Programs

The Chenoa Fund offers three second lien products that are issued in conjunction with first mortgages that are FHA insured and one with Conventional loans. They include the

• Rate Advantage
• DPA Edge Repayable Second
• DPA Edge Forgivable Soft Second
• Conventional Second

Chenoa Fund Program Guidelines

Unless otherwise specified by published overlays in accordance with CBC Mortgage Agency, all loans delivered are underwritten and closed according to FHA or Fannie Mae guidelines.

 

Some other key points to remember include:

• The programs are allowed in all states except New York.
• All programs offer 3.5% in down payment funds for the second mortgage (3% for the down, .5% for closing costs on a conventional loan).
• Origination charges and lender fees must conform to the QM points and fees rule according to TRID.
• The first mortgage must be sold to CBC Mortgage Agency.
• Your DE underwriter is responsible for underwriting the file – credit and appraisal – and issues final approval to close. Your DE Approved lender closes the loan.
• Approved property types include Attached and Detached SFRs, PUDs, Townhomes, Condos, and Modular Homes.
• DPA EDGE allows two-unit properties. No three-four-unit properties are allowed on any program.
• No manufactured homes.
• HPML (Rebuttable Presumption) is allowed, but no High-Cost Mortgages.

• Chenoa Fund Conventional Program

97% LTV Conventional Mortgage Financing

 

The Chenoa Fund Conventional Program offers two products, Conventional Standard 97% LTV and Fannie Mae HomeReady^{® 1}. The Chenoa Fund Conventional second is compliant with Fannie Mae requirements.

 

Overview. CBCMA provides a second mortgage in an amount of 3.5% to meet the down-payment requirement and assist with some of the closing costs for borrowers that qualify for a 97% LTV Conventional Loan (3% for the down, .5% for closing costs). Borrowers receiving this assistance must meet the guidelines outlined for the conventional standard 97% LTV loans*.

*Neither the Chenoa Fund, CBCMA nor any of their products are approved by or affiliated with Fannie Mae. It is the originating lender’s responsibility to ensure that the use of CBCMA second mortgages, the CBCMA first mortgage, and combination of the CBCMA first and second mortgages are compliant with Fannie Mae requirements.

 

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

 

To qualify for the Chenoa Fund conventional program, the borrower must meet program criteria, including the following:

• Minimum FICO 640
• Debt to income ratio per AUS findings (Max 50%)

 

Additional Qualifications³ for the conventional standard 97% LTV program:

• At least one of the borrowers must be a first-time home owner
• No income limits under the conventional standard 97% LTV program

 

Additional Qualifications 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)
• One of the loan applicants must complete the homeowner education course

 

97% LTV Standard Conventional Program Details: Here is a snapshot of borrower requirements and loan program criteria:

• No borrower investment required
• Single family only
• No income limits
• Purchase only
• All borrowers must have a minimum FICO score of 640
• 30-year Fixed Rate Mortgage
• Second lien is a 10-year fixed rate mortgage with an interest rate set at the first mortgage note rate plus 2%
• MI Coverage 35%
• DU^® Only – to 97
• Concurrent homeownership allowed, but at least one borrower must be first-time homebuyer
• No Homebuyer Education class required

 

Go to the Chenoa Fund Program Guidelines for details..
Go to the Fannie Mae Selling Guide.

 

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

• No borrower investment required
• Single family only
• No income limits in low-income census tracts
• 100% of area median income (AMI) in all other census tracts
• Purchase only
• All borrowers must have a minimum FICO score of 640
• 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 to 97% LTV
• Concurrent homeownership allowed
• Requires borrower to take homebuyer education class

 

Go to the Chenoa Fund Program Guidelines for details.
Go the Fannie Mae Selling Guide.

 

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

• Chenoa Fund DPA Edge Program

The Chenoa Fund DPA Edge Program offers two options, the Soft Second, and the Repayable Second.

 

Chenoa Fund DPA Edge Forgivable Soft Second. The Chenoa Fund DPA Edge-Soft Second product is an FHA mortgage combined with a second that lends 3.5% to cover the borrower’s down-payment.

