Chenoa Fund is a national down payment assistance program administered by CBC Mortgage Agency, a federally chartered governmental entity. CBC Mortgage Agency specializes in providing down payment assistance financing under FHA and FNMA conventional guidelines.
CBC Mortgage Agency has a mission to increase affordable and sustainable homeownership, specifically for creditworthy, low- to moderate-income individuals. CBC Mortgage Agency partners with reputable mortgage lenders on a correspondent basis to provide loans for qualified homebuyers. Through the Chenoa Fund program, CBC Mortgage Agency has several product options to choose from that include down payment assistance in the form of second mortgages on FHA-insured loans and FNMA conventional loans.
Chenoa Fund Down Payment Assistance
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 create healthy communities by improving the balance between homeownership and other types of housing. This way, new homeowners can start building equity for their future now, rather than potentially waiting for years to save up a down payment while home prices become even more unaffordable.
Through the Chenoa Fund program, CBC Mortgage Agency provides the down payment to assist the borrower with a home purchase. There are no first-time borrower requirements for most Chenoa Fund products. The following are the primary products offered by CBC Mortgage Agency through the Chenoa Fund program.
DPA Edge Soft Second. With this product, the borrower receives a 30-year term, 0% interest rate (0% APR), no monthly payment second mortgage. The borrower will need to have a minimum credit score of 600 and a qualifying income equal or less than 115% of the median income for the county in which the borrower will live. The loan is forgivable under conditions dependent on the down payment assistance 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 conditions. 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.
DPA Edge Repayable Second. With this product there are no income limitations. There are two options for a repayable second. The borrower may choose a 10-year repayable second at a 0% interest rate (0% APR) or a 30-year repayable second at a 5% interest rate (5.009% APR). The borrower will need to meet the minimum credit score of 600. This product offers both 3.5% down payment assistance and 5% down payment assistance options.
Rate Advantage. With this product, the borrower is able to lock the FHA first mortgage at market-comparable rate. The borrower will need to meet a minimum credit score of 640, have a debt-to-income ratio of 50% or less, and have a qualifying household income less than or equal to 135% of the median income for the county in which the borrower will live. The Rate Advantage product offers both 3.5% down payment assistance and 5% down payment assistance options.
Chenoa Fund Down Payment Assistance for Conventional Loans
CBC Mortgage Agency offers down payment assistance to those who qualify for a 97% LTV conventional first mortgage under Fannie Mae®’s HomeReady® program1 for low- to moderate-income borrowers, with expanded eligibility for homes in low-income communities. If the borrower does not fit the HomeReady® criteria but may not have the resources for a larger down payment on a home purchase, the borrower may still qualify for the standard conventional 97% loan-to-value program and receive assistance from CBC Mortgage Agency for the down payment and some closing costs. CBC Mortgage Agency offers 3.5% down payment assistance through the Chenoa Fund program for both FNMA loans if the borrower qualifies.
There are no household income limits for a conventional standard 97% LTV loan. To qualify for Chenoa Fund down payment assistance the borrower will need to meet a minimum credit score of 640 and all other guidelines for the conventional standard 97% LTV or HomeReady® programs. CBC Mortgage Agency’s correspondent guidelines may include additional overlays to the HomeReady® program2*.
*Neither CBC Mortgage Agency nor any of the Chenoa Fund products are approved by or affiliated with Fannie Mae®. It is the originating lender’s responsibility to ensure that the use of CBC Mortgage Agency second mortgages, the first mortgage, and the combination of the first and second mortgages are compliant with Fannie Mae® requirements.
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.
1HomeReady® is a registered trademark of Fannie Mae.
2CBC Mortgage Agency’s correspondent guidelines include additional overlays to the HomeReady® program.