HELP WITH UPFRONT HOMEBUYING COSTS
Chenoa Fund down payment assistance
Explore an FHA purchase with assistance toward your down payment.
Chenoa Fund, provided by CBC Mortgage Agency, offers a second mortgage alongside an eligible FHA first mortgage. Ask our team to confirm participating-lender availability and compare the total costs for your situation.
Ask about Chenoa FundGuidelines checked October 21, 2026. Program rules and lender requirements can change. Meeting a listed minimum does not guarantee approval.
On this page
How much assistance is available?
Eligible buyers may receive 3.5% or 5% of the lower of the home’s purchase price or appraised value. Funds may go toward the required down payment, eligible closing costs, or prepaid expenses.
This is a second mortgage secured by the home. A forgivable option is conditional, so it should not be treated as an automatic grant.
What is needed to qualify?
| Requirement | What to know |
|---|---|
| Credit score | Minimum qualifying score of 600. Each borrower needs at least one score. The lender applies the program’s mortgage-score selection rules; a consumer-app score may differ. |
| Income | No Chenoa Fund program income limit. You still need verified, qualifying income sufficient for the mortgage and other obligations. |
| First-time buyer | Not required. Repeat homebuyers may qualify. |
| First mortgage | FHA 203(b) purchase financing: a fully amortizing, fixed-rate first mortgage with a 25- or 30-year term. FHA credit, loan-limit and property requirements still apply. |
| Occupancy and property | A borrower must live in the home as a primary residence. Eligible property types include 1–2-unit homes, townhomes, qualifying condos, modular homes and eligible manufactured homes. Three- and four-unit properties, vacation homes and investment-only properties do not qualify for this program. |
| Location | Chenoa Fund lists availability in all states except New York. Your originator’s licensing and the selected lender’s participation must also be confirmed. |
| Debt-to-income ratio (DTI) | For automated approvals, the allowable ratio follows underwriting findings and program rules. Manual underwriting has separate limits: 37% housing ratio and 47% total debt ratio. We calculate these from qualifying gross income and the required monthly obligations. |
| Homebuyer education | For automated approvals, borrowers scoring 600–619 must use Money Management International (MMI); 620–639 may use a HUD- or program-approved course. Borrowers at 640 or higher have no Chenoa education requirement on an automated approval. The course must be completed before closing and within the previous year. Manual underwriting requires education for all borrowers, with MMI required at scores 600–639. Confirm the approved course before enrolling. |
| Other eligibility | The full file must meet FHA and Chenoa requirements, including applicable residency, credit-history, appraisal and documentation standards. Manufactured homes and high-balance loans have additional restrictions. |
Prepare for mortgage pre-approval · Buying after bankruptcy or foreclosure?
Repayable or forgivable: what is the difference?
| Option | Main terms |
|---|---|
| Repayable second mortgage | A 10-year loan with monthly payments. Its interest rate is 1 percentage point above the first-mortgage rate. |
| Forgivable second mortgage | A 30-year second mortgage at 0% interest with no scheduled monthly payments. Forgiveness requires 36 consecutive on-time FHA first-mortgage payments, a request for forgiveness and payment of the lien-release processing cost. |
A late first-mortgage payment resets the forgiveness period. Selling, transferring ownership or refinancing before forgiveness may require repayment. Confirm payoff, subordination and forgiveness requirements with the servicer before making those plans.
The 5% forgivable option is not available for high-balance loans. Other eligible combinations require lender confirmation.
What should you have ready?
Your loan originator will provide a checklist based on your employment and loan scenario. Typically, prepare:
- Identification and any required residency documentation.
- Recent pay statements, W-2s, or the tax returns and business records needed to verify self-employed income.
- Bank statements showing available funds and documentation for any gifts or other assistance.
- Information about monthly debts, current housing payments, and any bankruptcy or foreclosure history.
- Purchase-contract and property details when available, plus the required education certificate.
Send financial records through your originator’s secure application channel. A conversation about the program is a useful first step even before you have chosen a home.
Common questions
Does this mean I can close with no money out of pocket?
Not necessarily. Assistance can reduce upfront funds needed, but closing costs, prepaid taxes and insurance, inspections, earnest money, appraisal costs or other items may remain. We will review your estimated cash to close.
Can I use gift funds too?
Chenoa permits eligible gift funds or other assistance in combination, subject to FHA, lien-position and lender rules. Document the source before transferring funds.
Is this the same as a conventional, VA or USDA assistance program?
No. The Chenoa down payment assistance described here pairs with an eligible FHA purchase loan. Other loan programs have their own requirements.
Can I use it with FHA 203(k) renovation financing?
The current Chenoa program described here specifies FHA 203(b) purchase loans. Do not assume FHA 203(k) compatibility. Ask us to compare separate renovation-financing options.
Explore renovation loansDoes assistance always save me money?
A smaller upfront payment can come with different interest rates, fees or a second-loan payment. Compare the complete Loan Estimates and second-mortgage terms against a loan without assistance, including your expected ownership and refinance timeline.
Official Chenoa Fund resources
We use CBC Mortgage Agency’s published program information and current guidelines. The lender must confirm any updates and your final eligibility.
- Chenoa Fund information for homebuyers
- Official homebuyer questions
- Current program guidelines and updates
Qualification and repayment details checked against CBC Mortgage Agency’s August 6, 2026 Seller Guide, version 12.32, and FHA product matrix. This page summarizes the FHA down payment assistance program.
Let’s review your Chenoa options.
Tell us the property state, approximate purchase price, income type and your goals. We’ll review potential eligibility and confirm participating-lender availability.
Explore your options Call (847) 238-9932Educational information, not an approval or commitment to lend. FHA mortgage insurance, lender fees, qualification and program terms apply. Faulkner Financial Group LLC is powered by Barrett Financial Group LLC, NMLS #181106. CBC Mortgage Agency administers Chenoa Fund; availability through a particular lender is subject to confirmation.