Closing Cost Assistance for Government Loans

The REI Market Rate Program provides the homebuyer with the closing costs associated with an FHA, HUD 184, and Rural Development Loan. Many times, people have the funds to make the required down payment for their home loan, but not enough for the closing costs and the Seller is only willing to help with a portion of the closing costs or not at all.

Eligible closing costs for this program include title fees, pre-paid costs, escrows, lender fees, and up front mortgage insurance or guarantee fees.

Please review the Program Summary for more detailed information, below are some highlights of the program.

Eligible Lenders: Lenders must be approved as a Mortgage Clearing Corporation (MCC) Correspondent Lender and in good standing. MCC requires that lenders must meet the FHA net worth requirements and be FHA approved to be eligible for MCC Correspondent Lender status. Lenders should contact Chris Jones, MCC at (918)749-2274 or chrisjones@mortgageclearing.com to inquire about becoming a participating lender. If you don't meet these requirements, please contact Dena Sherrill at <a href="mailto:dsherrill@reiok.org">dsherrill@reiok.org</a> or Jeremy Layman <a href="mailto:jlayman@reiok.org">jlayman@reiok.org</a>.

Program Highlights:

Structure: This is a first and second mortgage program that are packaged together. The first mortgage loan is a 30 year fixed rate government loan and the second mortgage is utilized to pay the closing costs associated with closing of the first mortgage loan.

Second Mortgage: The second mortgage is sized a 3% of the total first mortgage loan amount. The second mortgage is a 20 year fixed rate mortgage with an interest rate of 7.375%. There is no pre-payment penalties on the second mortgage. Second loan proceeds may be used to cover any gap between the FHA-insured first mortgage and the amount necessary to acquire the property, including closing costs, prepaid expenses, and payment of upfront mortgage insurance premiums and/or guarantee fees. Borrower may be reimbursed for their earnest money and prepaid expenses.

Interest Rates: Interest rates are distributed by email daily by MCC.

Income Limits: Income limits apply based on household <a href="http://reidownpayment.org/wp/wp-content/uploads/2013/09/Income-Worksheet.xls">Income Worksheet</a> (link to income limits for FHA &amp; HUD 184). Rural Development standard income limits apply.

Credit Score: Minimum credit score of 640

CLTV: Cannot exceed 105%

DTI: Cannot exceed 45%

First-Time Homebuyer: No first-time homebuyer requirement.

Lender Compensation, Fees, and Purchase: Please review the Program Summary for lender compensation, fees, and purchase information.

Loan Funding: Lender will fund the First Mortgage. The second mortgage will be table funded by REI.

For Example: Borrower is purchasing a home for a total first mortgage loan amount of $100,000. The second mortgage will be 3% of the total loan amount for a total of $3,000 to be used to pay the borrowers closing costs. See chart below: Still working on charts.

Jeremy will send below information in separate email:

Detailed Information for Lenders:
Program Summary

Forms:
<a href="http://reidownpayment.org/wp/wp-content/uploads/2013/09/Loan-Registration-Form-1.xls">Loan Registration Form</a>
<a href="http://reidownpayment.org/wp/wp-content/uploads/2013/09/MORTGAGORS-AGREEMENT-DISCLOSURE-FORM.pdf">Mortgagors Agreement &amp; Disclosure Form</a>
<a href="http://reidownpayment.org/wp/wp-content/uploads/2013/09/Income-Worksheet.xls">REI Down Payment Assistance Income Verification Form</a>
<a href="http://reidownpayment.org/wp/wp-content/uploads/2013/09/SECOND-LIEN-RIDER.pdf">Second Lien Rider</a>
<a href="http://reidownpayment.org/wp/wp-content/uploads/2013/09/Wire-Request-Form.xlsx">REI Down Payment Assistance Wire Request Form</a>