(Mar 20, 2023)
With many lenders demanding more than 20% as a down payment, raising the initial amount remains an issue for most homebuyers. Even though some lenders require a lower down payment, they charge higher interest rates and insurance premiums on all loans.
Fortunately, with down payment assistance programs like the Chenoa Fund, you don't have to worry about being short on funds. These programs provide financial aid of up to 3.5% of the home's value, which could cover the entire down payment when purchasing with an FHA loan. You can also use the Chenoa Fund to pay your closing costs.
The only issue is that not all aspiring homeowners are eligible for the Chenoa Fund down payment assistance program. You must meet particular requirements to qualify for the program.
This post explains everything you need to know about the Chenoa Fund and whether it is the right option for you. Keep reading to find out more.
What is the Chenoa Fund?
The Chenoa Fund is a down payment assistance program for low-to-moderate income borrowers aspiring to buy a home. Its primary objective is to make homeownership more affordable, particularly for first-time homebuyers.
The CBC Mortgage Agency, a federally-chartered FHA-approved government entity, administers the fund. The agency partners with credible lenders to offer down payment assistance to eligible homebuyers.
The Chenoa Fund is available nationwide to applicants who might be eligible for home financing but cannot accumulate the required down payment. The program has helped thousands of qualified borrowers buy homes in various parts of the country.
The program works under FHA guidelines, meaning you can only be eligible for financial assistance if you qualify for an FHA loan and meet CBC's minimum FICO score requirements.
How Does the Chenoa Fund Work?
The Chenoa Fund works under FHA guidelines to provide eligible borrowers with down payment assistance. The program allows you to purchase your dream home without putting money down. You only need to qualify for an FHA loan and meet the required FICO score to secure funding.
Many homebuyers manage to save for a down payment for years. However, the ever-changing home prices and cost of living can make saving for the down payment an arduous task. According to various surveys, over 53% of renters continue to rent because they cannot afford a down payment. Most aspiring buyers give up along the way, opting to rent rather than pursue the homeownership route.
The Chenoa Fund is here to help eligible borrowers break into homeownership. This down payment assistance program ensures you don't have to save for several years to raise the required down payment amount. You can start building equity for your future rather than wait for years while home prices continue to soar.
This assistance program may come as a 10-year repayable loan with fixed interest or a forgivable loan with a 30-year term. The repayable DPA loan has a 2% interest rate and requires monthly payments.
The terms for the forgivable loan depend on the DPA amount. You must meet certain conditions to turn your loan into a grant.
The lender can defer or forgive your loan if you make 36 consecutive, prompt payments on your first FHA mortgage. A missed payment resets the timer, meaning you have to start over with the consecutive payments to make your DPA loan forgivable. The 3.5% forgivable DPA loan does not require monthly payments and has 0% interest.
The 5% forgivable DPA loan is also interest-free and offers a 30-year term. It is forgivable after 120 consecutive payments on your first FHA mortgage.
Unlike the 3.5% down payment assistance, the 5% DPA loan has only one forgiveness opportunity, meaning any late remittances by 60 days or more will force the lender to terminate the forgiveness.
How Does the Chenoa Fund Work with FHA Loans?
The Chenoa Fund only works with FHA loans under FHA guidelines. Previously, you could apply for down payment assistance with conventional loans, but this is no longer the case after the CBC agency put it on hold.
The Chenoa Fund provides 3.5% or 5% down payment assistance on FHA loans, depending on your FICO credit score. Besides, you must qualify for an FHA loan to receive down payment assistance under the Chenoa Fund program.
While the 3.5% DPA loan covers the down payment only, the 5% DPA loan can help clear the down payment, prepaid items, and closing costs of your FHA loan. The 3.5% assistance amount leaves you to pay the closing costs out of your pocket.
The Chenoa Fund works with FHA loans under three different product offerings:
Chenoa Fund DPA Edge
The Chenoa Fund DPA Edge is down payment assistance for FHA mortgages in the form of a subordinate loan. You can use this soft second loan to clear the down payment and closing costs.
The loan is forgivable, meaning you don't have to pay it back so long as you meet the specified requirements for deferral. The lender expects you to pay your FHA mortgage promptly for 36 consecutive months for your DPA loan to become forgivable.
