Chenoa Fund™ is a national down payment assistance program operated by CBC Mortgage Agency, a subsidiary of Cedar Band Corp. Chenoa Fund™ products are designed to increase access to homeownership for creditworthy families.
It’s our core belief that everyone in America deserves access to affordable housing and it’s our mission to help make that happen. We provide tools that open doors to homeownership for individuals who have the income and credit history to afford and maintain a home but may lack the ability to accumulate a down payment. CBC Mortgage Agency partners with reputable mortgage lenders on a correspondent basis to provide down payment assistance in the form of second mortgages to qualified homebuyers.
Homeownership isn’t for everyone—but housing is. While we have minimum credit scores and debt-to-income ratio restrictions that may put some borrowers out of the reach of our direct assistance, we believe that, by assisting creditworthy families to overcome barriers, we can reduce the competition for rental housing. This in turn helps to reduce rental costs and increases rental availability for those we cannot assist directly.
The Chenoa Fund™ program consists of various down payment assistance offerings in the form of second mortgages. Buyers who meet our eligibility criteria may receive a second mortgage to cover the 3.5% down payment requirement for FHA-insured loans or the 3% minimum down payment required on a FNMA conventional loan. We believe that helping responsible homebuyers meet that minimum investment required for a mortgage creates healthier communities by improving the balance between homeownership and other housing types. Services are as follows:
Down Payment Assistance for FHA Loans
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 have a qualifying income equal to 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 has a late payment.
- 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.
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 3.5% 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 90–97% LTV conventional first mortgage under Fannie Mae®’s HomeReady® program1 for low- to moderate-income borrowers. For those borrowers who do not fit the HomeReady® criteria, CBC Mortgage Agency also offers down payment assistance for the Fannie Mae™ Standard Conventional (90–95% LTV) and Conventional 97 programs. CBC Mortgage Agency offers 3% or 5% down payment assistance through the Chenoa Fund™ program if the borrower meets the requirements for both the first mortgage and Chenoa Fund™.
1 HomeReady® is a registered trademark of Fannie Mae.