But buying a home in Jefferson County can be challenging, especially for first-time homebuyers. The median home price in the county was $312,000 as of May 2022. That may be lower than Florida's median home price of about $402,837, but it's still out of reach for many buyers.
Sure, you may still get a mortgage to help with your home purchase, but the down payment is still the matter. For many buyers, the down payment is the biggest obstacle to homeownership, with the average American needing to save for six and a half years to raise the conventional 20 percent down payment for a median-priced house.
This is where Chenoa Fund comes in. Chenoa Fund is a down payment assistance program designed to help first-time homebuyers with the funds they need for a down payment.
This guide will provide an overview of the Chenoa Fund DPA program and how it can help you buy a home in Jefferson County, Florida.
What Is Chenoa Fund?
Chenoa Fund is a down payment assistance program administered by the CBC Mortgage Agency. This program is dedicated to increasing sustainable homeownership opportunities for low- and moderate-income families.
Through Chenoa Fund, borrowers can receive between 3.5 percent and 5 percent of the loan amount in down payment assistance funds. If you don't have a strong enough credit score to qualify for Chenoa Fund assistance, you may still be eligible for the Chenoa Fund's credit enhancement program.
The Chenoa Fund's credit enhancement program helps borrowers who may not otherwise qualify for a mortgage due to their credit score get approved for financing. This program is available through a network of approved lenders across the country and can be used with FHA loans.
To participate in the Chenoa Fund's credit enhancement program, you'll need to complete an online education course and obtain a certificate of completion.
What Eligibility Requirements Should I Meet to Qualify?
Like most government-backed programs, Chenoa Fund has some eligibility requirements that you'll need to meet to qualify. Here are some of them.
Appropriate Credit Score
Most loan products have a set credit score requirement that you'll need to meet to qualify, and Chenoa Fund is no different. Typically, you'll need a FICO score of 640 or higher to qualify.
You can check your credit score free with online tools, like Annual Credit Report. Checking your credit score regularly is a good idea regardless of whether you plan to buy a home. It can help you identify any potential red flags in your report that could prevent you from qualifying for a loan.
Chenoa Fund has income limits to ensure that the program is only used by those who genuinely need it. These income limits vary from county to county, based on each area's median income level. Generally, your household income must be at or below 115 percent of the median income level for the county where you're looking to purchase a home.
In Jefferson County, the median income level is $49,081. Your household income can be no more than $56,597 if you're looking to qualify for Chenoa Fund assistance.
First-Time Homebuyer Status
You must be a first-time homebuyer to qualify for Chenoa Fund assistance. While this may seem a straightforward requirement, there are a few different ways you can qualify as a first-time homebuyer.
For example, you may be considered a first-time homebuyer if you haven't owned a home in the past three years. Alternatively, you may qualify as a first-time homebuyer if you're a single parent who has only owned a home with a former spouse while married.
Debt to Income Ratio (DTI)
DTI refers to the percentage of your monthly income that goes towards debt repayments. This includes your mortgage, car loan, student loans, credit card payments, and any other recurring monthly debts you may have.
Ideally, you want to keep your DTI ratio below 50 percent. If your DTI ratio is too high, try working on paying down some of your debts before you apply for a mortgage.
Another eligibility requirement that Chenoa Fund has in place is the occupancy requirement. This means you must live in the home you're purchasing as your primary residence.
You can't purchase a home through Chenoa Fund to use it as a rental property or secondary vacation home. Doing so would violate program guidelines and could result in severe penalties, including repayment of the entire down payment assistance amount.
Why Should You Apply for Chenoa Fund Down Payment Assistance?
There's no shortage of down payment assistance programs, so why should you consider Chenoa Fund? Here are a few reasons:
You Get to Enjoy Zero Percent Interest Rate
One of the most significant advantages of Chenoa Fund is that it offers a zero percent interest rate. That means you don't have to worry about paying interest on your down payment assistance loan.
This can save you a lot of money in the long run, especially if you plan on staying in your home for many years.
No Prepayment Penalties
Chenoa Fund also doesn't have any prepayment penalties. You don't have to worry about paying the penalty if you sell or refinance your home before the five-year recapture period is up. You would only be responsible for repaying your down payment assistance amount.
This contrasts with other down payment assistance programs, which often penalize borrowers for selling or refinancing their homes before a certain period has elapsed.
You May Be Eligible for Chenoa Fund's Forgivable Second Mortgage
If you're a first-time homebuyer, you may be eligible for Chenoa Fund's "Forgivable Second" mortgage.
This second mortgage doesn't have to be repaid as long as you meet the provided forgiveness requirements. For instance, your loan may be forgiven if you make 36 consecutive timely mortgage payments.
