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Programs

Chenoa Fund offers several down payment assistance programs that are issued in conjunction with FHA-insured first mortgages and one program with conventional first mortgages. These programs include the following products:

Rate Advantage
DPA Edge Repayable Second
DPA Edge Forgivable Soft Second
Conventional Second (Conventional 97 and HomeReady)

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.

Here are some other key points to remember:

The programs are allowed in all states except New York.
All programs offer 3.5% assistance for the second mortgage, except for the Rate Advantage and DPA Edge Soft Second programs, which offer either 3.5% or 5% assistance. All assistance may be applied to the down payment, closing costs, or prepaid items, or any combination of the three.
Origination charges and lender fees must conform to the 3% 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.
Only the DPA EDGE products allows two-unit properties. No three- to four-unit properties are allowed on any program.
Manufactured homes are allowed under some circumstances.
HPML (Rebuttable Presumption) is allowed, but no High-Cost Mortgages.

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 any HUD-approved course. 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: Soft Second include:

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.

Advantages of the DPA Edge: Repayable Second program include:

No Max Income restrictions
Non-occupant co-borrowers are allowed
DTI per AUS or FHA manual underwriting guides, to a maximum of 50%
Concurrent homeownership allowed

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

No income limits
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.

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 not 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 not 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

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 = 135% 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.

Chenoa Fund Program Guidelines

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