Chenoa Down Payment Assistant Program.

Orion Lending 
https://star.orionlending.com/STAR/Account/Login

Orion Lending offers the incredible Chenoa 3.5% Down Payment Assistance Program for FHA loans (Conventional Chenoa is temporarily suspended), which has a FORGIVABLE Soft 2^nd option (no actual payment on the 2^nd). We handle the DPA for you and provide the funds at the closing table. This a GREAT way to gain realtor or builder referrals while helping borrowers who need it most. More info on Chenoa’s site HERE. 

Basics:

• 620+ Scores (640+ for manuf homes)
• 2^nd Lien for 3.5% down payment is 30-year term, 0% interest rate, no monthly payment.
• The 2^nd lien is forgiven after 36 consecutive on-time payments on the first mortgage.
• Must pay off with a refinance – cannot be subordinated.
• Non-occupant co-borrowers allowed.
• Manual Underwriting allowed (except for manuf homes).
• Principal residences only. 1-unit, 2-unit, eligible condo, or PUD

Seller Contributions:

This DPA is JUST for the 3.5% Down Payment, and the rate will generally not have much credit, if any. Closing costs and pre-paids can be covered with borrower funds, a gift, or seller contributions on the contract. Depending on the purchase price, usually 4-5% Seller Contributions will cover everything, including your comp, $1295 lender fee, closing costs, and escrows (and any discount points if applicable).

Broker Compensation:

ALL Chenoa loans are Borrower Paid Comp (cannot be LPC) and Chenoa is currently capping BPC at 1.5% during the pandemic.

Income Caps (based on total qualifying income for borrowers on the loan only):

View the county median family income levels here:

• Family sizes 1-4: Household income can be up to 115% of the Median county income.
• Family Sizes 5+: Household income can be up to Very Low x 2, then multiply by 115%.

NOTE: If the borrowers on the loan are OVER the caps, no problem, but you must use the “Repayable 2^nd” Chenoa DPA instead of the “Foregiveable Soft 2^nd”, which will have a monthly payment.

Rates: The forgiveable 2^nd DPA has ONE rate option, currently 3.75%, which is set by Chenoa here (not us). 

Turn-times: Same as regular FHA – See my email signature below. Although we do handle getting Chenoa approval in loan setup, please allow 45 days from submission to close on Chenoa loans. And we even offer TBD on these!

 Chenoa DTI Caps:

620-639 (Without present housing payment)

• 31/45% max DTI
• Homebuyer Education
• 3 months PITI reserves
• Minimum two (2) years with present employer
• Meet VA residual Income Requirements
• DTI Exceptions not allowed.

620-639 (With present housing payment)

• Payment shock not to exceed 125%
• Homebuyer Education
• 45% max DTI
• 45% – 50% only if the borrower meets 1 of these 2 requirements:

• Option 1 – Maximum housing DTI of 31% and either 2 years employed with the current employer of two months PITI. –OR-
• Option 2 – Meets VA Residual Income Tests and either has two years employed with the current employer or two months PITI reserves.

640-659

• 50% max DTI
• 50% – 55% ONLY if the borrower meets 1 of these 2 requirements:

• Option 1 – Maximum housing DTI of 31% and either 2 years employed with the current employer of two months PITI. –OR-
• Option 2 – Meets VA Residual Income Tests and either has two years employed with the current employer or two months PITI reserves.

660+

• DTI per AUS

 Registering/Submitting:

When registering/pricing these, select FHA for the LOAN TYPE, and then “Chenoa Fund DPA (Soft 2^nd) for the LOAN PURPOSE.

NOTE: If you need assistance registering/submitting, please call our Help Desk at 844.202.8440.

Disclosures:

• Initial Disclosures: We issue the initial disclosures and send out the entire loan package for you on Chenoa Loans to ensure that they are done correctly, so you cannot send disclosures instantly in our portal like you can for other file types. Register the file in STAR, upload at least the skinny file, and then “request” disclosures, and we will send them electronically to the borrower within 24hrs.

• CDs: There are TWO CDs that go out on Chenoa loans, one on the 1^st and then one on the Soft 2^nd the FOLLOWING day. Please account for the additional day in your timelines.