For many people looking into a mortgage for a new home, the largest area of concern is coming up with funds to cover the down payment. This is usually the largest lump sum paid during this process, and some buyers stress significantly about what it will mean if they can’t meet certain minimum thresholds.
At Altius Mortgage and our partners at Mortgage Ogden, we can help both first-time buyers and non-first-time buyers with these concerns. One of the newer programs we can help you assess, one launched in 2018 by CBC Mortgage Agency (CBCMA), is called the Chenoa Fund Conventional Loan Program – it’s a program designed for low-to-moderate income borrowers. Let’s look at the details of how it works, plus a few Chenoa Fund options that are available.
Basics and Benefits
The Chenoa Fund Program is designed to assist borrowers who are short on funds for their down payment, even when using an FHA loan format that generally requires a 3.5 percent payment. It continues to utilize the same basics as the FHA program, plus adds a second grant or mortgage that covers this 3.5 percent figure in total.
For this reason, many buyers who use this program are able to receive complete, 100 percent financing on their mortgage: 96.5 percent through the FHA loan program, and the other 3.5 percent through the Chenoa Fund Program. The program does require a few minimum thresholds, and will be based on your income level. Our next three sections will go over the primary program types offered based on these factors.
The Chenoa Fund Edge Program offers a 30-year term to borrowers, with a 0 percent rate on a no-payment second mortgage. You must have a minimum FICO credit score of 620 to qualify, and must have a reported qualifying income equal to or below 115 percent of the median income for your county.
There are specific qualifications for how this program is terminated, as well. Once you have made 36 consecutive on-time payments on your original FHA mortgage, the Chenoa Fund loan is forgiven.
Rate Advantage Program
The Rate Advantage Program is similar, but also allows borrowers to lock in their first mortgage using market rates. Additional requirements from the Edge Program include a debt-to-income ratio of no higher than 50 percent, plus the same credit score and qualifying income thresholds. For this program, you repay down payment assistance over a 10-year period at an 8 percent interest rate.
Repayable Second Program
The Chenoa Fund program with the fewest income restrictions is the Repayable Second Program, which offers a couple choices for a repayable second mortgage. One option is a 10-year repayable mortgage at 0 percent interest, and the other is a 30-year repayable mortgage at a 5 percent interest rate. Once again, minimum credit score here is 620.
For more on the Chenoa Fund Program and whether it might be right for you, or to learn about any of our mortgage services, speak to the pros at Altius Mortgage today.