(Mar 27, 2023)
With employment uncertainty and constantly changing economic environments, many homebuyers are forced to make the hard decision to dig into their savings.
While the mortgage industry has always devised ways to help Americans achieve their homeownership dreams, tackling down payment requirements hasn't always been easy.
For instance, government-backed loans, such as FHA, allow homebuyers to pay the minimum down payment with their gift funds. However, this isn't enough for many low to moderate-income families.
Fortunately, if you want to buy a home in Sarasota County, you can apply for Down Payment Assistance (DPA) programs, which have been extremely useful in getting help to families that need it the most.
The Chenoa Fund, for instance, is a DPA program funded by the CBC Mortgage that enables homebuyers to use an FHA-insured mortgage by giving eligible applicants 3.5% or 5% of the buying price to settle the down payment.
Intrigued? This financial assistance program could be just what you're looking for. This post will explain all you need to know about the Chenoa Fund and how to qualify for it in Sarasota County.
What is the Chenoa Fund?
The Chenoa Fund is an affordable DPA program managed by a federally chartered governmental entity known as the CBC Mortgage Agency (CBCMA). This entity specializes in offering assistance under FHA and conventional guidelines.
Its primary focus is increasing affordable and sustainable homeownership, especially for creditworthy low to moderate-income borrowers.
CBCMA partners with highly regarded lenders on a correspondent basis to offer loans for eligible homebuyers. It boasts several program alternatives that come with DPA in the form of 2nd mortgages.
By helping responsible borrowers to overcome the biggest hurdle to home ownership (down payment), CBCMA plays a vital role in creating healthy communities by easing the balance between homeownership and other modes of housing. That way, you can now start building equity for your future instead of waiting for ages to save a down payment.
How Much Down Payment Assistance Can One Get?
As mentioned earlier, Chenoa Fund is a vital down payment assistance (DPA) program for homebuyers who lack enough funds to pay down payment and closing costs.
This assistance comes from a forgivable or repayable 2nd mortgage loan product. It offers the assistance of up to 3.5% or 5% of your home price, depending on your loan program.
The Chenoa Fund requires you to work with approved "correspondent" lenders. So, if you want to benefit from the fund, there's a special list of lenders from which you must choose. Lucky for you, these lenders are given delegated underwriting authority, making it easier for you to use Chenoa Fund programs.
Moreover, homebuyers who receive this down payment assistance can combine it with seller concessions to aid with closing costs. This means you'll not have to drain your bank account to buy a home but instead receive assistance to help keep your account in good standing for future home improvements or emergencies.
Who Can Qualify for Chenoa Fund Program?
The FHA first mortgage strictly follows FHA guidelines. On the other hand, the second mortgage terms for DPA are based on your qualifying income and HUD's AMI (Area Median Income) requirements.
Some of the basic requirements include:
- A credit score of 620 or higher.
- You must meet eligibility requirements for FHA loans.
- A DTI of 45% or lower.
- If you want your loan to be forgiven, you must earn less than 115% of your county's median income.
Because you'll not be placing any money down, you'll be required to pay mortgage insurance. And depending on your FICO score, your lender may not require homebuyer education.
How the Chenoa Fund Works With FHA Loans
Are you discouraged by the staggering costs associated with purchasing a new home? The Chenoa Fund program is a down payment assistance program that makes it easier for you to secure home loans with less than 10% down.
While the Chenoa Fund is not directly affiliated with the FHA (Federal Housing Administration), you can use it in conjunction with FHA loans. DPA paired with an FHA loan has the option of 5% or 3.5% of the appraised value or purchase price.
The good thing about FHA loans is that they come with only 3.5% of the buying price down. This means that by taking a Chenoa Fund loan, you'll be able to cover your entire down payment.
This unconditional loan option has three different programs that can work with FHA mortgage loans:
Chenoa Fund Rate Advantage Program
The Rate Advantage Program is the most successful Chenoa Fund product. It allows you to lock in your first mortgage using competitive market rates and a 3.5% down payment assistance loan.
This program boasts a minimum credit score requirement of 640 and a maximum DTI (debt-to-income ratio) requirement of 50%. Its income limit is 135% of your county's median income level. For this program, you'll repay the down payment assistance over 10 years at an 8% interest rate.
