CMG Classic Community Lending Program – Chase CRA

Since this program supports Loan-to-Value (LTV) ratios up to 97%, Private Mortgage Insurance (PMI) is frequently required for loans with an LTV exceeding 80%. The program mandates standard MI coverage rather than reduced coverage, unless the loan is combined with HomeReady or Home Possible. For example, a loan with an LTV between 95.01% and 97% requires 35% coverage. Importantly, all mortgage insurance premiums must be escrowed; borrowers cannot pay these separately unless they have opted for a single-premium policy paid upfront. This ensures that the insurance coverage remains active and protects the lender against default on high-LTV loans.

Yes, the program allows for escrow holdbacks to complete minor repairs that do not affect the safety or soundness of the property. These holdbacks are permitted specifically for minor improvements postponed due to inclement weather or material shortages. A “$0 Escrow Holdback” option exists for 1-unit primary residences if the cost of repairs is less than $12,000 or 2% of the “as completed” value. In these cases, the funds do not necessarily need to be collected at closing if an agreement is in place. Once repairs are finished, a Certificate of Completion signed by the appraiser is required to close out the holdback.

Escrow waivers are permitted under specific conditions, primarily depending on the Loan-to-Value (LTV) ratio and state laws. Generally, borrowers may request to waive escrow accounts for taxes and insurance if the LTV is 90% or less. However, strict state-specific restrictions apply; for instance, in New Mexico, escrows cannot be waived on primary residence transactions with an LTV of 80% or higher. Conversely, in California, an LTV of less than 90% is required to waive escrows. Regardless of the LTV, flood insurance escrows cannot be waived for properties in Special Flood Hazard Areas, and private mortgage insurance premiums must always be escrowed.

While the loan may be originated by a correspondent lender like CMG, the servicing rights are sold to Chase. This means it is “not a CMG serviced product,” and the borrower will interact with Chase for all loan administration after closing. Once the loan is onboarded to the Chase servicing system, borrowers have access to various payment methods provided by Chase. These include enrolling in automatic payments (monthly, twice a month, or every two weeks), making one-time online payments for monthly dues or principal reduction, or using traditional methods like checks or money orders. Borrowers can also manage their account and escrow details through the Chase website.

No, the CMG Classic Community Lending Program is strictly available for Primary Residence transactions only. Borrowers must intend to occupy the subject property as their principal home. Investment properties and second homes are not eligible for financing under this specific product code. However, the program does allow for non-occupant borrowers (co-borrowers who will not live in the property) to help qualify for the loan, provided they meet the respective Agency guidelines applicable to the transaction. This structure supports homebuyers who may need family members to assist with income qualification while ensuring the primary goal of owner-occupancy is met.

The program allows for the financing of 1-4 unit residential properties, Planned Unit Developments (PUDs), and condominiums. Condominiums must meet the respective Agency guidelines based on the automated underwriting method used. Cooperative share loans (co-ops) are also eligible but are strictly restricted to properties located in Washington D.C., Maryland, New Jersey, and specific counties in New York. The program explicitly excludes manufactured homes, including manufactured housing accessory dwelling units (ADUs). Additionally, properties associated with unique risks, such as those in Lava Zones 1 and 2, boarding houses, bed and breakfasts, or properties with unexpired redemption periods, are ineligible for purchase.

Unlike many affordable housing programs such as Fannie Mae HomeReady or Freddie Mac Home Possible, the CMG Classic Community Lending Program generally does not impose income limits on borrowers. Eligibility is primarily driven by the census tract of the property rather than the borrower’s earnings. This feature allows higher-income borrowers who are purchasing in designated underserved communities to utilize the program’s flexible underwriting standards. However, if a borrower chooses to layer this program with Agency-specific products like HomeReady or Home Possible to access lower mortgage insurance rates, the specific income limits associated with those Agency programs would then apply.

Yes, the program is often compatible with the Chase Homebuyer Grant, which provides significant financial assistance to eligible borrowers. This grant is geography-based, targeting majority-Black, Hispanic, or Latino communities identified by U.S. Census data. Eligible customers purchasing homes in these areas can receive up to $5,000, and in select markets, this amount has been increased to $7,500. These funds can be applied toward buying down the interest rate (points), covering closing costs, or reducing the down payment. This grant does not require repayment, making it a powerful tool for reducing the upfront capital required to purchase a home in these targeted census tracts.

To qualify for this program, borrowers must meet specific credit score benchmarks that vary based on the Loan-to-Value (LTV) ratio. For purchase transactions and no cash-out refinances with an LTV of 95% or less, a minimum credit score of 620 is required. However, for high-LTV transactions between 95.01% and 97%, the minimum score increases to 640. Regarding debt obligations, the program offers significant flexibility. The maximum Debt-to-Income (DTI) ratio is capped at 50.494% or the limit determined by the Automated Underwriting System (AUS) findings, whichever is more restrictive. Manual underwriting is not permitted; all loans must receive an Approve/Eligible or Accept/Eligible finding.

The primary driver for eligibility in the CMG Classic Community Lending Program is the geographic location of the property rather than the borrower’s income level. This program is available specifically for properties located within designated “Correspondent Community Lending Census tracts”. Because eligibility is tied to the collateral’s address, lenders cannot rely on a standard rate sheet; instead, they must utilize a pricing engine like Optimal Blue to confirm if a specific address qualifies. While the program supports community development goals, it operates as a standard Conventional loan product, meaning the borrower must also meet standard credit and residency requirements, such as being a U.S. citizen or eligible permanent/temporary resident.