Chenoa Loan Program

The new loan program for First Time and Repeat Homebuyers is the Chenoa, No Down Payment Option. Through the Chenoa Fund program, borrowers can receive an FHA first mortgage with a forgivable or repayable second mortgage of 3.5 percent, which can be used towards their down payment. The Terms of the second mortgage are based on the borrower’s qualifying income and HUD’S AREA Median Income (AMI) requirements.

Option #1 is the Forgivable loan, as specified:

  • The borrower is eligible for a forgivable loan
  • Loan is forgivable after 3 years with timely payments on the first mortgage
  • Purchase of a primary residence 1-2 units
  • Conforming and high balance loan amounts
  • Credit scores as low as 620

Option #2, the Repayable loan, is different from the forgivable in that the borrower has a choice of 0 percent for 10 years or 5 percent for 30 years. This is a great option as well, because if they don’t qualify for the forgivable loan due to income or other specifications, then they still can get into homeownership with little down and pay on the second over time.

Now this loan program isn’t just for First Time Homebuyers, and it doesn’t have the homebuyer education requirement. This new program can truly mean the difference for your younger buyers or even your boomerang buyers to get into the housing market now. The purpose of this program is to assist otherwise qualified buyers that just don’t have the down payment saved, which you see a lot of in the younger buyers due to high rent and student loan debt. These issues don’t have to prevent them from purchasing.

This program is a very popular choice for the millennials and younger Generation Xers that have families and they need to have stability for their families rather than annually increasing rents. We know that the Millennials and Gen Xers are quickly moving up into management positions, increasing their earning power and yet maybe struggling to save. Programs such as this are tools to give them a head start on building family wealth, while providing stability for their growing families. When they decide to move into their dream home of forever home, they will have an asset to help launch them the second time around.

If you or you know someone who could benefit from this program, please give us a call. We are more than happy to provide additional information on this program, and give a free consultation to see if you may qualify for a mortgage.