Chenoa Fund DPA Edge Program
The Chenoa Fund DPA Edge Program is a popular option among lower-income homebuyers because it offers a 30-year term to buyers, with a 0% rate on a forgivable second mortgage. This means you typically don't have to pay your loan back.
To qualify, you must have a minimum credit score of 620 and a DTI of 45% or less. You must also have a qualifying income equal to or less than 115% of your county's median income.
There are also specific qualifications for how this mortgage is terminated. Once you've made 36 consecutive payments on your primary mortgage, the Chenoa Fund loan will be forgiven.
However, this will only happen if you make on-time payments (you shouldn't be more than 30 days late). Borrowers who make late payments can still have the loan forgiven when the 36-month period resets.
Chenoa Fund Edge Repayable Second Program
The Edge Repayable Second Program is the Chenoa Fund product with the fewest income restrictions. In fact, with this option, there are no income limits for one to qualify for financial assistance. You'll need a minimum FICO score of 620 and a DTI of 45%.
This program comes with two different terms - one option is a 10-year loan at 0% interest, and the other term is a 30-year repayable mortgage loan at 5% interest.
How the Chenoa Fund Works With Conventional Loans
Looking for loan alternatives besides government-backed mortgages, such as FHA loans? The Chenoa Fund offers a down payment to homebuyers eligible for a 97% LTV conventional mortgage under the FNMA's HomeReady Program.
This program is a 3.5% 2nd mortgage, which you can use to cover closing costs (0.5%) and down payment requirement (3%).
DPA on conventional loans is specially meant for low-to-moderate homebuyers, with expanded eligibility for houses in low-income communities.
However, buyers who don't fit the HomeReady criteria and lack enough resources to cover larger down payments may still qualify for a standard conventional 97% LTV mortgage and receive assistance for the closing costs and down payment.
There are no income limits under this program. To qualify, the criteria include:
- A minimum FICO score of 640.
- The home must be a single unit.
- You must pay mortgage insurance.
- At least one borrower should be a first-time buyer.
It's worth noting that the Chenoa Fund program for conventional mortgages has been suspended until further notice. So, you may want to focus on working with the various programs under the FHA loan.
Benefits of Using this Fund
Different loan products come with benefits, and the Chenoa Fund is no exception. It comes with a unique set of perks, including:
- Flexible credit score approvals.
- Homebuyer education is not required.
- Not just meant for first-time buyers.
Aside from the benefits mentioned above, Chenoa Fund offers pre- and post-purchase counseling to help guarantee borrower success. First-time homebuyers can take advantage of this program during their first year of homeownership.
Regular monthly check-ins ensure all your questions, challenges, and need for assistance are met. Plus, the fund is self-sufficient and doesn't depend on government incentives. This means it produces enough funds to continue running and expanding its program and other attempts to improve homeownership.
How to Apply for a Chenoa Fund in Sarasota County, Florida
There are many reasons why future homebuyers in Florida are looking into closing costs and down payment assistance programs. With the recent rise in rates and home prices, many borrowers need DPA to realize their homeownership dreams. Many new homebuyers interested in financial assistance face the same problem - accessing it.
Here's how you can apply for Chenoa Funds in Sarasota County.
Manage Credit and Debt Wisely
Before applying for a Chenoa Fund program, you must ensure that your credit score is on point. Remember, all DPA programs with a statewide footprint come with maximum DTI ratios and minimum required FICO scores that may be more strict than what a home loan alone may need.
Some programs, such as the Chenoa Fund, accept FICO scores as low as 600, while others have minimum requirements as high as 640. While maintaining a good credit score and avoiding debt is generally applicable, if you're searching for a home loan, you may find it especially helpful to start repaying your debts and improving your credit score.
Work With the Right Lenders
Just because you're eligible for a home loan doesn't mean you'll be able to request DPA programs. As a rule of thumb, borrowers can't apply for these programs directly through organizations that offer them. Instead, you can access them through lenders that have applied to provide down payment assistance.
Chenoa Funds, for instance, are offered through correspondent lenders. In simple terms, you can apply for these loans through Chenoa Fund-approved lenders. Don't fear asking your lender about the DPA options they offer and how these programs can change the terms of your loan.
