22-11-07 Announcement – November 7, 2022 Program Guidelines Update

All policy changes and updates are referenced below to the appropriate section of the CLG. These policy changes are effective 11/07/2022 unless otherwise noted.

To review the program guidelines changes made March 3, 2022, or earlier, please follow this link to the archived Correspondent Lending Guides. (You are also able to review the DPA Edge and Rate Advantage products guidelines from the archived March 3, 2022 guidelines.)

This announcement, and previous announcements, are also available on the Announcements page of our website.

These updates apply to everyone using the Chenoa Fund program—correspondents and TPO.

Announcements—Product Updates

Payment Shock:  Payment shock overlays are determined by the lower middle fico scores for qualifying borrowers.  Rental payments can be combined for payment shock if borrowers have been living in separate residences.

Manufactured Housing:

6.2.5 Ineligible Features 

* Added single wide units

Bonafide and Non-bonafide fees:

  • Bona-fide discount points exist when your company publishes a rate sheet that has, after application of all LLPAs, a par rate or that pays a premium.  If a borrower selects a lower rate than that ‘par or better’ rate, then the discount point charged to get that lower rate would be a bona-fide discount point.  CBCMA allows discount points per CFBP guidelines.
  • Non-bonafide discount points exist when no ‘par or better’ rate exists on your company’s published rate sheet.  If the highest rate available results in a fee to the borrower, this fee is a non-bona-fide discount point.  CBCMA allows non-bona-fide discount points, but they must be counted towards the maximum 3% points and fees rule.
  • Non-bonafide discount points paid by a seller using a seller concession must be considered in the 3% points and fees calculation.
  • Non-bonafide discount points can be paid by a seller as part of ‘seller paid items’ and not have them count against the 3% points and fees rule by following the guidance in the Buckley-Sandler memo that is published on the chenoafund.org site.

All FHA: Allowed. Loans submitted with Refer/Eligible AUS findings and that have been manually underwritten according to FHA guidelines are acceptable with the exception of manufactured home properties, provided that CBC Mortgage Agency overlays are also adhered to.  Follow eligibility requirements for manually underwritten loans according to FHA, and then apply CBC Mortgage Agency overlays for complete adherence to our program requirements.

The above changes affect the following sections:

5.12 | Payment Shock Requirements 

6.2.5 |  Ineligible Features 

* Added Single wide units

7.7 | Added Bonafide and Non-Bonafide Fees 

5.25 | Manual Underwriting