REI Gift100 Conventional Loan Program FAQ

Down Payment Assistance for Your Borrower

What types of loan programs are available?

We offer a 30 year fixed rate loan with down payment assistance on the following loan products:

  • Fannie Mae HFA Preferred up to 97% LTV
  • Freddie Mac HFA Advantage up to 97% LTV
  • Rate/term refinance on any of the above loan products.

How do I become a lender?

Lenders must be approved by U.S. Bank HFA Division to participate in the REI Gift100 Program.  US Bank serves as the Master Servicer and purchases the loans associated with the Gift100 Program.  Interested lenders should contact:

Dena Sherrill, Housing Program Manager at dsherrill@reiok.org
Jeremy Layman, Housing Program Specialist at jlayman@reiok.org

***Third Party Origination is not allowed***

What are the first mortgage interest rates?

REI Down Payment Assistance will post First Mortgage interest rates by 9:00 a.m. C.S.T. daily on the Lender Portal at www.reigift100.org.  All loans must be delivered and purchased by U.S. Bank within 60 days of rate lock.  An extension can be purchased if needed. Please see Program Summary for details.

How does DPA work?

The down payment assistance is in the form of a gift and is based on a percentage of the total first mortgage loan amount.

  • Amount of assistance is 3.5% or 5.0% of total first mortgage loan amount (determined by the lender).
  • The funds may be used to fund up to 100% of the Borrower’s cash requirement to close, including the down payment, closing costs, pre-paid items, single or split MI fees and other related Mortgage Loan fees and expenses. No portion of the gift funds can be paid to the Borrower unless the Borrower is being reimbursed for his/her earnest money deposit and pre-paid expenses to the extent the minimum Borrower contribution has been satisfied.  Under the rate/term refinance option, any funds above the amount needed to pay the Borrower’s loan related costs must be used to reduce the principal amount of the First Mortgage loan.
  • REI will table fund the Gift Funds at closing

Additional Down Payment Assistance Subsidy allowed for Freddie Mac Loans as follows:

  • For Very Low-Income Purchases (VLIP), less than 50% AMI, an additional 200 basis points (2%) will be available
  • For Low-Income Purchases (LIP), less than 80% AMI, an additional 50 basis points (.5%) will be available

See program summary and income guidelines for subsidy for more detailed information.

 

What is the minimum credit score?

All borrowers MUST have a minimum representative Credit Score of 640 when using an automated underwriting system.  See Program Summary for manual underwriting guidelines and alternative credit requirements.

What is the Debt to Income (DTI) Ratio?

  • Determined by First Mortgage Program not to exceed 50% when underwritten through AUS (DU or LP).
  • Manual Underwrite/Alternative Credit Score for AUS refer or No Fico maximum 36% with minimum 2 months PITI reserves after closing. Refer to Program Summary for more details.

What are the underwriting guidelines?

Fannie Mae HFA Preferred and Freddie Mac HFA Advantage have slightly different underwriting guidelines. Please see the Program Summary for detailed information.

Does the borrower have to be a first-time homebuyer?

No, there is no first-time home buyer requirement.  See Program Summary for more detailed borrower eligibility guidelines per program.

Are there income restrictions?

The borrower’s qualifying income must not exceed Program Income Limits.  Click this link to see Income Limits or Income Limits for Additional Subsidy.
Lenders will be responsible for ensuring that the income meets program guidelines.

Does the borrower have to take a home buyer education class?

Required if all borrowers are first-time home buyers, at least one borrower must complete pre-purchase home buyer education and counseling.  The online course listed below is an acceptable course as is an on-line MI company, and/or an OHEA Certified or HUD certified counselors.

REI has been approved to provide Homebuyer Education through EHome America, please click on the following link to take the online course. The cost is $99.00.

www.ehomeamerica.org/reiok

Which Mortgage Insurance (MI) companies participate in the program?

  • Arch
  • Essent
  • Genworth
  • MGIC
  • National MI
  • Radian

What is the MI Coverage?

18% for LTVs >95% and < = 97%
16% for LTVs >90% and <= 95%
12% for LTVs >85% and <=90%
6% for LTVs >80% and <= 85%

What are the MI Payment Options?

  • Borrower Paid – monthly with annual renewal
  • Split Premium
  • Single Premium

****Base loan plus financed MI cannot exceed 97% LTV.****

Are Seller concessions allowed?

  • 3% Maximum for CLTV Greater than 90%
  • 6% maximum of CLTV less than or equal to 90%.

May be used for closing costs and/or single or split MI premiums

Does the borrower have to pay back the gift?

No, the borrower is not required to pay back the gift upon sale or refinance, it is a true gift to the borrower.

What are the lender compensation, fees, and purchase?

Please review the Program Summary for compensation, loan fees, and purchase requirements.

How long does the process take?

Lender’s should be able to close a loan in the same amount of time it takes to close a traditional mortgage loan.

Can the borrower receive a gift for investment property?

No, the borrower must utilize the gift on their primary residence.