An improved heat exchange system comprising a housing (66) having an upper portion (22), a middle portion (23), and a lower portion (24), a heat exchange conduit (25) transmitting a fluid from a fluid input (26) to a fluid output (27) through the upper zone, the transitional zone and the lower zone, a burner (28) configured and arranged to produce combustion flue gases that can flow through at least a portion of the upper zone, the transitional zone and the lower zone, a baffle (30) disposed in the lower portion of the housing, and a gas flow diverter (40) disposed above the baffle and at least partially in the transitional zone. The gas flow diverter is configured and arranged to divert the flue gas into multiple flow paths.