The minimum FICO score for the Chenoa Fund DPA Edge is 620 points, while the qualifying income requirement is equal to or less than 115% of your county's median income.
If your income exceeds 115% of your county's median income, consider applying for the Chenoa Fund Edge Repayable Second Product.
Chenoa Fund Rate Advantage Program
With the Chenoa Fund Rate Advantage Program, you may get 3.5% or 5% of the home's value as down payment assistance on your FHA mortgage. You can use the funds to cover the down payment, prepaid items, closing costs, or a combination of all three options.
Unlike the Chenoa Fund DPA Edge, the Rate Advantage Program has a higher FICO score requirement of 640 points. The qualifying income must not exceed 115% of your county's median income level. The program has a maximum debt-to-income ratio of 50% to compensate for the other somewhat stringent eligibility requirements.
The Chenoa Fund Rate Advantage program is popular since it allows borrowers to lock their first mortgage at competitive rates. The down payment assistance loan has a 10-year term.
Chenoa Fund Edge Repayable Second Product
The Chenoa Fund Edge Repayable Second Product is a DPA option without income limits. You can qualify for this loan even if your income exceeds 115% of your county's median income. The minimum credit score for the repayable second product is 620 points.
With this repayable second loan, you can choose between a 10-year term at 0% interest or a 30-year term at 5% interest.
Since this DPA loan is repayable, you will have a payment schedule for the first and second mortgages. You can pay off the second mortgage any time during the loan's duration without attracting a penalty for early payments.
Chenoa Fund Eligibility Requirements
Like any other loan, the Chenoa Fund Down Payment Assistance Program has several eligibility requirements. Applicants can obtain financing after meeting the minimum qualifications for the loan.
Here are the minimum eligibility requirements for the Chenoa Fund Down Payment Assistance program for FHA loans:
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A minimum credit score of 600 points.
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45-50% Debt-to-Income ratio.
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135% Area Median Income limit.
- Meet all eligibility requirements for an FHA loan.
Note - The Chenoa Fund DPA program is available countrywide except in New York.
How to Apply for the Chenoa Fund Down Payments Assistance Program
Applying for the Chenoa Fund down payment assistance program does not have to be complicated so long as you are eligible for an FHA loan.
The loan is available through accredited correspondent lenders. The CBC Mortgage Agency partners with credible lenders to offer down payment assistance to eligible homebuyers.
You can apply for the loan through these approved lenders without going through various intermediaries for a fast and straightforward process. You can contact the CBC agency for a list of accredited lenders in your area to begin the application process.
Benefits of the Chenoa Fund
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Up to 5% Assistance - The Chenoa Fund provides down payment assistance of up to 5%, depending on your FICO score. Most DPA programs offer borrowers around 3.5% of the home's value as down payment assistance, but the Chenoa Fund allows up to 5% of the purchasing price. You can use the funds to pay the down payment, prepaid items, and closing costs.
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Better Terms - Down payment assistance programs have better terms than traditional home financing options. With the Chenoa Fund, you only need to qualify for an FHA loan to get approved for assistance. Besides, most programs do not have insurance requirements, and lenders usually offer lower interest rates or no interest at all.
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Flexible Guidelines - The Chenoa Fund works under FHA guidelines, making it highly flexible. FHA loans do not have stringent eligibility requirements compared to traditional mortgages. Since it targets low-to-moderate income households, it is more accessible to qualify for down payment assistance via the Chenoa Fund. Lenders are more lenient when issuing funds through this program.
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Supports Underserved Communities - The Chenoa Fund targets underserved minority communities aspiring to become homeowners. Various surveys show that minorities usually face numerous hurdles breaking into homeownership since many don't have families that can help them raise funds for down payments. The Chenoa Fund makes it easy for these groups to secure financial assistance.
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Pre- and Post-Purchase Counselling - The Chenoa Fund is not just about providing down payment assistance to potential homebuyers. The program also ensures borrowers successfully pay all the associated house costs. The DPA program provides pre- and post-purchase homebuyer counseling to all applicants. Borrowers will learn the importance of making their payments promptly and how to build a budget and save funds for home repairs.
