(Mar 26, 2023)
Most lenders accept funds from down payment programs. Even some DPA funds may be substantial enough to cover closing costs. You may be eligible for an absolute grant or a low-or zero-interest second mortgage to cover your down payment requirement, provided you meet specific criteria.
In contrast to DPA loans, which must be repaid with your principal mortgage, DPA grants have no repayment requirements. Deferred loans are different mortgages whose payments are postponed and become payable upon sale, relocation, or refinancing.
On the other hand, forgivable loans are additional mortgages with the option of being canceled or deferred over a specific term, demanding payments only if the borrower has immediate plans to move, refinance, sell or convert to a rental property.
There are numerous DPA programs available in Orange County, Florida. The prerequisites for each program's participation differ. Most of them are for first-time purchasers trying to acquire a primary residence and demand a high FICO score.
But not all schemes follow the same framework. Here's a look at one of Orange County's DPA programs that's easy to qualify for.
About the Chenoa Fund?
The Chenoa Fund is a countrywide down payment assistance program designed to make homeownership more affordable for all. It's a product of the CBC Mortgage Agency, a government-chartered agency.
Through loans for down payments and closing costs, the fund attempts to help people afford homes. But if you've already saved, you can apply for the Chenoa fund DPA and leave your savings intact for future projects (repairs and upgrades).
First-time purchasers and those with moderate to low incomes will benefit the most from this fund. The fund is not restricted to these groups of people, though. Any homebuyer who meets the requirements is qualified.
How much down payment assistance is offered?
The Chenoa Fund assists with down payments of up to 5% of the appraised home price. This support comes from additional mortgage loan packages that can be forgiven, repayable, or forgiven.
Both traditional Fannie Mae house loans and FHA mortgages may be used in conjunction with this fund. However, the DPA program for Fannie Mae conventional mortgages has been suspended indefinitely.
The Chenoa Fund's down payment assistance program demands that borrowers work with a reputable mortgage provider. That means you must choose a lender from a list of program-approved mortgage providers.
But that's great because now you can get your primary and secondary mortgage (DPA) from the same loan provider. The lenders have underwriting authority meaning loan qualification and processing are simple and fast.
Borrowers who'd like to preserve their DPA funds for unforeseen costs, home repairs, or emergencies can benefit from this program. Savings can be kept for future use while using the program funds for a down payment.
Moreover, receivers of this aid may combine it with additional benefits such as seller concessions toward the fulfillment of closing costs.
What loan programs does the Chenoa Fund work with?
FHA loans are federally insured mortgages offered to those with low incomes and poor credit profiles. Basically, you can still qualify for an FHA loan if you've been turned down for conventional home loans because of heavy debt burdens, poor credit histories, foreclosures, or prior bankruptcies. FHA borrowers can take advantage of the Chenoa Fund DPA.
If the lender approves your application for an FHA loan, they will pay about 96.5% of the property's appraised value. Therefore, the minimal down payment needed will be only 3.5 percent. Thankfully, the Chenoa Fund provides almost the same amount as forgivable or repayable loans. That means the closing fees are the only expenses you will be responsible for.
Three unique FHA loan-compatible programs are available from The Chenoa Fund:
Chenoa Fund Rate Advantage program
The Rate Advantage package is the most popular and lucrative Chenoa Fund product. Homebuyers can use this package to lock in a competitive interest rate on their principal mortgage and a 3.5 % loan to assist with the down payment.
The program requires a credit score of 640 or above. But the borrower's DTI may not exceed 50%. The maximum income threshold for this program is 135% of the county's median income. Usually, the interest rate is 8%. The down payment money must be returned within 10 years.
Chenoa Fund, DPA Edge
This forgivable loan serves as a "soft second" mortgage. That implies you might not be required to repay it. It's a zero-interest second mortgage with no monthly payment requirements. It requires a FICO score of 620 or higher and a DTI not exceeding 45%. It's a well-liked solution among low-income purchasers.
You only need to pay your principal mortgage on schedule (every 30 days). If you satisfy the forgiveness standard, the second mortgage may be forgiven after three years (36 months). However, if you delay making payments, the loan forgiveness window resets, giving you another chance to work towards it.
The income limit for this program is 115% of the county's median income, which is where you plan to live.
