CBC Mortgage Agency (CBCMA) is a federally chartered, public-purpose government lender. CBC Mortgage Agency (CBCMA) created Chenoa Fund to help lenders to assist their borrowers to obtain the 3.5% minimum required investment on an FHA loan.

1. CBCMA
Training Series #2:
Underwriting
FHA Product Line

2. Show Support for a Withdrawal of
Mortgagee Letter 2019-06
HUD issued Mortgagee Letter 19-06 without following the
Administrative Procedures Act. This was unlawful, and has
caused confusion and concern in our industry.
CBC Mortgage Agency has filed for a restraining order to
temporarily block this new policy and once in place, will
file for injunctive relief. We are confident that the
mortgagee letter will be removed and a more responsible
policy will be implemented that follows the proper
procedures of public comment and an implementation
period.
As we litigate, we seek your support politically to ensure
that our politicians hold government appointees
accountable. We encourage you to please be part of the
solution to continue to help credit worthy Americans
purchase their own home. Here are some ways you can
help.
1. In the link below, you will find documents that can be used as a
template to reach out to key appointees and congress people who can
quickly act on this irresponsible use of government power. Please share
your thoughts and be heard so we can preserve responsible down
payment assistance.
https://chenoafund.org/hud-mortgagee-letter-2019-06/
2. We are also asking for the stories of any borrowers who have been
directly affected by this letter. Please send us any information you are able
to about borrowers who have been affected by this sudden change,
whether it’s their story, or their contact information so we can reach
out. We will be using this to strengthen our case, and show the negative
impact the Mortgagee Letter has had.
3. If you have suspended our program until the mortgagee letter is
withdrawn, please send that to us in writing, so we can show the number
of companies and people that this is affecting.

3. Chenoa Fund by CBC Mortgage Agency:
General Overview
• Chenoa Fund is the program name for CBC Mortgage
Agency’s suite of down payment assistance products.
These products are offered to borrowers in the form of
second mortgages.
• The programs are allowed in all states except New York.
• All programs offer 3.5% for the second mortgage. Up-
front fees are limited only by the 3% points and fees
rule.
• The first mortgage must be sold to CBC Mortgage
Agency.
• At the time you sell your first mortgage to CBC
Mortgage Agency, the down payment funds you
advanced are reimbursed.
• Your underwriter underwrites the file.
• Approved property types include SFR, PUD, Townhome,
Condo, Attached, Detached, and Modular Homes.
• No Manufactured Homes.
• HPML (Rebuttable Presumption) is allowed, but no High
Cost Mortgages.

4. Chenoa Fund by CBC Mortgage Agency:
FHA Overview
• Chenoa Fund is the program name for CBC
Mortgage Agency’s suite of down payment
assistance products, including second
mortgages for FHA loans.
• There are two FHA programs: the Rate
Advantage, and the DPA Edge.
• The Rate Advantage program has one
product. CBCMA offers the Rate Advantage
Product to provide a better first mortgage
interest rate for the borrower, and better
YSP/SRP for the lender.
• The DPA Edge is split into two products,
one for borrowers whose income is less
than 115% AMI, and one for borrowers who
income is greater than 115% AMI.
• Only the DPA Edge program includes a
forgivable second option. That option is
available for borrowers with an income that
is less than 115% AMI.

5. FHA Second
Mortgages:
The Rate
Advantage
Program

6. • Qualifying Income: < or = 115% AMI
• Requires monthly payment.
• FICO Scores 640 minimum.
• Second mortgage has a 10-Year term at
an 8% Interest rate.
• Non-occupant co-borrowers are not
allowed.
• No concurrent homeownership.
• Max DTI 50%
• Manual underwrites are not allowed.
Note: Look to this one first to benefit you
and your client.
Rate Advantage Program

7. FHA Second
Mortgages:
The DPA Edge
Program

8. • Qualifying Income: < or = 115% AMI.
• No monthly payment.
• FICO Scores 620 minimum.
• 0% Interest Rate and 30-year Term.
• Forgiven after 36 consecutive on-time
payments on FHA 1st Mortgage.
• Non-occupant co-borrowers are allowed.
• DTI per AUS or FHA manual underwriting
guides.
• Only offered for single-family and two unit
properties.
• Three to four unit properties not allowed.
1. No Payment
2. 0% Interest Rate and 30-year Term
3. Forgiven after 36 consecutive on-time
payments on FHA 1st Mortgage
4. Qualifying Income <= 115% AMI
5. FICO Scores down to 620
6. Section H of 1003 must indicate down
payment borrowed
7. Requires Funding Obligation Letter
Issued prior to closing-only CBCMA
signature
Chenoa Fund Soft SecondDPA Edge: Soft Second (1/2)

