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• Chenoa Fund DPA for FHA Loans

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.

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.

How does the borrower qualify for Chenoa Fund™ DPA for FHA Loans?

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.

• Chenoa Fund DPA for FNMA Conventional Programs

90–97% LTV FNMA Conventional Mortgage Financing

Through the Chenoa Fund program, CBC Mortgage Agency offers two DPA products that get paired with FNMA first mortgages, the Conventional Standard 90–97% LTV and the Fannie Mae HomeReady^®1. Chenoa Fund down payment assistance for FNMA conventional first mortgages is compliant with Fannie Mae requirements.

Overview. CBC Mortgage Agency provides a second mortgage in an amount of 3% that may be applied toward the borrower’s minimum required investment (down payment), closing costs, prepaid items, or any combination of the three for borrowers that qualify for a 90–97% LTV conventional loan. Borrowers receiving this assistance must meet the guidelines outlined for the Conventional Standard 90–97% LTV loans*.

As a lender, in order to offer these conventional products, you must have the ability to run DU^®2.

 

To qualify for Chenoa Fund down payment assistance for conventional loans, the borrower must meet product criteria, including the following:

• Average middle FICO 620 or higher
• Debt-to-income ratio maximum based on credit score

 

Additional features³ for the conventional standard 90–97% LTV program:

• At least one of the borrowers must be a first-time home owner
• No Chenoa Fund™ income limit overlays under the conventional standard 90–97% LTV program

 

Additional features for Fannie Mae’s HomeReady^®4 program:

• Home must be located in a low-income census tract, otherwise borrowers must not exceed 100% of area median income (AMI) per FNMA guidelines
• One of the loan applicants must complete the homeowner education course

 

90–97% LTV Standard Conventional Program Details: Here is a snapshot of borrower requirements and Chenoa Fund program overlay criteria:

• No borrower investment required
• Single family only
• No income limits
• Purchase only
• All borrowers must have an average middle FICO score of 620 or higher
• 30-year Fixed Rate Mortgage
• Second lien is a 10-year fixed rate mortgage with an interest rate 2% higher the first mortgage
• MI Coverage 35%
• DU^® Only, 90–97% LTV
• Concurrent homeownership not allowed; at least one borrower must be first-time homebuyer
• No homebuyer education class required

Visit the Chenoa Fund Correspondent Lending Guide for details..

Go to the Fannie Mae Selling Guide.

 

Fannie Mae HomeReady^® Program Details: Here is a snapshot of borrower requirements and Chenoa Fund program overlay criteria:

• No borrower investment required
• Single family only
• No income limits in low-income census tracts
• AMI per FNMA guidelines in all other census tracts
• Purchase only
• All borrowers must have an average middle FICO score of 620 or higher
• 30-year fixed rate mortgage
• Second lien is a 10-year fixed rate mortgage with an interest rate 2% higher than the first mortgage
• DU^® Only, 90–97% LTV
• Concurrent homeownership not allowed
• Requires borrower to take homebuyer education class

Visit the Chenoa Fund Correspondent Lending Guide for details.

Go the Fannie Mae Selling Guide.

 

*Neither CBC Mortgage Agency nor the Chenoa Fund program are approved by or affiliated with Fannie Mae. It is the originating lender’s responsibility to ensure that the combination of the Chenoa Fund second mortgage and the FNMA first mortgage are compliant with Fannie Mae requirements.

¹HomeReady^® is a registered trademark of Fannie Mae.

²DU^® is a registered trademark of Fannie Mae.

³CBCMA’s correspondent guidelines include additional overlays to the HomeReady^® program.

⁴CBCMA’s correspondent guidelines include additional overlays to the HomeReady^® program

5.772% APR for the second mortgage, assuming an interest rate on the first mortgage of 3.75% and assuming that all other program requirements are met.