(Mar 27, 2023)
As an affordable housing program offered by CBC Mortgage Agency, the Chenoa Fund is on a mission to transform the lives of homebuyers. It mainly serves low-to-moderate-income buyers and first-timers in the home market with down payment assistance loans. The program is also open to anyone that meets its eligibility requirements.
Though the Chenoa Fund has not been approved or reviewed by the FHA or HUD, its loan products can be used to raise the down payment amount required by FHA loans. If you'd like to explore ways this program can shape your homeownership journey in Okaloosa County, FL, here's what you should know.
How the Chenoa Fund Works
The CBC Mortgage Agency's core belief is that every American deserves the opportunity to enjoy affordable housing. Its mission is to help increase these opportunities for homebuyers with income and credit history but zero down payment savings. The CBC Mortgage Agency forms partnerships with reputable lenders to facilitate the Chenoa Fund.
As lower down payment and down payment assistance mortgages continue to gain popularity, the Chenoa Fund seeks to be at the frontline of these developments. It offers homebuyers a second mortgage that they can use to meet the minimum down payment requirement that FHA-backed loans require.
With this help, the program creates healthier communities in the housing market and improves the balance between homeownership and housing types.
The Chenoa Fund is highly appealing to those who recognize that homeownership is part of building wealth. The CBC Mortgage Agency's facilitator strictly adheres to FHA-specific loan guidelines to help borrowers get the most out of homeownership.
And to reduce default cases, the program offers pre-purchase homebuyer education and counseling to all borrowers in the first 18 months of their homeownership journey.
Perks that Come with Chenoa Fund DPA Program
You can turn to the Chenoa Fund for several other things besides down payment assistance. To be precise, you may consider signing up for pre and post-purchase counseling and education after qualifying for the loan. This educational incentive can guide you through your home purchase and give you deeper insights into the workings of home loans.
Through its HUD-approved counselors, the Chenoa Fund allows borrowers to raise concerns about the down payment assistance offerings if they have any. Once you give feedback during the check-ins, a professional counselor will be directed your way to help you figure out a solution to the challenge you are facing. You can also go back and review any lessons or insights you got from the counselors.
In terms of funding, the Chenoa Fund counts on the CBC mortgage agency as its official financer. There's no financial-related affiliation between the program and any government-sponsored mortgage program.
The Chenoa Fund Down Payment Assistance Products
Understanding the down payment assistance offered by the Chenoa Fund is key to helping you get the most out of the program. It also saves you from choosing a loan product that suits your financial situation.
Here's a breakdown of three loan products under the Chenoa Fund.
DPA for FHA Loans
The DPA for FHA Loans is a Chenoa Fund loan perfectly suited for FHA loans. You can use it to pay for the down payment, prepaid items, and closing costs on your FHA loan as a repayable 10-term loan or forgivable 30-year loan. You can turn to this loan if you want down payment assistance to 3.5 or 5 percent of the property's price.
However, lenders are always keen to ensure that you are already qualified for an FHA loan before agreeing to qualify you for this particular loan product. A credit score of 600 and proof that you satisfy the loan's minimal overlays are the basic eligibility requirements.
This loan product also allows you to lock in a rate on the second mortgage. In this case, you can come back later to take the loan without worrying about an abnormal increase in interest rates in the market.
The Chenoa Fund DPA Edge Repayable Second Product
With the DPA Edge Repayable Second Product, you need a credit score of at least 620. You are also spared from meeting your area's median income limit requirement under this loan product.
The DPA Edge Repayable Second Product is available as a repayable 10-year loan with zero interest rate or a repayable 5-year loan with a five percent interest rate. There's also an opportunity to clear the balance on this mortgage at your own pace.
DPA Edge
DPA Edge is similar to DPA Edge Repayable Second Product but slightly different. For instance, it requires you to have an income lower than 115 percent of your area's median income.
Program Guidelines
One thing that distinguishes the Chenoa Fund and other similar down payment assistance programs is its program guidelines. Under this program, the reach of the Chenoa Fund spreads across the country apart from New York. The loan products also offer interest rates in three forms, including 3, 3.5, and 5 percent.
The general rule is that mortgage lenders get to oversee underwriting, origination, credit review, and appraisal. They have the power to approve loans and help you get the home of your dreams.
If you intend to use the funds to pay down a two-unit property, the DPA for FHA loans should be your go-to solution. Consequently, it will not work with a property with three or more units.
How to Qualify for the Down Payment Assistance
One of the first things mortgage lenders checks when reviewing your application is your credit score. In particular, a credit score in the 600 to 620 range or higher can improve your chances of getting qualified. You also need a DTI (debt-to-income) ratio of 45 percent and below for the same.
As you go through the lender-specific eligibility requirements, you must understand that the Chenoa Fund is way more favorable than other down payment assistance programs. It is also more cost-effective compared to renting.
Once you are enrolled, you get the chance to purchase a home with a lighter financial burden since you will have already met the down payment requirement.
How Much Down Payment Amount Does the Program Offer?
You can get the minimum down payment amount from the Chenoa Fund is 3.5 percent of the property's price. Even more, depending on the down payment offering you choose, you get this amount as either a repayable or forgivable loan.
You can use the finances to pay for a down payment on a property you would like to finance with an FHA-insured loan. This won't work if you intend to finance the purchase of the property with a conventional Fannie Mae mortgage, which the Chenoa Fund no longer supports.
Even more, there's an opportunity of pairing the down payment assistance loan with seller concessions to clear the loan's closing costs. But for this to work, the seller concessions must adhere to the FHA-specific guidelines.
