Loan Programs Offered

No, borrowers do not need to be first-time homebuyers to qualify for the Chenoa Fund FHA-paired down payment assistance programs. The program is open to repeat buyers as well, provided the property will be their primary residence. While previous rental history is not required, first-time homebuyers may benefit from providing rental history to assist with automated underwriting findings. However, owning other property is permitted, subject to specific requirements such as a Letter of Explanation detailing the motivation for moving and ensuring compliance with FHA occupancy standards.

Yes, manufactured homes are eligible for Chenoa Fund down payment assistance when paired with an FHA first mortgage. However, strict overlays apply. The home must be a multi-wide unit (double-wide or larger); single-wide units are ineligible. The home must have been built on or after June 15, 1976, bear the HUD Certification Label/Tag, and be permanently affixed to the subject property with the title surrendered or purged to real property. While eligible for the standard FHA-paired DPA, manufactured homes cannot be financed using the USDA program through CBC Mortgage Agency at this time if they require manual underwriting.

Yes, “High Balance” loans—those exceeding the standard conforming loan limit but falling within high-cost area limits—are eligible for Chenoa Fund assistance, with specific restrictions. High Balance loans are permitted when using the Repayable DPA product (for both 3.5% and 5% assistance amounts). They are also permitted for the Forgivable DPA product, but only at the 3.5% assistance level. High Balance loans are not eligible for the 5% Forgivable DPA option. This allows borrowers in expensive housing markets to utilize the program while adhering to risk management guidelines.

The interest rate on the second mortgage depends on the product type. For the Forgivable second mortgage, the interest rate is 0%, meaning no interest accrues on the loan balance. For the Repayable second mortgage, the interest rate is fixed at a rate 1% higher than the interest rate on the FHA first mortgage. For example, if your first mortgage has a rate of 6.5%, the repayable second mortgage would have a rate of 7.5%. The first mortgage itself must always be a fixed-rate loan; adjustable-rate mortgages (ARMs) are not permitted.

Income limits depend on the specific product selected. For the standard FHA-paired down payment assistance products (both repayable and forgivable), current guidelines indicate there are no borrower income limitations. This allows the program to serve a broad range of borrowers, including those with moderate-to-high incomes who lack liquid savings. However, for the USDA loan program, strict income limits apply. Borrowers qualifying for the USDA loan generally cannot earn more than 115% of the Area Median Income (AMI) for their household size and location, consistent with standard USDA Rural Development guidelines.

Yes, the funds provided by the Chenoa Fund second mortgage can be applied toward the borrower’s Minimum Required Investment (MRI), closing costs, prepaid items, or any combination of these. Since FHA loans typically require a 3.5% down payment, borrowers who select the 5% assistance option often have excess funds remaining after satisfying the down payment requirement. These remaining funds can be used to cover closing costs, significantly reducing the cash-to-close amount the borrower needs to bring to the table. This flexibility applies to both the repayable and forgivable product options.

Yes, CBC Mortgage Agency offers a USDA Rural Development (RD) 30-year fixed-rate loan program. However, this is a standalone first mortgage product and is not eligible for Chenoa Fund down payment assistance (secondary financing). The USDA loan is inherently a zero-down program designed for rural and semi-rural areas, allowing borrowers to finance 100% of the home’s value without a down payment. Borrowers must meet USDA-specific income limits (typically capped at 115% of the Area Median Income) and the property must be located in an eligible rural area as defined by the USDA.

For the forgivable second mortgage product, the loan is forgiven after the borrower makes 36 consecutive, on-time payments on the FHA first mortgage. This applies to both the 3.5% and 5% assistance levels. “On-time” means the payment is made within the month it is due and is not 30 days or more delinquent. If a borrower makes a late payment during this period, the 36-month counter resets, and they must start a new streak of consecutive payments to qualify for forgiveness. The loan remains forgivable as long as the condition is met within the 30-year term.

The Repayable DPA option is a fully amortizing second mortgage with a 10-year term. It requires monthly payments and carries an interest rate that is typically 1% higher than the interest rate on the first mortgage. This option generally has no income limits. In contrast, the Forgivable DPA option (often called a “soft second”) has a 30-year term with a 0% interest rate and requires no monthly payments. The loan is forgiven after the borrower meets specific payment history requirements on the first mortgage, making it an attractive option for those planning to stay in the home for several years.

The Chenoa Fund, administered by CBC Mortgage Agency, primarily offers down payment assistance (DPA) paired with FHA-insured loans. This assistance comes in the form of a second mortgage, which can be either repayable or forgivable. There is one unified product for FHA loans that offers either 3.5% or 5% assistance based on the lower of the purchase price or appraised value. Additionally, the agency offers a standalone USDA Rural Development 30-year loan program. It is important to note that the USDA program is a zero-down first mortgage and is not paired with Chenoa Fund down payment assistance secondary financing.