Chenoa Fund Edge Repayable Second Product
This product is offered as a 30-year loan with a 5% interest rate or a 10-year loan with no interest. It doesn't have an income limit requirement. However, your DTI must not exceed 45%, and your FICO must be 620+.
Is the Chenoa Fund compatible with traditional mortgages?
Unfortunately, the Chenoa Fund DPA product for conventional mortgages is on permanent hold. However, when it comes back, it may resume as before or with some modifications.
It used to offer DPA equal to 3% of the property's appraised price. It was compatible with Fannie Mae's primary 97% LTV mortgage and the HomeReady Mortgage.
Chenoa Fund guidelines
FHA applicants can choose between forgivable and repayable second mortgage DPA solutions. They all require a FICO score of 620 or better.
The repayable second mortgage option is available as a 10-year loan with an interest rate of 2% higher than your primary mortgage. It requires monthly payments.
On the other hand, the forgivable second mortgage option is available as a 30-year, zero-interest loan with no monthly payment obligations. But you must make your principal mortgage payments on time (usually every 30 days).
The DPA amount dictates when the second mortgage can be forgiven, as explained below:
3.5% DPA
The second loan can be canceled if you pay your principal mortgage on time, typically every 30 days for three years (36 months). However, if you don't fulfill this requirement, the loan forgiveness window resets, allowing you another chance to work towards it.
Therefore, you have the whole 30 years to work towards loan forgiveness. But if you fail to meet the standard for forgiveness before the loan term expires, you can still be relieved of the debt obligation.
5% DPA
The second loan can be canceled after 120 consecutive on-time payments on the principal mortgage. If you miss more than 60 days of payments, the loan forgiveness provision is struck out. That means you end up with a 30-year, 0% interest second loan. Without a monthly payment requirement, of course.
Both second mortgage loan options could still be forgiven if the standard for forgiveness hasn't been met by the loan's expiry time. However, any outstanding payments will be due in total if you decide to sell, refinance, or transfer property title before your loan can be forgiven.
Who's eligible for down payment assistance from the Chenoa Fund?
If you've qualified for an FHA mortgage and want to apply for DPA from the Chenoa Fund, you'll need the following:
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A credit rating of 620+ or
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A DTI of 45 percent or less
- Meet various income requirements depending on the DPA product you are seeking.
To qualify for the Chenoa Fund DPA for conventional mortgages (when it returns), you must have the following:
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A FICO score of 640+ or
- A DTI of 50% or less.
Is there an income cap for the Chenoa Fund's DPA programs?
No income restrictions exist on the Chenoa Fund assistance for conventional loan holders. However, this doesn't imply that income is not significant. Before approving you for a home loan, lenders may still require evidence that you can afford the regular mortgage payments based on the loan package you are seeking.
However, once you've qualified for a conventional mortgage and met the Chenoa Fund guidelines, you can apply for the DPA (if it's in operation).
Meanwhile, the income ceiling for the Chenoa Fund DPA Edge program for FHA borrowers is 115% of the county median income. On the other hand, the Chenoa Fund Advantage Rate DPA income ceiling is 135% of the county's median income.
What further services does the Chenoa Fund program offer?
The Chenoa Fund offers pre-and post-purchase homebuyer training to support successful homeownership. The Chenoa Fund Borrower Success education program offers various counseling services, routine check-ins every month, and assistance with various concerns to help first-time buyers navigate through their first year of homeownership. The assistance is provided by HUD-approved counselors who are competent and kind.
The Chenoa Fund is also wholly self-sufficient and runs without taxpayers' help. It brings in enough money to fund both the continued operations of the DPA programs and other homeownership-related programs.
The fund also partners with other programs to promote homeownership among low-income earners and minorities. For example, the homeownership rate gap between whites and minorities is continually widening. To address this issue, the CBCMA has collaborated with initiatives like the UHOUSI to promote and expand opportunities to increase homeownership among African American community members.
Benefits of utilizing this fund and how to apply
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It offers up to 5% DPA.
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It's compatible with FHA and conventional mortgages. It is accessible to all homeowners as long as they match the eligibility standards (though DPA for conventional loans is on hold for now).
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An expedited approval process.
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It has initiatives oriented toward minorities that help underprivileged communities learn about building wealth via stable homeownership; post-purchase counseling is available for 18 months.
