Orion Lending Chenoa Fund – FHA Forgivable Second Program
Special Alert
Please check income limits (115% AMI) and purchase price limits (FHA loan limit) for your State/County.
Maximum Purchase Price
$0
Contact Info:
https://www.orionlending.com/product-rate
Limitations
Minimum loan amount on 1st mortgage is $55,000. High Balance o Repayable – allowed for 3.5% and 5% assistance o Forgivable – allowed for 3.5% assistance only Chenoa Fund 3.5% – This particular second is forgiven once the borrower makes thirty-six (36) consecutive on-time payments. This forgiveness period resets if the borrower makes a late payment on the first mortgage. If this forgiveness condition is not met before the end of the 30-year term, then the loan may be forgiven at the borrower’s request and upon the borrower’s payment of processing the lien release. This loan permanently loses its forgivable status if, during the initial thirty-six (36) payments on the first mortgage, the borrower refinances the first mortgage and state law allows the second mortgage to subordinate without prior consent from CBCMA. (Please reach out to servicing@chenoafund.org to discuss subordinations.) Chenoa Fund 5% – may be forgiven if all borrower payments are less than sixty (60) days late on the first one-hundred and twenty (120) payments. This forgiveness period does not reset if any of the first one-hundred and twenty (120) payments on the FHA first mortgage are sixty (60) or more days late; in such a situation, the loan would not be forgiven after the first one-hundred and twenty (120) payments on the FHA first mortgage, but the loan would still have a 0% interest rate and no monthly payment for the rest of the 30-year term. If this loan is not forgiven after the first one-hundred and twenty (120) payments on the FHA first mortgage and this loan reaches the end of its 30-year term, then the loan may be forgiven at the borrower’s request and upon the borrower’s payment of processing the lien release. This loan permanently loses its forgivable status if during the initial one-hundred and twenty (120) payments on the first mortgage the borrower refinances the first mortgage and state law allows the second mortgage to subordinate without prior consent from CBCMA. (Please reach out to servicing@chenoafund.org to discuss subordinations.) __________________________________________________________________________________ Employment Gaps: All loan applications must contain a complete two-year history of employment. LOE is required for any gaps larger than thirty (30) days or with less than two (2) years of employment history. The start date for this two-year history is the application date for the 1003. __________________________________________________________________________________ Present Housing Expense & Verification of Rent – Refer to section 2.7 of the FHA DPA Product Matrix. __________________________________________________________________________________ Payment Shock: Credit Scores 600 – 639: Limited to 125% when DTI exceeds 31/45. Credit Scores 640+: No restrictions.
Credit Score Requirements
Minimum Credit Score: 600 All borrowers must have at least one credit score. Soft pull credit report required within 10 days of Note date. AUS Approve/Eligible required when Alternative Qualification Requirements (AQR) is used.
Deferred Payments?
Yes, for 30 years
Accepted First Mortgage Type:
FHA 203(b), FHA 234(c)
Homeowners Education Class:
Required
Is Forgivable?
3.5% DPA Forgiven as soon as borrower makes 36th Consecutive On Time payments on the FHA first mortgage. OR 5% DPA Forgiven at 120 days as long as borrower makes 120 consecutive on time payments on the FHA 1st mortgage.
Location:
49 States Program available nationwide, except for New York.
Income Limitations:
No No AMI Limit. LLPA added if income is > = 135%, based on family size (Use HUD AMI Chart).
Maximum Assistance
5% of Purchase Price Minimum of $55,000 3.5% or 5% of the Purchase Price rounded to the nearest dollar (See limitations for additional details). * 3.5% 2nd mortgage: Forgiven after 36 consecutive on time payments * 5% 2nd mortgage (includes 1.5% towards closing costs): Forgiven after 120 consecutive on-time payments. South Carolina and Alaska: $5,000 minimum DPA amount. New York not permitted.
Education Requirements Info:
• Required for borrowers with credit scores between 600–639. This course must be taken prior to closing. • FICO 600-619: Money Management International https://www.moneymanagement.org/buying-a-home • FICO 620-639: Any HUD-approved counseling course may be used. • FICO 640+: Not required. Please note: only the borrowers with scores less than 640 are required to take the course. Any borrower on your transaction with scores equal to or greater than 640 is not required to take the course.
Eligible Property Types:
Single Family DetachedCondo Townhome/PUDManufactured Home Modular Home
Income By Household Size:
None Max Seller Contribution: 6%
Qualifying Ratios:
Housing Ratio: — Total DTI: Up To 50% • FICO 660+: DTI per AUS Approval. • FICO 640-659: 50% DTI or less. (Alternative Qualification Requirements (AQR) for more details) https://chenoafund.org/lender/product-matrix/ • FICO 620-639: 45% DTI or less. (See Alternative Qualification Requirements (AQR) for more details) https://chenoafund.org/lender/product-matrix/ • FICO 600-619: 45% DTI or less (not eligible for Alternative Qualification Requirements) • AQR: . Have 2 years employed with the current employer OR 2 months PITI; AND . Have max DTI 31% front-end OR meet VA Residual Income test. Manufactured Homes: Max 50% with FICO 640-659 Max 45% with FICO 600-639 AQR may not be used to exceed DTI limits.
