Home » Lender » Program and Products

• DPA Edge Repayable Second

The DPA Edge Repayable Second product is a forgivable second mortgage that gets paired with an FHA-insured first mortgage. CBC Mortgage Agency, through Chenoa Fund, lends 3.5% to cover the borrower’s down payment; this assistance may be applied toward the minimum required investment (down payment), closing costs, or prepaid items, or any combination of the three.

The Repayable Second product has a term of either 10 years (with a 0% interest rate, 0% APR) or 30 years (with a 5% interest rate, 5.009% APR), at the choice of the borrower.

 

Advantages of the DPA Edge Repayable Second product include:

• No max income restrictions
• Non-occupant co-borrowers are allowed
• DTI limit based on FICO amount, ranging from 45% to AUS approval
• Concurrent homeownership allowed

 

This product has the following features:

• No income limits
• Requires monthly payment (which must be factored into DTI ratios)
• FICO Score 600 minimum

 

The DPA Edge Repayable Second FHA overlays include:

• Only offered for one- to two-unit properties
  • Three- to four-unit properties not allowed
• Borrowers with 600–639 credit scores must complete pre-purchase homebuyer counseling prior to closing
  • Lenders are advised to notify their borrowers 14 to 21 days before closing that they need to complete this pre-purchase counseling

 

Visit the Chenoa Fund Correspondent Lending Guide for details.

Go to the HUD Handbook for details.

• DPA Edge Soft Second

The DPA Edge Soft Second product is a forgivable second mortgage that may offer 3.5% or 5% assistance. This assistance is paired with an FHA first mortgage.

The DPA Edge Soft Second may be forgiven if the borrower meets the forgiveness conditions, which depend on the DPA amount:

• 3.5%: Forgivable after 36 consecutive, on-time payments on the FHA first mortgage. This forgiveness period resets if the borrower makes a late payment, but the borrower has the full 30-year term to meet the forgiveness condition. This loan may also be forgiven at the end of the 30-year term if the previous forgiveness condition has not been met.
• 5%: Forgivable after the initial 120 consecutive, on-time payments on the FHA first mortgage. This forgiveness period is terminated if the borrower has a payment that is 60+ days late, but the loan will remain with a 30-year term, 0% interest rate (0% APR), and no monthly payment. This loan may also be forgiven at the end of the 30-year term if the previous forgiveness condition has not been met, even if the borrower made payments on the first mortgage that were 60+ days late.
  The loan will need to be repaid upon transfer of ownership or refinance if it is not already forgiven.

If a borrower meets the forgiveness conditions provided above, the borrower may begin the loan forgiveness process by reaching out to our servicing team (servicing@chenoafund.org).

Borrowers whose credit scores are 600–639 must complete pre-purchase homebuyer counseling prior to closing through any HUD-approved course. Lenders are advised to notify their borrowers 14 to 21 days before closing that the borrowers need to complete this pre-purchase counseling.

 

The advantages of the DPA Edge Soft Second include:

• DTI limit based on FICO amount, ranging from 45% to AUS approval
• 0% interest rate (0% APR), 30-year term, no monthly payment 2nd mortgage
• Possible loan forgiveness
• Concurrent homeownership allowed
• Non-occupant co-borrowers allowed

 

In order to qualify for this product, the borrower must have the following:

• Qualifying Income: < or = 115% AMI
  • Based on qualifying income
• Minimum FICO Score of 600

 

The DPA Edge follows FHA guidelines, with the following overlays:

• Only offered for one- to two-unit properties
  • Three- to four-unit properties not allowed
• Borrowers with 600–639 credit scores must complete pre-purchase homebuyer counseling prior to closing
  • Lenders are advised to notify their borrowers 14 to 21 days before closing that they need to complete this pre-purchase counseling

 

Visit the Chenoa Fund Correspondent Lending Guide for additional details.

Go to the HUD Handbook for details.

• Rate Advantage

The Rate Advantage product is offered by CBC Mortgage Agency.

The Rate Advantage product is a second mortgage that gets paired with an FHA loan; this product offers 3.5% assistance or 5% assistance, which may be applied toward the borrower’s minimum required investment (down payment), closing costs, or prepaid items.

The Rate Advantage has a 10-year term with an interest rate of 6% (6.022% APR). The Rate Advantage product provides a lower interest rate on the first mortgage than the DPA Edge products.

In order to qualify for this product, the borrower must have:

• Qualifying Income: < or = 135% AMI
• FICO Score 640 minimum
• No non-occupant co-borrowers
• No concurrent homeownership
• Max DTI 50%
• No manual underwrites

 

Visit the Chenoa Fund Correspondent Lending Guide for details.

Go to the HUD Handbook for details.

• 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.