If there’s one thing that stands in the way of many ‘would-be homebuyers’ it’s the down payment. Without enough money to put down on a home, many Americans assume that they won’t qualify for a mortgage. This isn’t the case with programs like the Chenoa Fund Home Loan Program.
How Does the Chenoa Fund Home Loan Program Work?
The Chenoa Fund is a loan program operated by the CBC Mortgage Agency. They believe that everyone deserves a chance to become a homeowner, as long as they have the qualifying factors besides the down payment. If you have the credit and income history to prove that you can afford a mortgage payment, but don’t have the down payment necessary to buy a home, the Chenoa Fund may help.
The Chenoa Fund does have specific credit score and debt ratio requirements to make sure that you can comfortably afford the loan. This is in an effort to put credit-worthy families in touch with the loans that they can afford to become homeowners. In exchange, it reduces the number of people that have to rent, which gives those that can’t qualify for the Chenoa Fund a chance to find reputable rental properties.
Typically, you’ll receive a second mortgage, which becomes your down payment. You can receive either 3% or 3.5% of the purchase price of the home, depending on the loan program that you use. You then make payments on both your first and second mortgage after you become a homeowner.
The Types of Assistance for FHA Loans
The Chenoa Fund offers three types of assistance for potential homebuyers using FHA financing:
- Chenoa Fund Edge Program – If you make less than 115% of the average income for your area and you have at least a 620 credit score, you may qualify for this program. It provides a 30-year term mortgage with a 0% interest rate and no payment required. As long as you make 36 on-time payments on your first (FHA) loan, the 2nd mortgage is forgiven.
- Chenoa Fund Repayable Second Mortgage – If you make more than 115% of your area’s median income and you have at least a 620 credit score, you may qualify for this program. You can opt for either a 10-year loan, which you repay at a 0% interest rate or a 30-year loan, which you pay a 5% interest rate.
The Type of Assistance for Conventional Loans
If you qualify for a conventional loan (you have better credit and income), you may get help with the Chenoa Fund. In order to qualify, you must have a credit score of at least 640 and meet the basic conventional underwriting guidelines:
- 640 credit score
- 28% housing ratio
- 36% total debt ratio
- Stable income for the last two years
- Stable employment for the last two years
- No recent bankruptcies or foreclosures
The Chenoa Fund provides qualifying borrowers with a second mortgage to provide the down payment, which the borrower must pay back over the term of the loan.
If you are a credit-worthy borrower that just doesn’t have the money to put down on a home, the Chenoa Fund is a good resource to start. It can help you get the money you need to buy a home as long as you are a good candidate for a mortgage, whether FHA or conventional.