Non-QM Bank Statement Program for Self-Employed Borrowers

Sequoia Sequoia Non Non- -QM QM Bank Statement Program

Sequoia Non-QM 12 and 24 Month Bank Statement PERSONAL OR BUSINESS BANK ACCOUNTS MINIMAL DOCUMENTATION 2 YEARS SELF EMPLOYED 2 YEARS SAME LINE OF BUSINESS NEWFI PERFORMS INCOME ANALYSIS FAST CLOSE 2 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21

Designed for Self Employed Borrowers Sequoia Sequoia Non Non- -QM QM 2 years history of Business Personal or Business Bank Accounts 50% + Income from Self Employed Additional Income sources allowed REO | SSI | W2 Income from Spouse Newfi provides Bank Statement Analysis Monthly Income Calculation 12 and 24 Month 12 and 24 Month Personal and Business Personal and Business Bank Statement Bank Statement 3 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21

Personal Bank Statements 2 Months Business Bank Statements Must evidence activity to support business operations Must reflect transfers into personal account 20% ownership of the Business ATM deposits with consistent patterns included Income is calculated using total deposits, less non-business related deposits and SSI, Pension, W2 Income Qualifying Income is based upon the lower of total eligible deposits divided by 12 or 24 months or Income listed on 1003 Sequoia Sequoia Non Non- -QM QM 12 and 24 Month 12 and 24 Month Personal Bank Statement Personal Bank Statement Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21 4

Business Accounts or Co-Mingled Accounts 50% ownership of Business ATM deposits with consistent patterns included Income is calculated using total deposits, less non-business related deposits and SSI, Pension, W2 Income Qualifying Income is based upon the lower of total eligible deposits divided by 12 or 24 months or Income listed on 1003 Sequoia Sequoia Non Non- -QM 12 and 24 Month 12 and 24 Month Business Bank Statement Business Bank Statement QM Three Methods to calculate Expense Ratio 5 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21

Method 1 Method 2 Method 3 50% FER Expense Statement Profit & Loss Fixed Expense Ratio There are three methods to calculate Business Bank Statement 6 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21

Business or Commingled Bank Account Work from home or shared facility, 1 or more but no more than 10 employees Available for professional services Doctors | Attorney | Entertainment | Small to Medium size business Method 1 50% Fixed Expense Ratio Business narrative that includes details regarding the industry, size and operating profile of the business, addressing location(s), rent, number of employees or contractors, COGS, and physical assets The business narrative should be completed by one of the following: Business Owner Controller, Treasurer, VP Finance, Accounting Manager Third-Party individual such as Tax Professional, CPA or an IRS Enrolled Agent Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21 7

Business or Co-Mingled Bank Account Businesses within an industry that experiences higher expense ratios Available for professional services: Construction | Manufacturing | Retail or Wholesale Trade | Hospitality Food and Beverage | Transportation Business narrative that includes details regarding the industry, size and operating profile of the business, addressing location(s), rent, number of employees or contractors, COGS, and physical assets Method 2 Expense Statement Business Expense Statement Letter states the preparer has reviewed the borrower tax returns, profit and loss, balance sheet and determines the expense ratio, length and ownership of business Minimum expense ratio of 10% of gross revenue Business Narrative and Expense Statement Ratio Letter prepared by: CPA Certified Tax Preparer Types of documentation for proof of preparer s business: State License CPA License 8 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21

Business or Co-Mingled Bank Account CPA, IRS Enrolled Agent or Licensed Tax Preparer Only Bank Statement and Profit and Loss must match the same time period Method 3 Method 3 Profit and Loss Third Party Prepared Profit & Loss Revenue must be supported by Bank Statements Total deposits on bank statements, less inconsistent deposits must be greater than or no more than 10% below the revenue reflected on the Profit & Loss Income is the lower of Profit and Loss Net Income divided by number of statements or total deposits reported on the bank statements less inconsistent deposits divided by number of statements or income on 1003 For 24 month option, the average total deposits from the most recent 12 months time period must be consistent with the total deposits from months 13-24. If declining income, business narrative needs to support stable income definition for loan program. Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21 9

Maximum Loan Amount: $3,000,000 Maximum DTI: 50% Maximum LTV: 90% Purchase and Rate & Term Interest Only: 10 YR IO on 30 and 40 Year Fixed Sequoia Sequoia Non Non- -QM Bank Statement Bank Statement Program Highlights Program Highlights Maximum Cash Out: $1M on Owner Occupied, 2nd Home and Non-Owner QM Minimum FICO: 660 Transferred Appraisals 2-4 Seasoning on all major credit events Non-Warrantable Condos Forbearance 10 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21

