This new program is a great loan for buyers that do not have any of their own funds to put down on a home.  There is an FHA first mortgage and then a Chenoa Fund second mortgage for 3.5% to meet the FHA down payment requirements.  The best part is that under some circumstances, the second mortgage (soft second) does not have a monthly payment and is forgiven after 36 on-time payments.  Amazing!

Here are a few details

  • Fico scores down to 620
  • Non-Occupant (Hi Mom!) co-borrowers allowed
  • Seller can pay all closing costs so borrower can truly get into home with Zero funds
  • Single family, condo and townhome properties
  • To be eligible for the soft second, occupant must make less than 115% of the area median income.  No payment and forgiven after 36 on-time payments
  • If not eligible for soft second then there the second mortgage will have an option of 0% interest over 10 years of 5% interest over 30 years.

Please let me know if you have questions on this… and please pass along to anyone you know that might benefit from this program.