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Forgivable Loans - The Chenoa Fund has three different product offerings. Some assistance products under the program are forgivable loans, meaning you don't have to worry about paying them back. Besides, some loan options have no interest rates at all. However, you must meet certain conditions to make your loan forgivable.
- Savings and Equity - Taking out a Chenoa Fund loan can help you build equity and save money. You can use the Chenoa Fund to pay the down payment and associated costs, allowing you to use your savings for other essential matters. After all, you don't have to accumulate savings for an extended period to raise the minimum down payment.
Possible Drawbacks of the Chenoa Fund
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Tough Conditions for Forgivable Loans - The Chenoa Fund is available in repayable and forgivable terms. You must meet various stringent conditions to make your loan forgivable. Depending on the DAP amount, the lender requires you to pay for 36 or 120 consecutive months to convert your loan into a grant. Missing payments will reset your terms, meaning you have to start the consecutive payments afresh.
- Higher FICO score Requirement - The Chenoa Fund has a higher FICO score requirement than FHA loans. Even if you qualify for an FHA loan with a lower credit score of 580 points, you must improve your rating to at least 600 points to get down payment assistance. Some lenders may require a higher score of about 620 points for various Chenoa Fund products.
Top 5 Places to get an Acai Bowl in Leon County, Florida
Acai Bowl is a Brazilian dessert comprising frozen acai berries topped with bananas, guarana syrup, strawberries, chia seeds, coconut flakes, and granola. This whole-food snack is the epitome of eating healthy as it is rich in antioxidants.
It can help lower blood sugar, reduce inflammation, boost the immune system, and repair damaged cell tissue. Several restaurants in Leon County offer delicious acai bowls.
Here is a list of the top eateries to consider for healthy acai bowls in Leon County.
The Good Berry Acai Bowls
The Good Berry should be your first stop for refreshing acai bowls on a hot and humid afternoon in Tallahassee, Leon County. The restaurant is famous for its large bowls of acai with an assortment of toppings customized to stimulate your taste buds.
The restaurant has a cozy atmosphere, pleasant staff, and quick service for a fulfilling dining experience. You can sit inside or outside in the shaded seating area as you enjoy frozen acai berries. Working hours are from 11 am to 5:30 pm daily.
Vale Food Co
The Vale Food Co on 815 W Madison Street is another excellent destination for Acai bowls and smoothies. The restaurant offers tasty and flavorful frozen acai topped with maple pecan granola, honey, coconut flakes, and goji berries.
While acai bowls are the main highlight, Vale Food Co offers various meal plans to suit your dining preferences. You can order smoothies, shakes, snacks, toast, keto bowls, and beverages. The Earth Matters Bowl, comprising roasted broccoli, veggie quinoa, and vegan protein, is among the top-selling items on the menu.
Kwench Juice Café
The Kwench Juice Café is a top-rated cafeteria and juice shop that offers super yummy acai bowls, smoothies, juices, and healthy snacks. All menu items have no added sugar or artificial additives as the restaurant uses fresh, natural ingredients straight from the garden.
Popular acai and pitaya bowls include Seminole, rainbow, kewnch, and acailicious. The highlight of this café is that you can make your unique acai bowl with an endless list of base and toppings options.
Nekter Juice Bar
The Nekter Juice Bar is a local juice shop that offers fresh beverages, smoothies, acai bowls, and health-conscious snacks. All the menu items comprise natural, nutrient-rich ingredients to fit your dieting requirements. They get most ingredients from local vendors to ensure your order is as fresh and healthy as possible.
Besides the great food and acai bowls, the Nekter Juice Bar is famous for its clean dining area, excellent service, friendly staff, and cozy atmosphere. Being transparent about their ingredients makes the restaurant one of Leon county's top-rated juice bars for acai bowls.
AXIOS Lifestyle Spa
Winding up the list is the AXIOS lifestyle spa along 1122 Thomasville Road. Besides offering delicious acai bowls, smoothies, and juices, this spa provides exclusive massage treatments and salt therapy. You can enjoy a huge bowl of fresh acai immediately after a massage for a fulfilling and relaxing experience.
One of the most popular offerings at the AXIOS lifestyle spa is the chocolate acai bowl designed to gratify your sweet craving while remaining healthy. The spa opens daily from 9 am to 7 pm.
(Mar 20, 2023)
