Chenoa Fund DPA For FHA loans offers one product with a repayable and forgivable option. For all products the borrower will need to have a credit score of 600 or higher,
Repayable: This loan has a 10-year term with an interest rate 2% higher than the interest rate on the FHA first mortgage. This loan does require a monthly payment on the second mortgage.
Forgivable: This loan has a 30-year term with an interest rate of 0% (0% APR). This loan does not require a monthly payment on the second mortgage. Forgiveness is determined by the DPA amount:
- 3.5%: Forgivable after 36 consecutive, on-time payments on the FHA first mortgage. This forgiveness period resets if the borrower makes a late payment, but the borrower has the full 30-year term to meet the forgiveness conditions. This loan may also be forgiven at the end of the 30-year term if the previous forgiveness condition has not been met.
- 5%: Forgivable after the initial 120 consecutive, on-time payments on the FHA first mortgage. This forgiveness period is terminated if the borrower has a payment that is 60+ days late, but the loan will remain with a 30-year term, 0% interest rate (0% APR), and no monthly payment.
Both forgivable loan options may be forgiven at the end of the 30-year term if the previous forgiveness conditions have not been met, even if the borrower made late payments on the FHA first mortgage. The loan will need to be repaid upon transfer of ownership or refinance if it is not already forgiven.
HIGHLIGHTS
- 600 MIN FICO
- DTI Per AUS
- 1 - 2 Units Only
- No Income Limits
- N/O Co Borrowers Allowed
- 2nd Loan Forgiven After 36 Consecutive On-Time
- Payments on FHA 1st Mortgage
- 3.5% DPA or 5% DPA w/ 1.5% Towards CC
- Doublewide Manufactured Allowed