Who Is Eligible and What Properties Are Eligible

The Chenoa Fund is a national program available in 49 states. The only state where the program is currently not offered is New York. If you are looking to purchase a home in any other U.S. state, you are geographically eligible to apply, provided the property meets all other program guidelines. Additionally, specific restrictions apply to properties located in FEMA-declared disaster areas. If a home is located in a disaster zone eligible for individual assistance, it must undergo an inspection to verify it is in marketable condition and free of damage before it can be financed.

Borrowers must meet the Federal Housing Administration (FHA) definition of a lawful resident of the United States. This eligibility includes U.S. citizens, lawful permanent resident aliens, and non-permanent resident aliens who possess a valid Employment Authorization Document (EAD) issued by USCIS. The property must be the borrower’s principal residence. Individuals without lawful residency status are not eligible for FHA-insured mortgages and, consequently, are ineligible for Chenoa Fund assistance. Lenders are required to verify residency status through appropriate documentation, such as Social Security cards, EADs, or evidence of permanent residency, to ensure compliance with federal guidelines.

While CBC Mortgage Agency participates in the USDA Rural Development loan program, it is critical to understand that Chenoa Fund down payment assistance cannot be paired with USDA loans. The USDA loan is a standalone zero-down mortgage product that allows borrowers to finance 100% of the home’s value without a down payment. Therefore, if you are applying for a USDA loan through a participating lender, you will not receive the 3.5% or 5% secondary financing assistance. Furthermore, USDA loans have their own strict household income limits that differ from the FHA-paired Chenoa Fund products.

Debt-to-Income (DTI) requirements are primarily determined by the findings of an Automated Underwriting System (AUS), such as Desktop Underwriter (DU) or Loan Prospector (LP). For eligible borrowers with credit scores of 600 and above, the program generally accepts the DTI ratio approved by the AUS without imposing a stricter hard cap. This means that if the automated system provides an “Approve/Eligible” finding, the DTI is usually acceptable. Manual underwriting is currently suspended for the program, so all loans must receive an automated approval to be eligible for purchase by CBC Mortgage Agency.

No, the Chenoa Fund is strictly designed for owner-occupied properties. At least one borrower on the loan must occupy the home as their primary residence, typically within 60 days of closing. Investment properties, vacation homes, and “building on own land” transactions are not eligible for this assistance. However, the program does allow for non-occupant co-borrowers, such as a family member who wishes to co-sign the loan to help you qualify. In such cases, the non-occupant’s income is used for debt-to-income qualification, but income limits for forgivable products often focus on the occupying borrower’s income.

Yes, manufactured homes are eligible, but they are subject to strict additional requirements to ensure the quality of the collateral. To qualify, the home must be a multi-wide unit (double-wide or larger); single-wide mobile homes are strictly prohibited. The home must have been built on or after June 15, 1976, and must bear the HUD Certification Label/Tag. Furthermore, the home must be permanently affixed to the land, and the title must be surrendered or purged to classify the home as real property. A structural engineering report is also required to verify the foundation complies with HUD standards.

The Chenoa Fund follows FHA 203(b) guidelines regarding eligible collateral but applies specific overlays. Eligible property types include single-family residences, Planned Unit Developments (PUDs), townhomes, and FHA-approved condominiums. Modular homes and manufactured homes are also eligible if they meet specific construction and title criteria. However, the program is stricter than standard FHA guidelines regarding the number of units; only 1–2 unit properties are permitted. Three-to-four unit properties are explicitly ineligible for assistance. Additionally, cooperatives (co-ops) and commercial farms are not eligible, as the program is designed strictly for residential homeownership.

No, you do not need to be a first-time homebuyer to qualify for the Chenoa Fund. The program is open to both first-time buyers and repeat homeowners, provided the new property is intended to be your primary residence. Even if you currently own another property, you may still be eligible to apply, but you must provide a Letter of Explanation (LOE) detailing your motivation for moving and your intent to retain your current residence. This flexibility makes the program a valuable resource for families needing to relocate or resize who may have equity tied up in a previous home.

One of the program’s most distinct features is its flexibility regarding income. For the repayable down payment assistance products, there are typically no borrower income limits, allowing moderate-to-higher income earners who lack liquid savings to qualify. However, if you are applying for forgivable assistance (often called DPA Edge), income caps generally apply. These limits are usually set at 115% or 135% of the Area Median Income (AMI) for the county where the property is located. Lenders calculate this based on the qualifying income reported on your final loan application to ensure the program reaches the intended demographic.

To qualify for the Chenoa Fund down payment assistance program, you generally need a minimum credit score of 600. Unlike some other lending options that may accept borrowers with no credit score using alternative trade lines, this program strictly mandates that all borrowers on the transaction must have at least one valid credit score. When determining your eligibility, lenders follow standard industry practices by using the lower of two scores or the middle of three scores for the qualifying borrower. While 600 is the baseline, certain product variations or lender-specific overlays may require higher scores, such as 620 or 640.