9. • Qualifying Income: > 115% AMI.
• Requires monthly payment.
• FICO Scores 620 minimum.
• 10-Year term 0% interest rate.
• 30-Year term 5% interest rate.
• Non-occupant co-borrowers are allowed.
• DTI per AUS or FHA manual underwriting
guides.
• Only offered for single-family and two unit
properties.
• Three to four unit properties not allowed.
DPA Edge: Repayable Second (2/2)

10. Rate Advantage
a.) CBCMA offers 3.5% to
cover down payment.
b.) 2nd mortgage repayable.
c.) 8% with 10 year term.
d.) 640 minimum FICO
score.
e.) Qualifying Income less
than or equal to 115% AMI.
f.) Max DTI 50%.
g.) Homebuyer education
not required.
h.) Please see HUD
handbook 4000.1 for
current upfront MIP rates.
DPA Edge: Repayable
Second
a.) CBCMA offers 3.5% to
cover down payment.
b.) 2nd mortgage repayable.
c.) 0% interest with 10 year
term or
5% interest with 30 year
term.
d.) 620 minimum FICO
score.
e.) Qualifying Income
greater than 115% AMI.
f.) DTI restrictions per
AUS guidelines.
g.) Homebuyer education
required for borrowers with
credit scores between 620-
639.
h.) Please see HUD
handbook 4000.1 for
current upfront MIP rates.
DPA Edge: Soft Second
a.) CBCMA offers 3.5% to
cover down payment.
b.) 2nd mortgage forgivable.
c.) Forgivable after 36
consecutive on-time
payments on the 1st
mortgage.
d.) 620 minimum FICO
score.
e.) Qualifying Income less
than or equal to 115% AMI.
f.) DTI restrictions per
AUS guidelines.
g.) Homebuyer education
required for borrowers with
credit scores between 620-
639.
h.) Please see HUD
handbook 4000.1 for
current upfront MIP rates.
Quick Comparison Matrix: FHA Products

11. In regards to Homebuyer Education,
Be sure to visit our Lender FAQs for more information on this topic. https://chenoafund.org/lender/lender-faq/
CBC Mortgage Agency offers pre-purchase counseling through Hope Loan Port, also known as Money Management International. This pre-
purchase counseling is provided for borrowers with a FICO score of 620 to 639, which also means this counseling is only required for our DPA
Edge products.
The aforementioned counseling courses are paid for by CBC Mortgage Agency. As such, correspondent-lenders should never direct their
borrowers with FICO scores 640+ to go to https://www.borrowersuccess.org/prepurchase. If borrowers without the proper FICO score attempt
to access this course, they will be turned away, which will cause much stress, frustration, and confusion on many borrowers’ parts.
For your borrowers that have a FICO score of 620 to 639, note that they will not be able to access the course until …
1.) they have been registered and/or locked by their lender in CBC Mortgage Agency’s portal.
2.) they have allowed for 24 hours to pass after the LO receives the relevant confirmation letter.
3.) they have a CBC loan number, provided for them by their LO (will start with “161”).
Coborrowers outside the 620 to 639 range will not need to take the course.
If you wish for your borrower with a FICO score 640+ to take Homebuyer Education through Hope Loan Port anyway, please utilize this link instead.
https://www.moneymanagement.org/buying-a-home/online-homebuyer-courses. Here, the courses range from $75-$99.
Feel free to contact info@chenoafund.org for even more information on Homebuyer Education.

12. Check out our Program Guidelines!
A more detailed version of our product matrix can be found on chenoafund.org.
First, click on Lenders.
Next, click on Program Guidelines.
Finally, scroll down to pages 8-16.

13. • Go to the HUD Area
Median Income Site.
https://www.huduser.gov/po
rtal/datasets/il.html
• Select the most recent
fiscal year.
• Then “Click Here for FY
[most recent year] IL
Documentation”
Calculating Area Median Income

14. • Select the state.
• Select the county.
• Click “View County Calculations.”
Note: This is a third party site. CBCMA State Restrictions still apply,
even if you see the option here.
Calculating Area Median Income

15. Calculating Area Median Income: Primary Method
• For the primary method,
you’ll want to pull the
number from the “Median
Family Income” column.
This is outlined in red.
• You determine the AMI by
multiplying the Median
Family Income by 115%.
Example: $69,100 x 115% =
$79,465
Note: Pick the method that will
best match your borrower to
their desired program!

