Home100 Conventional Loan Program FAQ

For our DPA on conventional loans, we have multiple options in the form of a gift, forgivable 2^nd mortgage, and amortizing 2^nd mortgage.

Freddie Mac HFA Advantage:

• Option 1A – Gift: 3% Down Payment Assistance (1.5% Mortgage Company compensation a/k/a Service Release Premium (SRP))
• Option 1B – Gift: 0%, 3.5%, 4.0%, or 5.0% Down Payment Assistance (2.5% Mortgage Company compensation a/k/a Service Released Premium (SRP)).

Freddie Mac Options 1A & 1B are true gifts with no repayment required or lien on the property. They are based on a percentage of the Total Loan Amount and can be used to fund up to 100% of the Borrower’s cash requirement to close, including the down payment or voluntary down payment, closing costs, pre-paid items and other related Mortgage Loan fees and expenses.

Fannie Mae HFA Preferred:

• Option 1A – Forgivable 2^nd Mortgage: 3% Down Payment Assistance (1.5% Mortgage Company compensation a/k/a Service Release Premium (SRP))
• Option 1B – Forgivable 2^nd Mortgage: 0%, 3.5%, 4.0%, or 5.0% Down Payment Assistance (2.5% Mortgage Company compensation a/k/a Service Released Premium (SRP)).

Fannie Mae Options 1A & 1B are forgivable 2^nd mortgages with 0% interest, forgiven monthly over 7 years. They are based on a percentage of the Total Loan Amount and can be used to fund up to 100% of the Borrower’s cash requirement to close, including the down payment or voluntary down payment, closing costs, pre-paid items and other related Mortgage Loan fees and expenses.

Freddie Mac HFA Advantage AND Fannie Mae HFA Preferred:

• Option 2 – Amortizing 2^nd Mortgage: 5% Down Payment Assistance (2.5% Mortgage Company compensation a/k/a Service Released Premium (SRP)).
  • 0% Fixed Interest Rate on 2^nd Mtg.
  • 10 Year Loan Term

Freddie/Fannie Option 2 is an amortizing 2^nd mortgage. It is based on a percentage of the Total Loan Amount and can be used to fund up to 100% of the Borrower’s cash requirement to close, including the down payment or voluntary down payment, closing costs, pre-paid items and other related Mortgage Loan fees and expenses.

Please see the program summary via the link at the bottom of the page for more detailed information.

• The assistance the borrower receives with the Freddie Mac HFA Advantage loan is a gift and does not have to be repaid.
• The assistance the borrower receives with the Fannie Mae HFA Preferred loan is a 7-year forgivable second mortgage, forgiven 1/84th each month, beginning the first full month after closing.  There is no forgiveness for partial months.
• Please see the program summary, via the link at the bottom of the page, for more detailed information.

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

• Fannie Mae HFA Preferred up to 97% LTV
• Freddie Mac HFA Advantage up to 97% LTV

REI is not QM Exempt  – All loans must be QM loans based on New QM Rule.

• REI will wire all gift and forgivable 2^nd Mortgage funds to the title company prior to closing upon approval of the Funding Request Stage in the Lender Portal
• The Lender will fund the amortizing 2^nd mortgage funds prior to closing upon approval of the Funding Request State in the Lender Portal and service the 2^nd mortgage until US Bank purchases the 1^st and 2^nd Mortgage from the lender.

The borrower’s qualifying income must not exceed Program Income Limits. Click the links at the bottom of the page to see the income limits.

Lenders will be responsible for ensuring that the income meets program guidelines.

•  1 ‐2 Units
• Condos and Townhomes – Condos must be approved by US Bank Home Mortgage HFA Division
• Manufactured Housing is permitted (multi-section only)

Refer to the US Bank HFA Lending Guide 800: Condominium Project Review Sections 810 and 811 for all U.S. Bank condo requirements.

For properties located in a flood zone requiring flood insurance, the outstanding 2nd mortgage lien must be included in
the flood insurance coverage calculations.

For manufactured housing, all agency guidelines for the applicable loan product must be followed.

• 1‐ 2 Units primary residence
• Condos & Townhomes approved by US Bank Home Mortgage’s HFA Division
• Manufactured Housing is permitted (multi-section only)

Refer to the US Bank HFA Lending Guide 800: Condominium Project Review for all U.S. Bank condo requirements.

All agency guidelines for the applicable loan product must be followed.

• 3% maximum for CLTV greater than 90%
• 6% maximum for CLTV less than or equal to 90%.

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

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
• Freddie Mac’s CreditSmart HomebuyerU
• 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.

Fannie Mae HFA Preferred

DU finding of approve/eligible and meet all other guidelines listed in this Program Summary. (HFA Preferred is available through DU using the “Additional Data Screen – then select HFA Preferred.)

MANUAL UNDERWRITING GUIDELINES  – Loans may be manually underwritten for erroneous, inaccurate, or insufficient credit.   

• For Fannie Mae HFA Preferred if one or more borrowers have no credit score, lenders must follow Fannie guide chapters B5-6-03 and B3-5.4-01, B3-5.4-02, and B3-5.4-03 for manual underwriting with non-traditional credit.
• If the HFA, GSE, or MI require more in reserves as listed in LTV / DTI / FICO tables below; the greater number of months must be documented.

Freddie Mac HFA Advantage

LP finding of Accept/Eligible and meet all other guidelines listed in this Program Summary. (Offering Identifier: HFA Advantage (LPA v5.0.06 or higher Home Possible Advantage for HFA’s (LPA Legacy) or Using the code 251.)

MANUAL UNDERWRITING GUIDELINES – Loans may be manually underwritten for erroneous, inaccurate, or insufficient credit.

• For Freddie Mac HFA Advantage at least one borrower must have a usable credit score, meet the minimum FICO score requirements, and adhere to Freddie Mac guidelines for HFA Advantage.
• If the HFA, GSE, or MI require more in reserves as listed in LTV / DTI / FICO tables below; the greater number of months must be documented.

• Arch
• Essent
• Enact
• MGIC
• National MI
• Radian

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

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