- Available as repayable as well as forgivable loans.
Many borrowers appreciate dealing with a single loan provider. That's what the Chenoa Fund ensures. It simplifies the application process and allows borrowers to obtain both primary mortgage and DPA assistance from the same lender.
You can access the Chenoa Fund through program-approved lenders. To obtain a list of approved lenders, email the program at info@chenoafund.org or call 866-563-3507 to speak with an expert.
Is Orange County a great place to live in Florida?
Orange County, situated in East Central Florida, is best known for Orlando, its largest city, and serves as the county seat. The county was first established in 1845 under Mosquito County and was later renamed after the fruit it produces the most. There are 1,003 square miles in the county, with roughly 1,225,267 residents. It comprises 13 cities, with Orlando, Winter Park, Oakland, and Ocoee being the best ones to live in.
Roughly 200 public schools, 170 private schools, and numerous prestigious institutions make up this county's well-regarded educational system. With more than 160 occupations and jobs available, the unemployment rate is below the national and state average.
There are several natural parks, theme parks, and shopping centers to explore, including Blue Spring State Park in Florida, Canaveral National Seashore, Universal Orlando Resort, and Walt Disney World Resort. The Boeing Company, UC Irvine, Bank of America, Walmart Stores, and Florida Hospital are among the largest employers. The crime rate is also low.
There are also many restaurant options with delicious healthy cuisine for residents who enjoy a wide selection of menu items. For instance, here's a look at the best locations to go if you're craving a thick smoothie with mouth-watering toppings.
The top places in Orange County, Florida to get an Acai bowl includes:
GoJuice
GoJuice Kiosk in North Orange serves fresh, organic, healthy ingredients. Everything is made fresh to order, with no added artificial flavors or sweeteners.
You have a variety of acai bowls, juice, and smoothie options. This is the only kiosk on the US East Coast with Laird Superfood Functional Coffee.
Equilibre
Equilibre is a smoothie and juice bar in Orlando, Florida. They provide acai bowls, sandwiches, coffee, salads, smoothies, juices, fruit, and wholesome desserts. Visit the location if you're looking for freshly prepared fruit drinks, juices, and nutritious bowls.
Vitality Bowls Dr. Phillips
This is a fantastic spot for acai bowls because they have a large selection, but it's also an excellent place if you're looking for anything else healthy. You can order whatever you desire because they've many ingredients.
Frutta Bowls Winter Park
This is the ideal location for a delicious acai bowl, particularly if you're looking for one with Nutella and peanut butter. They also serve kale and pitaya bowls.
You are welcome to take selfies against the restaurant's adorable chalkboard wall. It's a pretty new cafe with a lovely atmosphere.
Purple Ocean Superfood Bar
This cute food bar at 1110 N Mills Ave in Orlando serves some of the best acai bowls in town. Many customers recommend the Crash Boat for peanut butter lovers and the Jobos Bowl for Nutella lovers.
Once you get to the bowls' bottom, you'll appreciate the coconut oil and granola combination they contain. Additionally, cold brew coffee and smoothies are available here.
Is the Chenoa Fund DPA program a wise decision?
Indeed, the Chenoa Fund is a beautiful DPA initiative. It provides DPA in the form of a 30-year forgivable loan with a 0% interest rate or a repayable loan with a 10-year duration and an interest rate 2% higher than the primary mortgage rate. While the latter demands monthly payments, the former does not. The amount of the DPA determines forgiveness.
But it's best to remember that there are other DPA initiatives besides the Chenoa Fund. There's no benefit in choosing a Chenoa Fund 10-year repayable DPA loan when you qualify for an outright DPA grant or forgivable loan from another program.
Depending on your characteristics as a homebuyer, several specialized DPA programs are available in Orange County, Florida. You need to know where to look. Start by having a conversation with your loan officer.
It's possible that you may not find a generous DPA program like the Chenoa Fund. While many programs may offer outright grants or forgivable loans, they might not be sizable enough to cover your down payment requirement, typically 3% of the appraised price.
On the other hand, the Chenoa Fund offers up to 5% in DPA. So, even if the loan you get from the program might not be forgivable, it might still be your best option. However, that doesn't imply you shouldn't conduct research. Consider your options by looking at other DPA programs in the county.
(Mar 26, 2023)