Sequoia Sequoia Non Non- -QM LTV Highlights LTV Highlights QM 11 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21

Approved Exceptions Loan Amount Number of open and active tradelines Acreage Cash-Out FICO Scores Reserves Number of properties owned DTI LTV/CLTV NSF Sequoia Sequoia Non Non- -QM Bank Statement Exceptions QM 12 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21

Compensating Factors Sequoia Sequoia Non Non- -QM Bank Statement Compensating Factors FICO Scores Reserves DTI LTV/CLTV Mortgage History Seasoned Business QM Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21 13

How to you submit your Bank Statements for income analysis? Email bank statements to your AE! Sequoia Sequoia Non Non- -QM Bank Statement Income Calculation QM Personal Bank Statement Program: 12 or 24 Months Personal bank Statements Plus 2 months business Bank statements Business or Commingled Program: 12 or 24 months Business or Personal bank statements Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21 14

Sequoia Sequoia Non Non- -QM Bank Statement Income Analysis QM Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21 15

Sequoia Sequoia Non Non- -QM Business Narrative QM Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21 16

To Qualify for the Parks & Rec Club Fund 3 or more Sequoia Non-QM Loans per Month Membership Perks .375 Price Improvement Sequoia Loan Programs Full Doc, Bank Statement, 1099 and DSCR Guaranteed 30 Day Close Purchase transactions with adherence to submission date Direct Access to our Designated Non-QM Experts Assist with Structuring and Submitting Non-QM Sequoia Loans Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.1.21

Kevin McCarthy Kevin McCarthy Deal Desk Specialist Deal Desk Specialist kevin@newfi.com kevin@newfi.com 510.607.8531 510.607.8531 Dan Bayer Dan Bayer SVP Development & Strategy SVP Development & Strategy dan@newfi.com dan@newfi.com 925.584.0579 925.584.0579 Thank You! 3.27.21 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.1.21

Jane Miller owns an interior design company with two employees. She rents a shared office. Jane s business expenses are low, because she does not carry inventory and only has two employees. Jane would qualify for the 50% Fixed Expense Ratio. Jane would not need the Expense Ratio Letter or a P&L. The total eligible deposits from the bank statements would be multiplied by the percentage of Jane s ownership and a 50% Fixed Expense Ratio factor. Eligible deposits X 100% ownership X 50% Fixed Expense Ratio = Yearly Income based on 12 or 24 months bank statements Example 1 OR Income listed on 1003, whichever is lower 19 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21

Robert Sutton owns a small caf with 11 employees and rents the retail space. Since Robert must carry inventory, 11 employees, and rent on the caf location, Robert would not qualify for the 50% FER due to the nature of his busines being food and beverage. Robert would be required to obtain an Expense Letter or Profit and Loss statement. Example 2 Income would be determined by the following: Expense Letter; Eligible deposits X % of Ownership of business X Expense Factor or Income stated on 1003 whichever is lower OR Profit and Loss; Gross deposits need to be within 10% of gross revenues on P&L. Net Income on P&L for DTI calculation or Income stated on 1003 whichever is lower 20 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21

Jack Taylor owns a barber shop with 7 independent contactors. Jack rents the retail space. Jack would qualify for the 50% Fixed Expense Ratio. The independent contractors rent chairs from Jack they are not his employees on his payroll. Jack s product inventory is very small as he only has a few hair products. Example 3 Income used for DTI calculation would be eligible deposits X percentage of ownership X 50% FER or income stated on 1003 whichever is lower 21 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21

Mark Tyler is a graphic designer with no employees and works out of his home. With very few expenses, Mark would qualify to use a lower expense ratio letter prepared by his accountant or by a third party individual with direct knowledge of Mark s business. Example 4 Income would be calculated by taking eligible deposits X percentage of ownership X expense factor or income listed on 1003, whichever is lower 22 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21

Barbara Smith owns an IT consulting business with one employee. They work out of their homes. If the 50% Fixed Expense Ratio is too high for Barbara to qualify, then she would qualify for a lower expense ratio. Jane would have her Accountant, CPA or IRS Enrolled Agent prepare the expense statement. The income would then be calculated using the expense ratio stated on the letter. Example 5 Eligible deposits X percentage of ownership X expense factor OR income stated on 1003, whichever is lower 23 Newfi Wholesale - Confidential & Proprietary Information - Not intended for consumer distribution. V.3.8.21