property from the estate or, if the non-borrower inherits the property, pay the loan in full using any sources of funds available to them. Any non-borrowing individual, including a non-borrowing spouse, should have a plan to pay off an Equity Elite reverse mortgage upon the borrower’s death or any other maturity event. If the non-borrower is unwilling or unable to purchase the property or pay the loan in full, there is no protection for the non-borrower (including a non-borrower spouse) to maintain an interest in the home or to continue residing in the home past the maturity event and the non-borrower may be evicted upon foreclosure. The FHA HECM program has protections in place for certain non-borrowing parties, so a reverse mortgage applicant with certain non-borrowing parties should strongly consider a FHA-insured HECM loan (see HECM guidelines or ask an RMF representative for details). Under the Equity Elite reverse mortgage loan program, a maturity and/or default event occurs when the last surviving borrower no longer lives in the home as his or her primary residence for at least 12 months, the property charges (including taxes, insurance, or any other property charges) are not paid, required repairs are not completed or the property is not maintained, or any other maturity and/or default event, as specified in the Security Instrument, occurs. NOT FOR CONSUMER USE. ©2022 Reverse Mortgage Funding LLC, 1455 Broad Street, 2nd Floor, Bloomfield, NJ 07003, 1-888-494-0882. Company NMLS ID: #1019941. For licensing information, go to: www.nmlsconsumeraccess.org. Arizona Mortgage Banker License #0927682; Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act; Loans made or arranged pursuant to a California Financing Law license; Georgia Mortgage Lender Licensee #36793; Massachusetts Mortgage Lender License #ML1019941; Licensed by the New Jersey Department of Banking & Insurance; Licensed Mortgage Banker-NYS Department of Financial Services -in-state branch address 700 Corporate Blvd, Newburgh, NY 12550; Rhode Island Licensed Lender. For California consumers: For information about our privacy practices, please visit https://www.reversefunding.com/privacy. Not all products and options are available in all states. Terms subject to change without notice. Certain conditions and fees apply. This is not a loan commitment. All loans subject to approval. L4077-Exp102022_v012022