The following are commonly asked questions regarding Chenoa Fund, an affordable housing program, and CBC Mortgage Agency, an FHA-approved, federally chartered government agency.
The following are commonly asked questions regarding Chenoa Fund, an affordable housing program, and CBC Mortgage Agency, an FHA-approved, federally chartered government agency.
Chenoa Fund is an affordable housing program provided through CBC Mortgage Agency (CBCMA), a federally chartered government entity. Our programs 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 home ownership for individuals who have the income and credit history to afford a home, but may lack the ability to accumulate a down payment. CBCMA partners with reputable mortgage lenders on a correspondent basis to provide down payment assistance for qualified home buyers in the form of second mortgages.
Homeownership isn’t for everyone—but housing is. While we have minimum credit scores and debt/income ratio restrictions that may put some borrowers out of the reach of our direct assistance. We believe that by assisting credit-worthy families to overcome barriers, we can reduce the competition for “rental” housing, which in turn helps to reduce its cost and increase its availability for those we cannot assist directly.
Chenoa Fund has served the U.S. first-time homebuyer market in a significant way, having completed more than 10,000 mortgage transactions since 2013.
As a government entity, CBCMA is invested in the success of the borrowers utilizing its Chenoa Fund program. CBCMA takes great care in not just making sure that borrowers can qualify for a home, but that they become successful long-term homeowners. Borrower’s needing extra support receive pre-purchase counseling and all borrowers are given outreach and counseling for the first 18 months after the purchase of their new home to help them to successfully navigate the challenges of owning a home, many for the first time.
As a homeowner, you may experience benefits such as…
1 Attom Data Solutions: Buying More Affordable than Renting in 66 Percent of U.S. Housing Markets
Are you looking for ways to attract more borrowers to your homes as a listing agent? When you advertise that your home qualifies for down payment assistance, you will increase the number of leads you receive on your listing.
You can promote down payment assistance on listing promotion flyers, post cards, sign riders, web listings, and more.
Under our program, buyers who meet our eligibility criteria may receive a second mortgage equal to 3.5% of the purchase price or appraised value (whichever is lower) of the home they are looking to purchase. This assistance can be used to cover the down payment, closing costs, or prepaid items, or any combination of the three, of an FHA or conventional loan. In addition, our Rate Advantage program offers both 3.5% DPA and 5% DPA for FHA loans. We believe that by helping responsible home buyers meet that minimum investment required for a mortgage, we create healthier communities by improving the balance between homeownership and other housing types.
Most first-time buyers manage to purchase a home by saving for a down payment over a period of years, or perhaps receiving gifts from parents or other family members. But increasing home prices and stagnant or low wages can make this process difficult, and many Americans lack the earning power to reach that home buying mark. As a result, they have no way to break into homeownership and reap its economic benefits for themselves and for their children.
Studies reveal that many would-be buyers have the income and credit history to qualify for a loan, but they lack sufficient savings for a down payment. This barrier is often the most significant economic obstacle for families seeking to transition from renting to sustainable homeownership, and the consistent availability of down payment assistance programs can make all the difference for more U.S. families.
Homeownership rates have decreased over the last ten years, and this decline was most dramatic among minority households, millennials and single-parent households. The need for down payment assistance is greater than ever.
We believe in helping people buy now (if they credit qualify), so they can begin building up equity today.
In a 2017 survey taken by the Urban Institute and the Federal Reserve1, 53% of renters stated that they continued to rent because of their inability to afford a down payment.
Another Urban Institute survey, conducted with Fannie Mae®, reports that down payment assistance and lower down payment mortgages have become increasingly critical to the health of the housing market. Minorities are especially in need of assistance, as many do not have family who can help them buy their first home. Without assistance, most will not become homeowners.
The Chenoa Fund is a down payment assistance program provided by CBC Mortgage Agency. Under the program, buyers who meet certain eligibility criteria may receive a second mortgage to cover the 3.5% minimum down payment requirement when purchasing an FHA-insured or conventional loan. By helping home buyers responsibly meet that minimum investment required for a mortgage, we create healthier communities by improving the balance between homeownership and other housing types. Homeownership is the number one creator of household wealth.