The Chenoa Fund DPA Program and FHA loans
One factor that makes the Chenoa Fund compatible with FHA loans is its minimum down payment amount, which is 3.5 percent of the property's price. This is the exact amount that FHA lenders require you to put down on a home before qualifying for a mortgage.
Along these lines, the Chenoa Fund loan products pair well with FHA loans.
DPA Edge
DPA Edge is down payment assistance from the Chenoa Fund program offered as a second mortgage to low-income borrowers looking to buy a home. You can get it as a forgivable loan (which means there won't be any requirement to pay it back) if you meet specific requirements.
The lender will require you to have a FICO score of 620, a DTI of 45 percent, and an income below 115 percent of the median income in your area. They might also agree to adjust the DTI requirement if your credit score is good.
On the loan forgivability part, you need to make loan payments for at least 36 months for the balance to be forgiven. And if you skip even a single payment, the lender will reset the forgivability timeline, and you will have to start making regular loan payments again for 36 months straight.
Rate Advantage
Rate Advantage is a hugely popular down payment offering from the Chenoa Fund that carries several benefits to borrowers. For starters, it allows you to lock in a rate on your loan and offers a down payment of 3.5 percent of the property's price.
Once you qualify, you get a loan with a 10-year term and an 8 percent rate. However, you have to meet the credit requirements (FICO score of 640) and DTI requirement (50 percent and below) to improve your chances of qualifying for a Rate Advantage loan. You also need an income that is less than 135 percent of your area's median income.
Edge Repayable Second Product
There are no income limits with the Edge Repayable Second Product from the Chenoa Fund. However, your FICO score needs to be 620, while your DTI needs to be 45 percent and below.
After qualifying, you will get the loan in the form of a 30-year repayable loan at an interest rate of 5 percent and a 10-year repayable loan with zero interest rate.
How to Apply for the Down Payment Assistance Program
Like other loans, you will need various documents to help with your application to the Chenoa Fund. But before you get to this point, you need to choose a reputable lender and ensure you can meet the eligibility criteria. Take time to familiarize yourself with the loan process to know what to expect.
Once you are ready to apply, gather all relevant pieces of information and documents that the lender may ask for. Fill out the application form and submit any supporting documents if necessary. Expect some back and forth from the lender, which will help confirm that the information or documents you provided are indeed yours.
The mortgage lender may approve you for the down payment assistance if your application meets the eligibility criteria. Once you are enrolled, getting the funds may take some time. You will now be ready to meet the down payment requirement on the FHA loan and realize your homeownership dream.
Be sure to carefully read the FAQ section on the Chenoa Fund website to clarify any issues regarding the loan application process.
Emailing the program facilitators at info@chenoafund.org or calling them on their landline (866-563-3507) for the same can also help.
Top 5 Places in Okaloosa County, Florida to Enjoy Acai Bowl
Okaloosa County is best known for its emerald green and white sands in the northwestern part of Florida. It's a great travel destination for many and a scenery-filled place.
If you want to sample acai bowls across Okaloosa County, Florida, here are some of the eateries you should check out.
Wave Ice Cream & Coffee (Destin, FL)
Wave Ice Cream and Coffee is a Destin-based locally-owned ice cream shop with sweat and healthy menu items.
It's a great place to sample their tasty Costa Rican coffee or enjoy flavors of their bubble tea infused with tapioca, surrounded by a culture-oriented atmosphere. The shop also serves acai bowls with fresh fruit for your taste buds.
Think Poké (Fort Walton Beach, FL)
As a Hawaiian restaurant in Fort Walton Beach, FL, Think Poke is known for its great acai bowls and exceptional customer service. You can try their signature thoroughly blended acai bowl or sample the smoothies and boba depending on what you feel like eating. They also allow you to customize your bowl options to your tastes.
Besides the bowls, you can also choose from meats like shrimp, tuna, and salmon. The topping options for meals are also great. Overall, Think Poke boasts healthy and delicious treats for groups of friends or families to enjoy.
Formula Fresh Superfood Bar (Destin, FL)
Formula Fresh Superfood Bar is an airy, white-washed eatery that serves acai bowls, smoothies, healthy grab-and-go food, and cold-pressed juices. You can also sample their specialty coffee drinks to try something new.
One great thing about their Acai bowls is that they are refreshing and tasty. Formula Fresh Superfood Bar is a great place to enjoy an acai bowl when visiting Destin, FL.
Kwench Juice Cafe (Destin, FL)
With a passion for vibrant health, happiness, and nutrition, Kwench Juice Cafe offers top-quality fresh drinks with excellent customer service. Their ingredients are fresh and organic and are perfect for a health-conscious foodie.
Kwench Juice Cafe also ranks among the top places to enjoy acai bowls in Destin, FL. The bowls are tastefully done and highly nutritious.
Sunset Bowls (Fort Walton Beach, FL)
Sunset Bowls is an eatery located in Fort Walton Beach, Florida, that serves smoothies, coffee, and bowls, among other meals. They boast a great atmosphere and excellent staff. Their acai bowls are delicious and fresh.
The restaurant has vegetarian and children-friendly options for some of their meals. You can customize the dishes to your preferences if you are on a strict diet. Overall, the eatery is welcoming to families with kids as well as groups of friends.
Summing up
It's incredible how the Chenoa Fund continues to impact the lives of Americans looking to realize their homeownership dreams with its favorable down payment assistance offerings.
The program has been of great help to several Floridians, especially amid a housing crisis and inflation coupled with high rates and strict eligibility requirements on mortgages.
Now is the time to explore what the Chenoa Fund and its down payment assistance offerings have in store for you when looking to buy a home in Okaloosa County, Florida.
(Mar 27, 2023)
