Homebuyer FAQ

How does DPA work?

The assistance is provided in three forms: a gift that does not have to be repaid, a 2nd mortgage loan which will be paid back monthly over ten years, or a forgivable 2nd mortgage which does not have to be repaid if you live in the home for seven years. The amount of down payment assistance received is based on a percentage of the total first mortgage loan amount. We can provide up to 5% assistance depending on the first mortgage loan product recommended by your lender.

Your lender can help determine which option is best for you.

See below for example:

Loan Type is: FHA (Government Product)
DPA Type is: Gift
Loan Type is: Fannie Mae HFA Preferred (Conventional Product)
DPA Type is: Forgivable 2nd Mortgage
Loan Type is: Freddie Mac HFA Advantage (Conventional Product)
DPA Type is: Amortizing 2nd Mortgage
Loan Amount is: $100,000Loan Amount is: $100,000Loan Amount is: $100,000
5% Assistance: $5,000 Gift5% Assistance: $5,000 Forgivable 2nd Mortgage5% Assistance: $5,000 Amortizing 2nd Mortgage
No repayment or liens for the $5,0002nd mortgage forgiven 1/84th a month over 7 years - no payments unless you sell or refinance within the 7 years.2nd mortgage paid back monthly over 10 years at an interest rate of 5%

What type of loan programs are offered with the assistance?

We can provide down payment and closing costs assistance on most first mortgage products offered by your lender, including government loans and conventional loans.  Your lender will determine which one is best for you.

  • FHA
  • VA
  • HUD-184
  • Rural Development
  • Fannie Mae HFA Preferred
  • Freddie Mac HFA Advantage

All loans are 30-year, fixed rate mortgages.

Do I have to pay back any portion of the down payment assistance?

REI has three different types of assistance. See below for details regarding each type of assistance.

Gift – the borrower receives a gift where no funds are required to be paid back and no liens are filed against the property.

Forgivable 2nd Mortgage – borrower receives assistance from REI and a forgivable 2nd mortgage is filed as a lien against your property.  The 2nd mortgage is forgiven 1/84th a month and totally forgiven if the borrower lives in the home for 7 years.  This must be repaid upon sell or refinance or payment in full of the property, or failure to occupy the property as personal residence for more than 60 days if within the 7 year period.

Amortizing 2nd Mortgage – borrower receives assistance from REI and an amortizing 2nd mortgage is filed as a lien against your property. The 2nd Mortgage has an interest rate of 5% and will paid off monthly over 10 years.

Your lender will help you determine which first mortgage loan product is best for you.

How do I apply for the assistance?

Take a look at the How it Works page and contact one of our Approved Lenders.

How do I find a lender?

Click here to access our lender list.  You may use the REI Home100 approved lender of your choice. If you are using a lender that is not familiar with the program or is not approved, please have them contact one of the members of our housing staff at 800-658-2823 or reidpa@reiok.org.

Am I required to stay in the home for any minimum number of years?

That depends on the first mortgage loan product your lender determines is in your best interest.  Our gift funds are not tied to a minimum number of years.  Our 2nd mortgage funds are forgiven 1/84th a month for a total of 7 years.  If you sell or refinance within 7 years, you will be required to pay back the pro-rata share based on how long you have lived in the home.

Are there income restrictions?

The income limits for the REI Down Payment Assistance (DPA) program depends on the DPA and loan type you are receiving. A lender can determine what loan and DPA type is best for you.  Click the links below to view the income limits for the different programs available.

FHA & VA Qualifying Income Limits, FHA Household Income Limits, USDA Rural Development Income Limits, Conventional Income Limits At or Below 80% Area Median Income, Conventional Income Limits Above 80% Area Median Income.

What are the first mortgage interest rates?

The interest rates for the REI Home100 Program are set daily.  For more information about interest rates on a specific day, please contact a participating mortgage lender by visiting our Approved Lender page.

Please note that as a result of the assistance, the interest rate on the first mortgage loan could be slightly higher than a first mortgage loan that does not include the assistance.


Do I have to be a first-time homebuyer?

No, there is no first-time homebuyer requirement.

What is the minimum credit score?

All borrowers MUST have a minimum representative Credit Score of 640 with a maximum DTI of 45%. With a credit score of 680 or above, borrowers can have a maximum DTI of 50%.

How long does the process take?

Lenders should be able to close a loan with the REI Home100 Program in the same amount of time it takes to close a traditional mortgage loan.

Can the Seller help me pay closing costs?

Yes, the seller can contribute the maximum amount allowed by the first mortgage loan product utilized.

What is DTI?

DTI stands for debt-to-income ratio, also referred to as back-end ratio.  It shows how much of your gross monthly income is needed to cover all your debt obligations.  Follow these steps to determine your approximate DTI:

    1. Add up all of your monthly debt payments (including your mortgage, car loans, child support and alimony, credit cards, student loans, etc.)
    2. Divide this amount by your gross monthly income.
    3. Then multiply this amount by 100. This percentage is your DTI.

Please keep in mind that you must meet specific underwriting standards.  The participating mortgage lender can help you better understand FICO credit score and DTI.

Does the borrower have to take a homebuyer education class?

Government Loan Products:  Homebuyer education is recommended but not required.

Conventional Loan Products: Required if all borrowers are first-time homebuyers, at least one borrower must complete pre-purchase homebuyer education and counseling.  The following courses listed are acceptable:

  • REI Homebuyer Education through EHome America, please click on the following link to take the online course. The cost is $99.00.
  • Fannie Mae’s HomeView Homeownership Course
  • Freddie Mac’s CreditSmart Homebuyer U
  • HUD approved counseling agency
  • Homeownership education programs developed by mortgage insurance companies or other providers’ programs that meet the standards for Homeownership Education and Counseling set by HUD or the National Industry Standards for Homeownership Education and Counseling

Lender must retain a copy of the certificate of course or counseling completion in the loan file.

What is the difference between closing costs and required down payment?

Closing costs are fees associated with the cost of obtaining a home loan. These fees include items such as the appraisal, lender origination fees, escrow charges, lender’s title insurance and prepaid taxes and insurance premiums.

The down payment for a home is applied directly toward lowering your total loan amount.  Normally based on a percentage of the total sales price, the amount is established by the first mortgage loan product that the lender has chosen for your loan.

Can I receive assistance for investment property or a second home?

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