Because a down payment is such a massive barrier to homeownership for many Americans, the Chenoa Fund helps break this barrier by financing the expense. Through the program, borrowers can actually receive an FHA mortgage and combine it with a small second mortgage that covers the down payment.
The result? You have two loans that bring 100% financing for a home!
The Chenoa Fund Down-Payment Assistance: How to Get 100% Financing
The first FHA mortgage (the larger) will follow the regular FHA standards, but the terms for the second one are slightly different. They will be based on your qualifying income, as well as the median income requirements from the Department of Housing and Urban Development (HUD).
To qualify, you must earn less than 115% of HUD’s median income, which is determined by area. You will also need a credit score of 640 or higher. This financing is eligible for single-family homes or duplexes, but anything more than two units is not allowed for this program.
It’s also available for homebuyers at all stages of life, not just first-time homebuyers, and there are no homebuyer-education requirements.
The Chenoa Fund: A Look at the Details
There are many ways that you can use the Chenoa Fund. One is the soft second, which is a forgivable and more flexible option. There is no payment on the second, and for this program, only a 620 loan is required, opening it for many more borrowers. It also allows for incomes at 115% of the median income stated by HUD, and it is disclosed and recorded. There is also 0% interest on the second loan if you go with a 30-year term, and non-occupant co-borrowers are allowed. Like the others, it’s available for single-family and duplexes, and can be forgiven after 36 months. This program, however, is not available for manufactured housing.
Another option is the repayable high-balance, which allows for a 3.5% repayable loan on your home. It comes with a monthly payment and, like the previous option, also allows for 620 score in some cases. On a 10-year term, it has 0% interest, making it an affordable option for many borrowers. However, if you choose a 30-year term, you will have 5% interest added to the balance. It also allows for a single-family or duplex, but requires a 36-month subordination on the loan.
For well-qualified borrowers, there is also the option of a repayable second, which is a rate advantage program. With this option, you again get a 3.5% second mortgage with monthly payments. It has a competitive first rate with the same income qualifications as the previous down-payment assistance options. While it has a competitive first rate, it also has 8% interest on a 10-year term. With this third option, there are concurrent co-borrowers and no non-occupant owners. Manual underwriting is also not allowed, which may make the loans harder to obtain for some people. It has a 50% max DTI and follows TRID guidelines.
Why Choose the Chenoa Fund Down-Payment Loan?
With these options, you can find the right Chenoa Fund down-payment assistance to meet your needs. But there are, in fact, many other down-payment assistance (as we’ll discuss later), so what makes Chenoa stand out?
If you are considering a home purchase in the future, but aren’t sure if you can afford the down payment, you should seriously consider the Chenoa Fund. First of all, it allows you to purchase the home with absolutely no money down. With the cost of living, student loans, car payments, and other regular expenses, saving thousands of dollars can be seem impossible, making homeownership seem like a dream. With the Chenoa Fund, however, you can break this pattern and finally enter into homeownership.
Other Down-Payment Assistance and 100%-Financing Options
The Chenoa Fund is a helpful option, but there are other choices for people who need assistance with a down payment.
One of the most popular options for qualifying home buyers who are not able to save for a down payment is a VA loans. These loans are available to veterans of the armed forces, as well as some qualifying family members, and they can be used to finance 100% of a home purchase. In a way, this really isn’t even down-payment assistance, but down-payment elimination.
These loans are available for active, non-active, and retired military members, including Reserve and National Guard. No down payment is needed for these loans, and no monthly mortgage insurance is required, which makes these loans one of the most affordable options for those who have served the country. With these loans, there is also a limitation on buyer’s closing costs, and the loan is assumable subject to VA approval. It is available as a 30-year fixed rate, and the seller can pay up to 4% of the veteran’s closing costs and pay down the debt in order to help a veteran qualify.
Equity Partnership Programs
With these programs, private companies interested in long-term investments contribute the down payment and, when the home is sold years from now, the company receives a share of the gain in value. The advantage is that homeowners gain a partner that shares the investment. This program is available through San Diego Purchase Loans, so feel free to contact us for more information.
Community Block Development Grants have been created by HUD to assist buyers with down payments. They are specifically designed for communities that need development, including higher rates of homeownership and local infrastructure.
National Homebuyers Fund
This is a non-profit organization that seeks to expand homeownership through many efforts, including down-payment assistance. They actually offer up to 5% of the loan amount and this never has to be paid back, regardless of when you sell your home.
Helping You Get the Home Loan and Assistance You Deserve
Down payments can be difficult, but with San Diego Purchase Loans, you’ll be guided to the right program to fit your needs. Contact our dedicated team to learn more about our assistance with home loans and other mortgage issues.
I was referred to Chad by my Realtor for a purchase of a new house. The experience with Chad and the team (I mainly worked with Juliann) was nothing short of outstanding. From start to finish there were always quick to respond and when needed, notify me of any new documentation that was required. There were very helpful explaining to me the pros and cons of different financing options as well as some other loan related issues, such as termite clearance outside the purchase contact and septic tank certification process. Overall, very knowledgeable and processional team. Loan preapproval was done in a single day and loan documents were ready for signing in 21 days, which was 9 days ahead of schedule. That never happened to me before.
“Hi Juliann and Chad, I wanted to take a moment and thank you guys for what would have been impossible for us to do without you. We wouldn’t have our keys in hand if it had not been for your help in navigating the financing, and Juliann’s perseverance in getting the rest of the players in the transaction to deliver. Out of everything, our interaction with your office has been a highlight – and your customer service has been beyond everything we’ve experienced in the real estate industry. Is there a way we can provide any reviews, ratings, testimonials, or other statements that can express to your potential future customers how much you guys do to make the customer’s life easy? Please let us know how we can share our great experience with you to the rest of the public. Whether we refinance this under a VA, or get in a bigger/better house in a few years, we’re not going to go anywhere else for financing. We are customers of yours as long as you are in business. Thanks again for getting us in a house!”
Chad and his team were Awesome to work with! I was referred to Chad by a good friend of mine. I was very impressed with the professionalism and quick response times from Chad Baker & his team during the entire process. I screened over 3 lenders before selecting the Chad Baker Team and I’m confident I made the right choice. It’s obvious that customer service is their #1 priority and it shows. I highly recommend Chad if you have lending needs. ”