You May Be Able to Get More Than One Type of Chenoa Fund Loan
If you're looking for even more down payment assistance, Chenoa Fund offers several different loan programs for which you may be eligible.
In addition to the Chenoa Fund Down Payment Assistance Program, there are the Chenoa Fund Mortgage Credit Certificate Program and the Chenoa Fund Veterans' Downpayment Assistance Program.
Each program has its requirements and guidelines, so be sure to research and see if you qualify. But if you do, getting more than one type of Chenoa Fund loan may be possible, which could help with your down payment and closing costs.
How to Apply for Chenoa Fund Down Payment Assistance
If you think you meet Chenoa Fund's eligibility requirements, the next step is to find an approved lender who can help you apply for the program. Here's a step-by-step guide that shows you the steps to follow to help you through the process:
Find an Approved Chenoa Fund Lender
The first thing you need to do is find a Chenoa Fund-approved lender in your area. You can search for approved lenders on the Chenoa Fund website.
Once you've found a few potential lenders, you must compare their terms and conditions to see which one is the best fit for you. Some things you may want to take into consideration include interest rates, fees, and customer service.
Get Pre-Approved for a Mortgage
The next step is to get pre-approved for a mortgage through your chosen lender. This will give you a better idea of how much home you can afford and what kind of interest rate you'll be looking at.
Getting pre-approved for a mortgage is a relatively simple process. Your lender will pull your credit report and look at your income, debts, and assets. Based on this information, they'll give you a letter stating how much they're willing to lend you.
Find a Chenoa Fund-Approved Home
Now it's time to start shopping for Chenoa Fund-approved homes in your area. Chenoa Fund has strict guidelines regarding the types of homes they'll approve for down payment assistance, so it's important to only look at homes that meet their criteria.
Chenoa Fund takes into consideration when approving homes, including the home's location, condition, and value. Note that finding an eligible property isn't always easy. You may want to consider working with a Chenoa Fund-approved real estate agent.
Make an Offer on a Chenoa Fund-Approved Home
Once you've found a Chenoa Fund-approved home that you're interested in, it's time to make an offer. When making your offer, include the Chenoa Fund down payment assistance program as a financing contingency.
Your offer is contingent upon your being approved for the Chenoa Fund program. If your offer is accepted, the next step is to apply for Chenoa Fund down payment assistance.
Apply for Chenoa Fund Down Payment Assistance
The next step is to apply for Chenoa Fund down payment assistance officially. The application process will vary depending on your lender, but you can typically expect to complete a Chenoa Fund-specific application.
At this stage, the lender may ask you to provide additional documentation, such as proof of income or assets. Once you've submitted your application and supporting documentation, the lender will review everything to see if you're eligible for the program.
Complete a Homebuyer Education Course
All Chenoa Fund borrowers must complete an online homebuyer education course before closing their loan. This course will teach you everything you need to know about home buying, from start to finish.
Not only will this help ensure that you're fully prepared to become a homeowner, but it will also help you avoid any pitfalls that could cause problems down the road.
The good news is that the course is available online so you can complete it at your own pace. Besides, it doesn't take too long to complete – most people can finish it in just a couple of hours.
Get a Chenoa Fund-Approved Appraisal
If you're approved for Chenoa Fund down payment assistance, the next step is to have your home appraised. Chenoa Fund requires all homes they assist with to be appraised by an FHA-approved appraiser.
The appraisal aims to ensure that the home is worth at least as much as the down payment assistance. If the appraisal comes back lower than the down payment assistance amount, you may need to find additional financing.
Attend Your Closing
Once your appraisal has been completed and everything else has been taken care of, the next step is to attend your closing. This is where you'll sign all the necessary paperwork and officially become the owner of your new home.
Top 5 Restaurants near Jefferson County, Florida to Enjoy an Acai Bowl
Now that you're through the Chenoa Fund down payment assistance program application process and the funds have been received.
And what better way to do that than by enjoying an Acai Bowl? Thankfully, Jefferson County is home to some great restaurants serving delicious acai bowls.
Here are some spots worth checking out:
- The Good Berry Açaí Bowls
- Kwench Juice Cafe
- Nekter Juice Bar
- GreenWise Market
- Vale Food Co
Apply Today and Enjoy Life in Jefferson County, Florida!
Owning a home in Jefferson County, Florida, is a huge milestone. The great news is that you don't need to worry about coming up with a sizeable down payment, thanks to Chenoa Fund.
This program provides down payment assistance to qualifying homebuyers, making it easier to achieve your dream homeownership. And with its numerous advantages, the Chenoa Fund DPA is worth considering.
Visit a qualifying lender today and start the application process.