REI Home100 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 conventional 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 Home100 Program.  US Bank serves as the Master Servicer and purchases the loans associated with the Home100 Program.  Interested lenders should contact:

Dena Sherrill, Director of Housing at dsherrill@reiok.org
Jeremy Layman, Housing Manager 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. Central Time daily on the lender portal at www.reihome100.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 the program summary, at the bottom of the page, for more detailed information.

How does DPA work?

The down payment assistance is based on a percentage of the total first mortgage loan amount.  The type of assistance provided depends upon the conventional first mortgage loan type as shown below:

  • Freddie Mac HFA Advantage – amount of assistance is 0%, 3.5%, or 4.0% of the total first mortgage loan amount, determined by the participating lender.  The assistance is provided to the borrower in the form of a gift.
  • Fannie Mae HFA Preferred – amount of assistance is 0%, 3.5%, 4.0%, or 5.0% of the total first mortgage loan amount, determined by the participating lender.  The assistance is provided to the borrower in the form of a 7-year forgivable second mortgage.  The second mortgage loan principal will be forgiven 1/84th each month, beginning with the first full month after closing.  There is no forgiveness for partial months.  The outstanding principal of the second mortgage loan will be due and payable in any of the following instances:
    • The sale, disposition, or transfer of the property
    • The refinancing or payment in full of the first mortgage loan
    • Failure to occupy the property as principal residence for a period of more than sixty (60) days
    • Upon acceleration of the first mortgage loan or second mortgage loan for any reason
  • The assistance 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 assistance 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 assistance 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 $2,500 will be available
  • For Low-Income Purchases (LIP), less than 80% AMI, an additional $1,500 will be available

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

 

What are the underwriting, credit score, and DTI guidelines?

For Fannie Mae HFA Preferred loans, please use the appropriate underwriting guidelines from the matrix below:

 

 

 

 

 

For Freddie Mac HFA Advantage loans, please use the appropriate underwriting guidelines from the matrix below:

 

 

 

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

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

No, there is no first-time home buyer requirement.  Please see the program summary, via the link at the bottom of the page, for more detailed information.

Are there income restrictions?

The borrower’s qualifying income must not exceed Program Income Limits.  Click the link to see conventional income limits.

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.

When borrowers have successfully completed the course, a Certificate of Completion will be available to print.

Register At 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?

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 for 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 assistance?

  • 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.  The outstanding principal of the second mortgage loan will be due and payable in any of the following instances:
    • The sale, disposition, or transfer of the property
    • The refinancing or payment in full of the first mortgage loan
    • Failure to occupy the property as principal residence for a period of more than sixty (60) days
    • Upon acceleration of the first mortgage loan or second mortgage loan for any reason

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

What are the lender compensation, fees, and purchase?

Please review the program summary, via the link at the bottom of the page, for compensation, loan fees, and purchase requirements.

How long does the process take?

Lenders 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 assistance for an investment property?

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