Time It Right
Applying for a home loan usually takes time and in some instances, applying for DPA adds to that. Where possible, try giving yourself some lead time on the closing date to enable you to manage any possible delays.
When researching the down payment assistance programs available in Sarasota County, ask your client how much time it will take for you to learn if you qualify for the program and whether it will delay your closing date.
The Top 5 Places to Get an Acai Bowl in Sarasota County, Florida
Sarasota County, FL, is blessed with terrific dining options, from fresh seafood to steakhouses and salads. There are some fantastic places to eat in Venice, Siesta Key, or Downtown Sarasota.
If you're looking to eat healthy and delicious meals, it's time you try the best acai bowls in this beautiful county. Acai is one of the best health-conscious meals in Sarasota, with nutritious fruits, veggies, and toppings.
Here are some of the best healthy restaurants in Sarasota County that are a fantastic treat for your taste buds.
Island Organics Smoothie & Juice Bar
Island Organics Smoothie & Juice Bar has been the leading health care service in Venice and the surrounding areas since 2014. Aside from breakfast and lunch, they offer smoothies, pastries, juices, wraps, immunity shots, and much more.
All their juices are carefully made with a hydraulic cold press to keep them raw, with all the nutrients and enzymes intact. You'll also find various options for gluten-free and vegan diets.
Village Cafe
Established in 1995, the village Café is a favorite stop for visitors and locals alike. It is well-known for its Siesta essential staple and friendly team-oriented staff who serve filling portions of tasty breakfast and lunch dishes to satisfy every appetite.
Village Café has a large outdoor dining area. Their menu boasts a wide range of mouthwatering delicacies, including french toast, waffles, sandwiches, frittatas, and healthy choices like oatmeal and Acai Bowls. There's also a kid's menu and daily specials that will leave you yearning for more!
Sun Garden Cafe
Sun Garden is an award-winning breakfast and lunch restaurant in Siesta Key, Sarasota. Everything here is fantastic, from the welcoming outside seating and music to the family-friendly staff and professional services.
Besides their healthy diet, you may want to try their white egg omelet with goat cheese, real vine-ripened tomatoes, and cilantro. Kick this up with their homemade salsa and guacamole, and you're sure to come back for more.
Whether looking for healthy options, strong traditions, or something off the beaten path, you're sure to find paradise in this family-friendly garden restaurant.
Green Zebra Cafe
Situated in the heart of Downtown Sarasota, this Contemporary American cafe offers delicious food, a warm, casual atmosphere, and exceptional services. Focusing on pure and locally-sourced ingredients, their brunch and dinner menus are uniquely crafted to reflect their customers' special dietary requirements.
The regular brunch menu in this cafe highlights a long list of local delicacies, such as Lavender-Blueberry pancakes, Italian Benedict, Omelets Your Way, and their famous Raw Pancake. On the other hand, the dinner menu features plant-based cuisine and dishes with sustainable seafood.
In addition to Acai Bowls, other popular dishes in Green Zebra Cafe include mouthwatering gluten-free, vegan cheesecake, Raw Vegan Lasagna, and Salt-roasted Golden Beets.
Clean Juice Sarasota
Founded by the Gordon Family in 2017, Clean Juice Sarasota makes it easy to choose organic meals and get healthy products. Just about all the ingredients here are organic. And if they use inorganic ingredients by chance, they always list it in plain sight for everyone to see.
Aside from Acai Bowls, Clean Juice Sarasota offers cold-pressed juice, shots, smoothies, Superfood bowls, and small bites like toasts and oat bowls. This is the place to be if you're into organic juices and healthy meals.
Move to Sarasota County, Florida Today
Located in Southwest Central Florida, Sarasota County is one of the best regions to raise your family. And this isn't so just because this place boasts some of the best kid-friendly spots like restaurants and natural aquariums, but it's also a gorgeous and peaceful place with all the amenities you could ever ask for.
If you're ready to live in Sarasota County and qualify for the Chenoa Fund, apply without hesitation and enjoy all the benefits that come with this program, including flexible credit score approvals and peace of mind.
(Mar 27, 2023)
