Chenoa Fund - Questions and Answers
DPA Edge: Soft Second Product
With this program, you receive a 30-year term, 0% rate, no payment, second mortgage. A lien is placed on the property for the amount of the assistance. The loan is forgiven when you make 36 consecutive on-time payments on the FHA first mortgage.
What is the second lien on the property?
The lien is for the down payment assistance, which is referred to as the second mortgage. This is a 30-year term at a zero percent interest rate. You, as the borrower, will not be required to make any payments on the second. The second can be 100% forgiven after you make 36 consecutive on-time payments to the first FHA mortgage.
What is meant by the loan is forgiven after 36 consecutive on-time payments?
For example, if you receive $10,000 for a down payment under the Chenoa Fund DPA Edge: Soft Second product, when you make 36 consecutive on-time payments to the FHA 1st mortgage, you may provide evidence of these payments in the form of a payment history to CBC Mortgage Agency. Once confirmed by CBC Mortgage Agency, the $10,000 loan is forgiven. If you are 30-days or greater late in making a payment, the 36 consecutive on-time payment period will start over.
What happens if the borrower refinances the first mortgage before the 36 consecutive payments have been met?
Let’s continue the example outlined above. If you received $10,000 for down payment and refinance the first mortgage before meeting the 36 consecutive payments, you would be required to pay the $10,000 back in full.
Why was the Chenoa Fund DPA Edge, Soft Second product created?
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 home buyers to overcome the challenge of the minimum investment required for a mortgage, CBCMA is helping to create healthy communities by improving the balance between home ownership and other types of housing. This way, new homeowners can start now building equity for their future, rather than potentially waiting for years to save a down payment while home prices become even more unaffordable.
Chenoa Fund DPA Edge: Repayable Second product
There are two options for the repayable second. You can choose a 10-year repayable second at 0% interest rate or a 30-year repayable second at 5% interest rate. Because these loans are repayable, you will have a payment for the first mortgage and a payment for the second mortgage. The second mortgage can be paid off at any time during the loan period without penalty.
Why was the Chenoa Fund DPA Edge, Repayable Second product created?
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 home buyers to overcome the challenge of the minimum investment required for a mortgage, CBC Mortgage Agency is helping to create healthy communities by improving the balance between home ownership and other types of housing. This way, new homeowners can start now building equity for their future, rather than potentially waiting for years to save a down payment while home prices become even more unaffordable.
Why was the Chenoa Fund Rate Advantage program created?
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 home buyers to overcome the challenge of the minimum investment required for a mortgage, CBC Mortgage Agency is helping to create healthy communities by improving the balance between home ownership and other types of housing. This way, new homeowners can start now building equity for their future, rather than potentially waiting for years to save a down payment while home prices become even more unaffordable.
Conventional Program
CBC Mortgage Agency 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.
Neither the Chenoa Fund, CBC Mortgage Agency 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 CBC Mortgage Agency second mortgages, the CBC Mortgage Agency first mortgage, and combination of the CBC Mortgage Agency first and second mortgages are compliant with Fannie Mae® requirements.
Why was the Chenoa Fund Conventional program created?
Homeownership isn’t for everyone—but housing is. While CBC Mortgage Agency's minimum credit scores and debt to income ratio restrictions may put some borrowers out of the reach of receiving direct assistance, CBC Mortgage Agency believes that through assisting creditworthy families to overcome down payment barriers, CBC Mortgage Agency 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.
For the details on requirements for each program, please visit Chenoa Fund. As always, The Borrower Success Team is available to assist at 866.550.8099.
***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. ***