Chenoa Fund

Chenoa No Down Payment Options

Regardless of income, Chenoa has options that can fit your needs!

Through the Chenoa Fund program, borrowers can receive an FHA first mortgage with a forgivable or repayable second mortgage of 3.5%, which can be used towards their down payment. The terms of the second mortgage are based on the borrowers qualifying income and HUD’s Area median income (AMI) requirements.

Option 1 (Forgivable)

  • Borrower earns 115% AMI or less
  • 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
  • Not just for first time homebuyers
  • Homebuyer education not required
  • Credit scores as low as 620

Option 2 (Repayable)

  • Borrower is eligible for a repayable loan
  • Choice of 0% for 10 years or 5% for 30 years
  • Purchase of a primary residence 1-2 units
  • Conforming and high balance loan amounts
  • Not just for first time home buyers
  • Homebuyer education not required
  • Credit scores as low as 620

Loan Scenario

Kristal really wants to buy a home for herself and three kids, but is unable to save the minimum for down payment. The Chenoa FHA program allows Kristal to put an offer on a home by giving her a 1st lien at 96.5% loan-to-value, and a “soft” 2nd lien, which acts as her required 3.5% minimum down payment. All that she is required to pay now is the closing costs, but even that could be paid by the sellers, so potentially all she really needs is money for the earnest to show good faith to the sellers, inspection, and appraisal (which could be credited back to her by sellers at closing).

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