Now, many families can move into a home with down-payment assistance from the Chenoa Fund.
The Chenoa Fund Conventional Loan Program provides down-payment assistance for responsible people who might have hurdles in buying a home. For those moving to San Diego, the biggest hurdle may be providing the required down payment to buy property. Many banks require 20 to 30 percent down and FHA government programs still require 3.5 percent down.
Since the average home price in San Diego is $500,000, the down payment could be out of reach for families with moderate incomes.
The goal of the fund is to increase the amount of affordable home ownership and maintain the balance between home ownership and other types of housing, such as apartments and house rentals. The fund partners with lenders to offer its down-payment assistance programs.
Basically, the fund offers a second mortgage to cover closing costs and the required down-payment for conventional mortgage loans. Fannie Mae's HomeReady program offers the program. Borrowers get a competitive rate on the first mortgage and the down-payment is paid over time.
Here's a quick rundown of our list:
However, this isn't just free money that anyone can get. There are some requirements. The Chenoa Fund seeks people who have good credit, a steady job, and other factors proving they are stable. All loans go through CBC Mortgage Agency. CBC is a non-profit agency managed by the Cedar Band of Paiutes tribe in Utah.
The Chenoa Fund offers several programs to help people in different credit brackets. Each as its own requirements and benefits. Both require FHA loan standards in loan amounts. Below is a look at the two most prominent programs.
The Chenoa Advantage program helps those with a FICO score of 640 and above. Qualified applicants can't have a previous bankruptcy, foreclosure, deed in lieu, short sale or have participated in a credit counseling program.
Your income must be 115 percent or below of your area's media income and the property can be a single-family home, condo or planned unit development (PUD). A PUD home looks like a single-family home in the fact is is a detached house with a yard, garage and everything else, but legally is closer to a condo.
PUD communities have a variety of dwellings single-family homes, condos and apartments. They also have retail shops and other types of properties. A PUD community is managed a homeowner's association (HOA) and PUD owners are required to pay to pay an HOA fee monthly. The fees are to keep with with all the communities amenities and services from playgrounds and pools to security and landscaping.
There is no sales price restrictions and a W2 program is allowed under the Advantage program. The locking rate is done manually and this program is widely available in most states.
However, the Advantage program doesn't allow someone not living in the home to co-borrow or co-sign on the loan. Compensation for the loan is borrower or lender paid. You could also be charged a contract processing fee. You will be required to pay on the second mortgage in monthly payments over either a 10-year period or a 30-year plan. The 10-year plan comes at zero interest while the longer version has some interest attached.
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The Chenoa Edge program is for those with credit scores that need some work. To be eligible, you must have a FICO credit score of at least 620. Unlike the Advantage program, there is no income restrictions with the Edge program, and your debt to income ratio’s can be up to 56.99%.
Those with less than the 115 percent of AMI under both programs get another advantage with a Chenoa Fund assistance loan. Those in that category don't immediately pay on the second mortgage. The second lien will disappear after three years if you make all your first-mortgage payments on time. In essence, the second mortgage loan turns into a grant for those responsible to make timely loan payments.
The Edge program also broadens the types of properties you can purchase. With this program, you can buy 1-2 units, a single-family home, a condo or a PUD. In a PUD purchase, 75 percent of your income can be used on a second unit.
Another difference between the two programs is a non-occupant is allowed to co-borrow or co-sign with the Edge program. However, all borrowers falling below the 639 credit score must take homeowner counseling before getting approved.
Like the Advantage program, there are no sales price restrictions with the Edge program. The locking rate is done manually, like the Advantage program.
There are options out there for low to moderate income families to move into a home in San Diego. I can help with both finding a home and getting you into the Chenoa Fund programs. Call or text me with any questions to (760) 297-4539
I will be happy to answer them and point you in the right direction.
Your Chenoa Fund Insider,
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