Many loan officers and realtors have been there before. You’ve found an excited borrower, maybe a young family, looking to purchase a home—maybe even for the first time. The process is exciting and daunting for your borrower and your borrower needs a lot of help, advice, encouragement, information–you name it. Still, you can’t help but feel a little energized by your borrower’s enthusiasm, until you hit a wall. Your excited borrower isn’t on the best footing to afford a down payment and closing costs. You could tell your borrower to come back and try again later, but… is there another option, a responsible one that can help your borrower now?
The Problem with Waiting to Buy a Home
It’s no secret that, in many parts of the country, home prices are increasing faster than wages, and rent is also increasing. This puts borrowers in a bind and may delay their ability to purchase a home for years for several reasons. First, when rent rises faster than wage increases, it becomes more and more difficult for a borrower to save up for a down payment. Second, as home prices increase down payment costs do too, meaning that the borrower has to save up more this year than last, and even more next year. Couple these two problems with the common borrower myth that there is a universal down payment minimum of 20% and it’s no wonder that many would-be homebuyers are afraid that they’ll never own a home.
Waiting also creates other missed opportunities. According to the U.S. News and World Report, every year spent renting is a year that borrowers miss out on growing equity. In many markets, equity is growing faster now than it has in over seven years with the average increase from January to March 2021 being $26,300. This goes to show that owning a home can build wealth instead of renting which can take on rent hikes with no money being invested in a home that has the ability to be around and make an impact for many generations.
How Can You Help Borrowers Overcome Home Buying Roadblocks?
Many of the borrowers that we’re talking about have the monthly income to afford a mortgage payment but may not have the cash on hand to afford a down payment or closing costs. Others have the money but wouldn’t be able to afford essential purchases if they did put all of their savings into the home. Both groups of borrowers would be equally well served by down payment assistance, which may allow them to purchase their home now and retain much of their savings. Enter CBC Mortgage Agency’s Chenoa Fund!
Chenoa Fund is a nationwide down payment assistance program offered by CBC Mortgage Agency. As a nationwide program, with Chenoa Fund you will only need to learn one program and then will be able to use it in any state (except for New York state), city, or county. Through Chenoa Fund, your borrower may receive a second mortgage to cover the down payment and, potentially, assist with closing costs. On FHA loans, Chenoa Fund offers 3.5% or 5% assistance (based on the lower of the purchase price or appraised value) on all of its products and has a minimum qualifying credit score of 600. On FNMA conventional loans, Chenoa Fund offers 3% or 5% assistance (based on the lower of the purchase price or appraised value) on all of its products and has a minimum qualifying credit score of 620. You can learn more about Chenoa Fund down payment assistance requirements by visiting CBC Mortgage Agency’s website or reaching out to our information team.
With Chenoa Fund in your back pocket, you may ensure that more of your borrowers are able to achieve the financial and emotional advantages that homeownership may bring.
How Can I Offer CBC Mortgage Agency’s Chenoa Fund Down Payment Assistance Program?
CBC Mortgage Agency’s Chenoa Fund is offered through correspondent lenders. For wholesale lenders, this means that your company will need to apply to offer Chenoa Fund (instructions on how to do so can be found here). After your company’s application is accepted one of our account executives will reach out to your branch to train you on Chenoa Fund requirements and processes.
For brokers, Chenoa Fund can be accessed through wholesale lenders by using a Third Party Origination. To get connected with a wholesale lender that offers Chenoa Fund, and to learn more about the program, reach out to our information team.
And finally, for realtors, you can offer Chenoa Fund to your clients by referring them to lenders that offer Chenoa Fund. Reach out to our information team to get connected with a wholesale lender that offers Chenoa Fund.
CBC Mortgage Agency – NMLS 1186381
For licensing information, go to www.nmlsconsumeraccess.org.
Chenoa Fund is a registered trademark.
Illinois Residential Mortgage License #MB.6761292. Illinois Department of Financial and Professional Regulation, Division of Banking, 100 West Randolph, 9th Floor, Chicago, IL 60601 – 1-888-473-4858; Georgia Residential Mortgage Licensee, License # 1186381.