Oregon Chenoa Fund

Down Payment Assistance On FHA and Conventional Loans

Chenoa Fund

The Chenoa Fund is an affordable housing program administered by CBC Mortgage Agency (CBCMA), a federally chartered government entity. CBCMA specializes in providing down payment assistance financing under FHA and conventional guidelines.

 

CBCMA has a mission to increase affordable and sustainable homeownership, specifically for creditworthy, low- and moderate-income individuals. CBCMA partners with reputable mortgage lenders on a correspondent basis to provide loans for qualified homebuyers. CBCMA has several program options to choose from that include down payment assistance in the form of second mortgages on:

  • Conventional loans
  • FHA insured loans

 

Chenoa Fund Down Payment Assistance Loans

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 homeownership 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 may become even more unaffordable.

 

Chenoa Fund provides the down payment to assist you with a home purchase. There are no first-time borrower requirements. The following are the primary programs offered by CBCMA.

 

FHA Loans

Chenoa Fund DPA Edge Soft Second product. With this program, you receive a 30-year term, 0% interest rate, no monthly payment, second mortgage. You will need to meet the minimum credit score of 620 and have a qualifying income equal or less than 115% of the median income for the county in which the you will live. The loan is forgiven when you make 36 consecutive, on-time payments on the first mortgage.

 

Chenoa Fund Edge: Repayable Second product. With this program, there are no income limitations. There are two options for a repayable second. You can choose a 10-year repayable second at 0% interest rate or a 30-year repayable second at 5% interest rate. You will need to meet the minimum credit score of 620.

 

Chenoa Fund Rate Advantage program. With this program, you are able to lock their first mortgage at market comparable rate. You will need to meet the 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 you will live. This is Chenoa Fund’s only program that offers both 3.5% down payment assistance and 5% down payment assistance.

 

Conventional Loans

CBCMA 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 you do not fit the HomeReady® criteria but may not have the resources for a larger down payment on a home purchase, you 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.

 

There are no household income limits under a conventional standard 97% LTV program. You will need to meet minimum credit score of 640 and all other guidelines for the conventional standard 97% LTV or HomeReady® programs. CBCMA’s correspondent guidelines may include additional overlays to the HomeRead® program. 2 *

 

*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 CBCMA second mortgages, the CBCMA first mortgage, and the combination of the CBCMA first and second mortgages are compliant with Fannie Mae® requirements.

 

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

 

1 HomeReady® is a registered trademark of Fannie Mae.
2 CBCMA’s correspondent guidelines include additional overlays to the HomeReady® program.

 

Basic Qualifying Requirements

There are several ways to structure the Chenoa Fund programs including FHA & Conventional products.  The qualifying criteria will vary depending on the loan structure.  However, below are the basic qualifying criteria for the down payment grants.  Contact us to get qualified to purchase based on your specific scenario though.

620+ FICO Score – You can boost your score instantly at https://www.experian.com/consumer-products/score-boost.html

Income less than 115%-135% (varies by product) of the median income in the county you live (this qualification varies by product, there are zero down products for higher income earners)

Debt ratio of 50% or less

Start The Process

Complete the form below to tell us about your wants & needs.

We will then send you a list of properties for sale that match your  wants & needs.

Apply for Down Payment Assistance – we will send you a referral to a Chenoa Fund partner.  They can typically qualify you within 24 hours!

Pick a home!  Once approved, we can start touring homes to purchase!  For first time buyers, prior to touring, we will conduct a buyer’s consultation so you know what to expect during the home purchase process.  We will discuss things like earnest money, inspection periods, appraisals, the state of the market etc.

    TIP: Get an instant credit score boost at https://www.experian.com/consumer-products/score-boost.html

Home Buyer Programs

Chenoa Fund is an affordable housing program administered by CBC Mortgage Agency (CBCMA), a federally chartered government entity. CBCMA specializes in providing down payment assistance (DPA) for borrowers receiving a FHA insured first mortgage.

 

CBCMA has a mission to increase affordable and sustainable homeownership, specifically for creditworthy, low- and moderate-income individuals. CBCMA partners with reputable mortgage lenders on a correspondent basis to provide down payment funds for qualified home buyers in the form of second mortgages. All assistance is provided in compliance with FHA guidelines.

 

How do you qualify for the Chenoa Fund DPA Edge: Soft Second product?

In order to qualify for this particular Chenoa Fund DPA Edge: Soft Second product, you must meet program criteria, including the following:

  • You have a minimum credit score of 620
  • Your qualifying income is equal to or less than 115% of the area median income for the county in which the you will live (Note: If you make more than 115% median income, ask about the Chenoa Fund DPA Edge: Repayable Second program.)

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.

If for some reason you are unable to make 36 consecutive on-time payments at any time during the term of the second mortgage (360 months), then you would be required to repay the entire amount of the down payment funds lent to you at the end of the 30 year period.

 

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 CBCMA. Once confirmed by CBCMA, 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.

Note: If for some reason you are unable to make 36 consecutive on-time payments at any time during the term of the second mortgage (360 months), then you would be required to repay the entire amount of the down payment funds lent to you at the end of the 30 year period.

 

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.

