CBC Mortgage Chenoa Fund – FHA Forgivable DPA
Special Alert
Maximum Purchase Price
$0
Contact Info:
Limitations
High Cost loans are not permitted. All first mortgages must adhere to QM/ATR Compliance. Mortgage loans exceeding the QM 3% max points/fees test are not permitted unless cures are applied. Bona fide discount points must adhere to CFPB and any/all state regulations. High Balance loans permitted on 3.5% DPA only. _______________________________________________________________ Escrow Holdbacks – Exception requests for escrow holdbacks will be considered for weather-related repairs only (cannot be completed prior to close due to inclement weather). Prior approval is not required when conditions outlined in Correspondent Lending Guide Section 7.16. _______________________________________________________________ Deed Restrictions – Deed restrictions allowed per FHA 4000.1 are permissible; however, easements and deed restrictions that affect marketability must be reviewed and approved by CBCMA to be eligible for purchase, unless the easement or deed restriction expires upon foreclosure (requests for review should be submitted to scenariodesk@chenoafund.org) _______________________________________________________________ Additional Properties Owned: Allowed, but a Letter of Explanation (LOE) is required to explain the motivation to keep current residence while purchasing new. An acceptable reason must be documented for the move, along with the intent behind retaining the current property. Occupancy reasonability must be documented and a QC review may be applied to the transaction. If new residence puts the borrower’s commute at an additional distance of 30 minutes to place of employment, Chenoa expects this to be referenced in the LOE. _________________________________________________________________ Undisclosed Debt Monitoring and Soft-Pull Credit Refreshes – Must adhere to the Correspondent Lending Guide Section 5.9. The primary objective is to verify there are no new inquiries or additional debt which may require AUS to be rerun. UDM is recommended to be used. _________________________________________________________________ Present Housing Expense & Verification – Must adhere to the Correspondent Lending Guide Section 5.13. This section is intended to ensure that CBCMA can analyze payment shock and its potential impact on future default mitigation overlays that may be implemented.
Credit Score Requirements
Minimum Credit Score: 600 All borrowers must have at least one score.
Deferred Payments?
Yes, for 30 years
Accepted First Mortgage Type:
FHA 203(b), FHA 234(c)
Homeowners Education Class:
Required
Is Forgivable?
– 3.5%: Forgiven upon borrower request after making 36 CONSECUTIVE ON TIME payments on the FHA first mortgage. – 5%: Forgiven upon borrower request after 120 payments on the FHA first mortgage, provided no payment was 60+ days late. If any payment
Location:
49 States Program available nationwide, except for New York.
Income Limitations:
No No income limits. To get the best rates, qualifying income should be less than or equal to 135% of AMI. Use HUD AMI chart. https://www.huduser.gov/portal/datasets/il.html Payment Shock – 600–639: 125% or less. (Borrowers with a 31/45% DTI may exceed the payment shock limit without needing an exception. 640+: No overlay.
Maximum Assistance
5% of Purchase Price 3.5% or 5% of the Purchase price or Appraised value, whichever is lower. (Alaska and South Carolina): The minimum second mortgage loan amount is $5,000. Therefore, for purchase prices below $143,800 with 3.5% assistance, or $100,000 with 5% assistance, the DPA amount will be $5,000.
Education Requirements Info:
Required for borrowers with credit scores between 600–639. This course must be taken prior to closing. • Any HUD-approved counseling course is approved by CBCMA; CBCMA no longer requires that this course be completed through Money Management International (MMI). However, CBCMA will continue to pay the course fee for those borrowers who choose to take the MMI course. (Borrowers with a FICO less than 620 are required to take the MMI course.) https://www.borrowersuccess.org/prepurchase • Please note: only the borrowers with scores less than 640 are required to take a counseling course. Any borrower on your transaction with scores equal to or greater than 640 is not required to take a course.
Eligible Property Types:
Single Family Detached Condo Townhome/PUD Manufactured Home
Income By Household Size:
None
Qualifying Ratios:
FICO 600+: per AUS 45%: > 125% payment shock or no prior housing expense. *if Approve/Eligible not received then a Manual Underwrite may be allowed.
