Rate Advantage Product - Homebuyers

Chenoa Fund™ is a national down payment assistance program administered by CBC Mortgage Agency, a federally chartered governmental entity. Through the Chenoa Fund™ program, CBC Mortgage Agency specializes in providing down payment assistance (DPA) for low- to moderate-income borrowers.

Chenoa Fund™ DPA for FHA loans is a flexible second mortgage used to provide down payment assistance. This product is has both forgivable and repayable loan options.

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Everyone in America DESERVES access
 to affordable housing

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What does Chenoa Fund™ DPA for FHA Loans offer?

Using the Chenoa Fund™ DPA for FHA loans product, the borrower may receive either 3.5% or 5% down payment assistance on an FHA loan. This assistance may be applied to the down payment, closing costs, prepaid items, or any combination of the three. This assistances may be in the form of a repayable loan with a 10-year term or a forgivable loan with a 30-year term.

What does Chenoa Fund™ DPA for FHA Loans offer?

In order to qualify for Chenoa Fund™ DPA for FHA loans, the borrower must qualify for an FHA loan and meet Chenoa Fund’s minimal product overlays, which include a minimum credit score of 600.

With this product, the borrower may be able to lock the first mortgage at market comparable rate. In addition, while the DTI limit is only limited by AUS approval, better pricing is available for lower DTI scores and for borrowers below a 135% AMI limit.

Why was Chenoa Fund™ DPA for FHA Loans created?

While many people do manage to purchase a home by saving for a down payment over a period of years, increasing home prices and stagnant or low wages can make this quite difficult. By helping responsible homebuyers to overcome the challenge of the minimum investment required for a mortgage, CBC Mortgage Agency is helping to create healthy communities by improving the balance between homeownership and other types of housing. This way, new homeowners can start now building equity for their future, rather than potentially waiting for years to save up for a down payment while home prices become even more unaffordable.

CBC Mortgage Agency does not originate mortgage loans. This is not an offer to lend money nor a solicitation of a mortgage application by CBC Mortgage Agency.

Homeownership isn’t for everyone
but HOUSING is

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Frequently Asked Questions

What is the second lien on the property?

The lien is for the down payment assistance, which is referred to as the second mortgage. This second mortgage has a 30-year term at a 0% interest rate (0% APR) and has no monthly payments.

What is meant by “the loan is forgiven”?

A loan that is “forgiven” goes away and never needs to be repaid.

For example, let’s assume the borrower receives $10,000 for down payment assistance through the DPA Edge Soft Second product. After the borrower meets the forgiveness terms, the borrower may provide evidence of his or her on-time payments on the first mortgage in the form of a payment history. Once confirmed by CBC Mortgage Agency, the $10,000 loan is forgiven entirely—the borrower will never have to pay it back.

For 3.5% assistance, the loan is forgivable after the borrower makes 36 consecutive, on-time payments on the FHA first mortgage. If the borrower ever makes a payment that’s 30 days late (or more), the forgiveness period resets.

For 5% assistance, the loan is forgivable after the borrower makes the initial 120 consecutive, on-time payments on the FHA first mortgage. If the borrower ever makes a payment that’s 60 days late (or more), the forgivable status of the loan is terminated. (In that instance, the loan will still have a 0% interest rate, 0% APR, and require no monthly payments.) However, the loan may still be forgiven at the end of the 30-year term, even if any payments were 60 days (or more) late.

How can my borrower get the loan forgiven?

The borrower will need to provide a payment history to CBC Mortgage Agency’s servicing team after meeting the forgiveness conditions. Our servicing team can be reached at servicing@chenoafund.org.

What happens if the borrower refinances the first mortgage or sells the home before the forgiveness terms are met?

Let’s continue the example outlined above. If the borrower received $10,000 for a down payment and then refinance the first mortgage before meeting the forgiveness terms, the borrower would be required to pay the $10,000 back in full. The same would apply if the borrower sold the home.