Show support for a withdrawal of Mortgagee Letter 2019-06

CBCMA secured 90 day stay to Mortgagee Letter 2019-06 while the merits of its case are heard by the courts
All case numbers issued before July 23, 2019 are still eligible for FHA insurance.

Realtor FAQs

The following are commonly asked questions regarding the Chenoa Fund, an affordable housing program provided through CBC Mortgage Agency, an FHA approved, federally chartered government agency.



  • What is the Chenoa Fund?
    • Chenoa Fund is an affordable housing program provided through CBC Mortgage Agency (CBCMA), a federally chartered governmental entity. Our programs are designed to increase access to homeownership for credit-worthy 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.


      Home ownership 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.


      The 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.

    • What kind of support do borrowers receive when using the Chenoa Fund?
      • As a governmental 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 12 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.

      • What difference can homeownership really make to the Chenoa Fund borrower?
        • As a homeowner, you may experience benefits such as…

          • Predictable monthly housing payments. Renters experience an average of 3.5% increase in rent each year. Landlords can raise rent whenever a lease expires. It’s not uncommon for renters to be priced out of rentals. As a homebuyer, you are able to secure a predictable mortgage payment (i.e., principle and interest) for up to 30 years. The principal payment builds equity.
          • Savings and Equity. Most homeowners are more able to accumulate savings that are available for family emergencies to saving for a child’s education and ensuring a secure retirement. When you own your home, chances are your equity will grow over time. Conversely, families forced to sink a large proportion of their income into annually increasing rents, struggle to build savings, a reality that leaves many in a precarious financial situation.
          • Tax benefits. Even with recent changes in tax laws, interest from a home mortgage is still deductible for the vast majority of new homeowners.
          • Ability to make the home your own. As a homeowner, you are able to make the home uniquely yours. Paint a wall, change the carpet, add a cabinet, hang a picture where you want. With rentals, it is at the discretion of the landlord of what you can and can’t do.
          • More affordable monthly payments. According to a 2017 RealtyTrac1 study, in 66% of the markets studied, it is more affordable to buy than to rent. Sure, there’s the upfront cost of the down payment and closing costs, but Chenoa Fund can help with the down payment, while a seller of a home can help with the closing costs.
          • Community connections. When you own a home, you are more likely to become invested in the community, caring about how your taxes are invested in neighborhoods, schools and organizations. You plant roots, make friends, and share experiences cheering for your child’s teams or simply talking with your neighbor about the simple pleasures of the day. This sense of community results in healthier children, lower crime, and improved neighborhoods.


          1 Attom Data Solutions: Buying More Affordable than Renting in 66 Percent of U.S. Housing Markets

        • How can I use the Chenoa Fund to sell more homes?
          • Are you looking for ways to attract more borrowers to you 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 the down payment assistance on listing promotion flyers, post cards, sign riders, web listings and more.

          • How does the Chenoa Fund help buyers overcome the barrier of homeownership?
            • Under our program, buyers who meet our eligibility criteria may receive a second mortgage to cover their 3.5% minimum down payment requirement when purchasing an FHA-insured home or the 3% minimum down payment required on a conventional loan. 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.

            • Why can’t people just save for a down-payment and wait to buy?
              • 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.

              • Is down-payment assistance a responsible option for homeownership?
                • In a 2017 survey taken by the Urban Institute and the Federal Reserve1, 53 percent 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

                • Is down-payment assistance risky?
                  • 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.

                  • What does CBCMA offer which is different and unique?
                    • 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.

                    • Can you provide an overview of the Chenoa Fund 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:

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


                        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.


                        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:

                        • Minimum FICO 640
                        • Debt-to-Income ratio per AUS findings, not to exceed 50%


                        Additional qualifications for the conventional standard 97% LTV program:

                        • At least one of the borrowers must be a first-time home owner


                        *There are no income limits under the conventional standard 97% LTV program


                        Additional qualifications for the HomeReady® program

                        • Home must be located in a low-income census tract, otherwise borrowers must not exceed 100% of the area median income (AMI)
                        • One of the loan applicants must complete an approved homeowner education course

                      • Does Chenoa Fund provide homebuyer education/counseling?
                        • A leading non-profit homebuyer counseling agency based in Baltimore, MD, known as Hope Loan Port ( works closely with CBC Mortgage Agency on a QA and Homebuyer Education initiative. HLP provides financial education for first-time homebuyers receiving Chenoa DPA funds, to ensure new homeowners understand the importance of making their mortgage payments on time. This education component is part of an overall lending strategy developed by HLP to help CBC’s borrowers sustain homeownership, while simultaneously improving loan performance measures in an effort to maintain the financial soundness of the FHA insurance program.


                          The HLP/CBC outreach and education program engages all new CBC homeowners each month during the first year 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.


                          HLP 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.

                        • Are there social benefits that come from owning a home?
                          • Yes. In 2017 the National Association of Realtors1 released a study entitled, “Social Benefits of Homeownership and Stable Housing,” findings revealed that…

                            • Homeowners are generally in a better health condition than those of renters.
                            • Increases in housing wealth were associated with better health outcomes for homeowners.
                            • Low-income people who recently became homeowners reported higher life satisfaction, higher self-esteem, and higher perceived control over their lives. For example, homeowners are more likely to believe that they can do things as well as anyone else, and they report higher self-ratings on their physical health even after allowing for age and socioeconomic factors.
                              Renters who become homeowners not only experience a significant increase in housing satisfaction but also obtain a higher satisfaction even in the same home in which they resided as renters.
                            • Social mobility variables, such as the family financial situation and housing tenure during childhood and adulthood, impacted one’s self-rated health.
                            • Homeowners have a significant effect on their children’s success. The decision to stay in school by teenage students is higher for those raised by home-owning parents compared to those in renter households.
                            • Students from low- and middle-income families are much more likely to enroll in college when their families experienced gains in housing wealth.


                            1 National Association of Realtors: Social Benefits of Homeownership and Stable Housing, November 17, 2017

Requesting Information

If you would like more information about this program, please contact our program development team.

Phone: 866-563-3507


CBCMA Does Not Originate Mortgage Loans. This is not an offer to lend money nor a solicitation of a mortgage application by CBCMA.