CBCMA is accountable to FHA. FHA has strict guidelines under which down-payment assistance programs are administered. CBCMA carefully reviews every loan to ensure borrower success. All borrowers receive post-purchase counseling to ensure the transition to homeownership is successful.
1 NCSHA Blog: Urban Institute Report Touts Importance of HFA Down Payment Assistance Programs, November 17, 2017
Not when done correctly. The CBC Mortgage Agency, which offers the Chenoa Fund program, is an approved government lender and strictly adheres to all FHA guidelines. The Chenoa Fund also seeks to work with borrowers who are qualified and capable of undertaking homeownership. For one thing, borrowers must meet our minimum credit score, which is higher than the credit score allowed by FHA. In an effort to minimize risk to the FHA insurance fund, we also provide pre-purchase homebuyer education to those who need it and education and counseling for all borrowers during their first year of homeownership. In addition, because borrowers who use our program are able to keep what savings they have, they are better able to handle unexpected costs during the critical first years of homeownership.
CBCMA offers one set of more flexible guidelines across the nation, reducing the burden lenders currently face by administering multiple programs.
Generally speaking, better pricing, allowing better terms to the borrower. We have the ability to help more borrowers due to income, geographic, 1st time homebuyer, and other restrictions in place with most programs.
The Chenoa Fund offers three second lien products that are issued in conjunction with first mortgages that are either FHA-insured or conventional loans. They include:
Chenoa Fund Down Payment Assistance 2nd liens can be used in conjunction with either an FHA-insured 1st mortgage or conventional 1st mortgage financing so long as the first mortgage adheres to applicable underwriting guidelines. Chenoa Fund down payment assistance paired with an FHA loan is always 3.5% of the purchase price or appraised value, whichever is lower, except in the case of the Rate Advantage product, which has a both a 3.5% DPA and a 5% DPA option.
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. Borrowers receiving this assistance must meet the guidelines outlined for the conventional standard 97% LTV loans or HomeReady®* program. 1
*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 a CBCMA second mortgage in conjunction with the originating lender’s 1st mortgage are compliant with Fannie Mae® requirements.
CBCMA can only offer CBCMA 2nd mortgages in conjunction with a lender’s conventional 1st mortgage loan when the lender is FNMA approved and has the ability to run DU.
In order to qualify for a CBCMA 2nd mortgage with conventional 1st mortgage financing, the borrower must meet program criteria (for the 2nd lien) including the following:
Additional qualifications for the conventional standard 97% LTV program:
*There are no income limits under the conventional standard 97% LTV program
Additional qualifications for the HomeReady® program
A leading non-profit homebuyer counseling agency based in Houston, TX, known as Money Management International (MMI; welcome.moneymanagement.org) works closely with CBC Mortgage Agency on a QA and Homebuyer Education initiative. Money Management International provides financial education for first-time homebuyers receiving Chenoa Fund down payment assistance, to ensure that new homeowners understand the importance of making their mortgage payments on time. This education component is part of an overall lending strategy developed by MMI to help CBCMA’s borrowers sustain homeownership, while simultaneously improving loan performance measures in an effort to maintain the financial soundness of the FHA insurance program.
The MMI/CBCMA outreach and education program engages all new CBCMA homeowners each month during the first eighteen months of homeownership. Each homeowner receives financial advice from a HUD-approved nonprofit housing counselor targeted to their specific needs, with the goal of helping them make their mortgage payments on time. The counselor will also teach customers how to build a budget, save money for home repairs and other steps needed to maintain responsible homeownership.
MMI also counsels with all borrowers with a credit score less than 640 prior to purchase to ensure they are prepared for the challenges of homeownership.
Yes. In 2017 the National Association of Realtors1 released a study entitled, “Social Benefits of Homeownership and Stable Housing,” findings revealed that…
1 National Association of Realtors: Social Benefits of Homeownership and Stable Housing, November 17, 2017
If you would like more information about this program, please contact our program development team.
Phone: 866-563-3507
Email: info@chenoafund.org
CBCMA Does Not Originate Mortgage Loans. This is not an offer to lend money nor a solicitation of a mortgage application by CBCMA.