AFG UNDERWRITING GUIDELINES
(subject to change without notice)

The following general underwriting guidelines for AFG loans. 

Valuation procedures: AFG in field personnel conduct on-site due diligence based upon market comparables. The due diligence reporting data is standardized as a part of the administrative side of the AFG website. Underwriting review takes place at several levels beginning with AFG's in field evaluator and a second review by AFG's Sr. loan underwriter.  In the event the company is not able to establish at least 3 similar market comparables the loan will not be considered for funding.

At this time AFG is only accepting collateral located throughout the state of Arizona, and the State of Nevada.

Liquidation valuation: The company considers, as a component of its underwriting procedure, the amount of funds the company can expect to recover at the trustee sale, from each piece of collateral it forecloses upon from non-performing borrowers.

Loan to value ("LTV"): The maximum loan to value the company will fund on any loan request is sixty percent (60%) of the as-is value of the collateral being pledged.

Borrower down payment:  Borrowers will be required to contribute a minimum of Twenty Percent (20%) cash to each transaction. This must be in the form of real cash equity, as opposed to "created" equity, i.e. commission carry back, Seller carry back etc.  Loans exceeding Two Hundred Fifty Thousand Dollars ($250,000) may require the Borrower to contribute a minimum of Thirty Percent (30%) cash, or more to each transaction. This is determined through our underwriting process.

Improvement / Repair Draws: The company may allow Borrowers to access repair or collateral improvement funds as a part of their loan, provided that the total amount of all funds deployed (the initial loan plus any other funds deployed) does not exceed the maximum or determined LTV. The Borrower is required to complete One Hundred Percent (100%) of the property improvements with their funds, and the company reimburses the Borrower only after the company completes an inspection of the improvements and finds them to be completed in an acceptable and workmanlike fashion. Paid in full receipts and other information are also required before advancing a draw. In addition to this, the availability of improvement funds automatically expires One Hundred Twenty (120) days after loan funding.

Borrower Guarantee: AFG requires all Borrowers to issue a personal guarantee for the entire amount of the loan.  If the Borrower is utilizing an entity as the Owner of the collateral, a separate guarantee is required by an individual. If the individual is married, the spouse is also required to sign.

Concentration Limits: The company imposes certain restrictions and limitations upon borrowing activities relating to the number of loans a Borrower is permitted to have with the company at any one time and the amount of loan funds that any single Borrower, or related Borrowers are allowed to have deployed to them at one time. The company will not consider additional lending to any Borrower (or group of related Borrowers) whose total number of loans with the company represents in excess of Five Percent (5%) of the total number of loans in the company's portfolio. The company will not consider additional lending to any Borrower (or group of related Borrowers) who's total amount of deployed loan funds exceeds Eight Percent (8%) of the total outstanding portfolio, and the company requires an increased cash contribution from any Borrower who's total amount of deployed loan funds exceeds Five Percent (5%), on the following schedule:

Percentage of Portfolio                 Maximum LTV
                                                            (additional cash down payment required)

6%                                                     55% (5% additional)
7%                                                     50% (10% additional)
8%                                                     45% (15% additional)

Allowed Collateral Types: The company will accept the following types of real property as collateral for deployed funds:

• Single family residential, detached
• Single family residential, attached
• Town homes, detached
• Town homes, attached
• Condominiums
• Multi family rental properties (under 5 units)

Prohibited Collateral Types: The Company will not accept the following types of real property as collateral for its deployed funds:

• Vacant, un-entitled land
• Vacant, entitled land
• Vacant platted lots
• Vacant custom home lots
• Multi-family rental family over 5 units
• Mobile homes
• Construction loans
• Partially constructed properties

Collateral Quality Control:  The company will not agree to deploy loan funds on any collateral located within an area that has been designated by the company, in its sole and absolute discretion, as a significantly blighted area or located within an area that is considered to be a high crime area, where the likelihood of vandalism to the collateral would be significantly magnified as compared to a more predictable, lower crime area. The company will not agree to deploy loan funds on any collateral which has current or past environmental issues or structural integrity issues.  

FHA Compatibility: It is unlikely that the company will accept any collateral that does not qualify for compatibility under the current FHA take out financing guidelines

The company may accept collateral that is located outside of core metropolitan areas on a case by case basis