 

This soft second will be forgiven if the borrower makes thirty-six consecutive on-time payments on the first mortgage.

• What happens if a payment is missed? If the borrower misses a payment at any point during the thirty-six months, the timer will reset, and the borrower will again have thirty-six months to make those on-time payments.
• What happens after 30 years? If the borrower is unable to meet the goal of thirty-six consecutive on time payments, then at the end of the thirty-year term, they will owe the full amount of the second to CBC Mortgage Agency.

 

Borrowers whose credit scores are between 620 to 639 must complete pre-purchase homebuyer counseling prior to closing through Hope Loan Port. Lenders are advised to be sure they notify their borrowers that they need to complete this pre-purchase counseling 14 to 21 days before closing.

 

The advantages of the DPA Edge program includes:

• DTI per AUS or FHA manual underwriting guides
• 0% Interest Rate and 30-year Term, no payment on 2^nd mortgage
• Forgiven after 36 consecutive on-time payments on first mortgage
• Concurrent homeownership allowed
• Non-occupant co-borrowers allowed

 

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

• Qualifying Income: < or = 115% AMI
• Only Qualifying Income used for AMI calculations used in determining whether they qualify for a forgivable 2^nd
• Minimum FICO Score of 620

 

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

• Only offered for one-two-unit properties
• Three-four-unit properties not allowed
• Borrowers whose credit scores are between 620 to 639 must complete pre-purchase homebuyer counseling prior to closing
  • Lenders are advised to be sure they notify their borrowers that they need to complete this pre-purchase counseling 14 to 21 days before closing.

 

Go to the Chenoa Fund Program Guidelines for additional details.

Go to the HUD Handbook for details.

• Chenoa Fund DPA Edge Repayable Second

The Chenoa Fund Edge-Repayable product is a FHA mortgage. CBC Mortgage Agency lends 3.5% to cover the borrower’s down-payment. This percentage goes toward the creation of a repayable second mortgage.

 

The second mortgage for the Repayable Second product is either a 10-year term with a 0% interest rate, or a 30-year term with a 5% interest rate, at the choice of the borrower.

 

The advantages of the DPA Edge program include:

• No Max Income restrictions
• Non-occupant co-borrowers are allowed
• DTI per AUS or FHA manual underwriting guides
• Concurrent homeownership allowed

 

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

• Qualifying Income: > 115% AMI
• Requires monthly payment, which must be factored into DTI ratios
• FICO Score 620 minimum

 

The DPA Edge FHA overlays include:

• Only offered for one-two-unit properties
• Three-four-unit properties not allowed
• Borrowers whose credit scores are between 620 to 639 must complete pre-purchase homebuyer counseling prior to closing
  • Lenders are advised to be sure they notify their borrowers that they need to complete this pre-purchase counseling 14 to 21 days before closing.

 

Go to the Chenoa Fund Program Guidelines for details.

Go to the HUD Handbook for details.

• The Rate Advantage Program

Chenoa Fund Rate Advantage program is offered by CBC Mortgage Agency (CBCMA).

 

Sometimes, borrowers do not have enough savings for a down-payment on a home. This is why CBC Mortgage Agency created the Rate Advantage—to give both borrowers and lenders the opportunity to buy a home today, and enjoy future price appreciation.

 

The Rate Advantage product is a FHA loan. CBCMA offers 3.5% to cover the borrower’s down-payment in the form of a repayable second mortgage.

 

The Rate Advantage is a 10-year loan which has an interest rate of 8% for an FHA loan. The loan provides a lower interest rate on the first mortgage than the DPA Edge Program.

 

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

• Qualifying Income: < or = 115% AMI
• FICO Score 640 minimum
• Non-occupant co-borrowers are not allowed
•  No concurrent homeownership
• Max DTI 50%
• Manual underwrites are not allowed
• Household Income Worksheets are no longer required

 

Go to the Chenoa Fund Program Guidelines for details.

Go to the HUD Handbook for details.