 

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

Chenoa Fund is an affordable housing program administered by CBC Mortgage Agency (CBCMA), a federally chartered government entity. CBCMA specializes in providing down payment assistance (DPA) for borrowers receiving an FHA 1st mortgage.

 

CBCMA has a mission to increase affordable and sustainable homeownership, specifically for creditworthy, low- and moderate-income individuals. 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 and gifts. All assistance is provided in compliance with FHA guidelines.

 

How do you qualify for the Chenoa Fund DPA Edge: Repayable Second product?

In order to qualify for the Chenoa Fund DPA Edge: Repayable Second product, you must meet program criteria, including the following:

  • Minimum credit score of 620
  • Meets FHA guidelines
  • No income restrictions on this loan—minimum or maximum

 

With this program, you are not required to meet a household income threshold. 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, 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.

 

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

Chenoa Fund is an affordable housing program administered by CBC Mortgage Agency (CBCMA), a federally chartered governmental entity.  CBCMA specializes in providing down payment assistance financing for borrowers receiving a FHA 1st mortgage.

 

CBCMA’s mission is to increase affordable and sustainable homeownership, specifically for creditworthy, low- and moderate-income individuals. 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. All assistance is provided in compliance with FHA guidelines.

 

What does the Chenoa Fund Rate Advantage Program offer?

With Chenoa Fund’s rate Advantage program, the borrower may receive either 3.5% or 5% down payment assistance on an FHA loan. This assistance may be applied to the down payment, closing costs, prepaid items, or any combination of the three.

How does the borrower qualify for the Chenoa Fund Rate Advantage program?

In order to qualify for the Chenoa Fund Repayable Second DPA (down payment assistance) program, you must meet program criteria, including the following:

  • Minimum credit score of 640
  • Qualifying income is equal or less than 135% of the area median income for the county in which you will live
  • Debt to income ratio cannot exceed 50%

 

With this program, you will be able to lock their first mortgage at market comparable rate.

 

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, 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.

 

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

Chenoa Fund is an affordable housing program administered by CBC Mortgage Agency (CBCMA), a federally chartered government entity. CBCMA’s mission is to increase affordable and sustainable homeownership, specifically for creditworthy, low- and moderate-income individuals. CBCMA partners with quality mortgage lenders on a correspondent basis. CBCMA has a conventional program with two products, the Conventional 97 and the HomeReady®.

 

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 Conventional Standard 97% LTV loans or the 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 CBCMA second mortgages, the CBCMA first mortgage, and combination of the CBCMA first and second mortgages are compliant with Fannie Mae® requirements.

 

How do you qualify for the Chenoa Fund Conventional program?

In order to qualify for the Chenoa Fund conventional program, the borrower must meet program criteria, including the following:

  • Minimum credit score of 640
  • Debt to income ratio per AUS findings (max 50%)

 

Qualifications2 for the conventional standard 97% LTV program

  • At least one of the borrowers must be a first-time homeowner
  • No income limits under the conventional standard 97% LTV program

 

Qualifications2 for Fannie Mae’s HomeReady® Program

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

 

Why was the Chenoa Fund Conventional program created?

Homeownership isn’t for everyone—but housing is. While CBCMA’s minimum credit scores and debt to income ratio restrictions may put some borrowers out of the reach of receiving direct assistance, CBCMA believes that through assisting creditworthy families to overcome down payment barriers, CBCMA 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.

 

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

 

1 HomeReady® is a registered trademark of Fannie Mae.
2 CBCMA’s correspondent guidelines include additional overlays to the HomeReady® program.

Down Payment Assistance FAQs

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 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 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 homebuyers in the form of second mortgages.

 

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, 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 using Chenoa Fund. 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:

 

      • 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 thirty (30) years. The principal payment builds equity.
      • Savings and Equity. Most homeowners are better able to accumulate savings necessary for anything from family emergencies, to saving for a child’s education, to ensuring a secure retirement. When you own your home, chances are your equity will grow over time. Conversely, families struggle to build savings when forced to sink a large proportion of their income into annually increasing rents, 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. You are more likely to become invested in the community when you own a home,  as well as care 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

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.

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. CBC Mortgage Agency, which offers the Chenoa Fund program, is an approved government lender and strictly adheres to all FHA guidelines. Chenoa Fund, the program, 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 flexible guidelines across the nation, reducing the burden lenders currently face by administering multiple programs.

 

Generally speaking, CBCMA also offers better pricing, allowing better terms to the borrower. We have the ability to help more borrowers compared to the restrictions set by income, geographic, 1st time homebuyer, and other requirements in place with most programs.

The Chenoa Fund program 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 or Soft Second)
      • Conventional

 

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. All Chenoa Fund down payment assistance for FHA loans provides 3.5% down payment assistance, with the exception of the Rate Advantage product, which may provide either 3.5% or 5% down payment assistance.

 

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 income limits set by Fannie mae
    • One of the loan applicants must complete an approved homeowner education course

PLEASE NOTE:  As a licensed Oregon Real Estate Broker, part of my job is to educate first time buyers on the entire process.  Contact me to schedule a no obligation home buyer’s consultation.

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 (CBCMA) on a QA and Homebuyer Education initiative. MMI provides financial education for first-time homebuyers receiving Chenoa Fund down payment assistance, 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 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 revealing 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 homeowning parents compared to those in renter households.
      • Students from low- to 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

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