16. Calculating Area Median Income:
Alternative Method
There is an alternative calculation
method allowed within the UW
comments on the 1008.
• First, locate the appropriate
family size underneath the
“Persons in Family” column, in
the “Very Low (50%) Income
Limits” row.
• Find the appropriate income
limit, and then multiply that
number by two.
• Then, multiply that number by
115%.
Example, using a family of 6:
$40,100 x 2 = $80,200 X 115% =
$92,230
Note: Pick the method that will best
match your borrower to their
desired program!

17. Pre-Registration:
The 1003

18. Both the First and Second Mortgage require
a full set of TRID compliant disclosures,
which should include the:
• 1003
• LE
• Initial CD
• Final CD
For a comprehensive list of all the
documents we require the borrower to sign,
please refer to our Program Guidelines,
which can be found at ChenoaFund.org.
1003: Important To Remember

19. Image: List secondary financing as
follows on the 1003.
Secondary Financing on 1003 (1st Mortgage)

20. Image: Where to disclose the DPA.
Declarations Page of 1003 (1st Mortgage)

21. Image: You will see this screen if you are using Secondary Financing LP
system.
Secondary Financing LP (1st Mortgage)

22. Image: The DPA must be listed as “CBC Mortgage Agency 2nd Lien”
under section L04 or under Other Credits.
1st Lien Closing Disclosure (1st Mortgage)

23. Important Reminder
• You must deliver disclosures to borrower following the
TRID guidelines.
• The LE must be mail stamped or signed by borrower
within 3 days of the 1003.
• Digital signatures are acceptable.

24. Underwriting

25. • Relevant agency guidelines.
• TRID compliance.
• Industry standards.
Underwriting must follow …

26. • Secondary Financing closes in the name
of your company.
• Secondary Financing is transferred to
CBC Mortgage Agency after close.
• 2nds are required to be registered with
MERS.
• You will need to provide a MERS number
for the 2nd mortgage deed and note.

27. Your First Mortgage will NOT BE INSURABLE if you do not have a Secondary
Financing MERS transfer to CBCMA BEFORE you request a MIC.
Or, if it applies, BEFORE you have an executed assignment of the Second Mortgage to CBC
Mortgage Agency.
Under the terms of the funding obligation letter, your company extends funds at the
closing table on behalf of CBC Mortgage Agency for the borrower’s down
payment. These funds are reimbursed by CBC Mortgage Agency at the time the first
mortgage is purchased. Industry guidelines require that the secondary financing be in
the name of the government agency prior to insuring, so it is EXTREMELY important
that all second mortgage MINS are registered with MERS as soon as possible after
closing and the TOS/TOB be executed immediately.
The second has to be transferred to CBC Mortgage Agency as soon as the
file has been closed.

28. Show Support for a Withdrawal of
Mortgagee Letter 2019-06
HUD issued Mortgagee Letter 19-06 without following the
Administrative Procedures Act. This was unlawful, and has
caused confusion and concern in our industry.
CBC Mortgage Agency has filed for a restraining order to
temporarily block this new policy and once in place, will
file for injunctive relief. We are confident that the
mortgagee letter will be removed and a more responsible
policy will be implemented that follows the proper
procedures of public comment and an implementation
period.
As we litigate, we seek your support politically to ensure
that our politicians hold government appointees
accountable. We encourage you to please be part of the
solution to continue to help credit worthy Americans
purchase their own home. Here are some ways you can
help.
1. In the link below, you will find documents that can be used as a
template to reach out to key appointees and congress people who can
quickly act on this irresponsible use of government power. Please share
your thoughts and be heard so we can preserve responsible down
payment assistance.
https://chenoafund.org/hud-mortgagee-letter-2019-06/
2. We are also asking for the stories of any borrowers who have been
directly affected by this letter. Please send us any information you are able
to about borrowers who have been affected by this sudden change,
whether it’s their story, or their contact information so we can reach
out. We will be using this to strengthen our case, and show the negative
impact the Mortgagee Letter has had.
3. If you have suspended our program until the mortgagee letter is
withdrawn, please send that to us in writing, so we can show the number
of companies and people that this is affecting.

29. Important CBC Mortgage Agency Contacts
Information and questions
info@chenoafund.org
Portal Questions
submissions@chenoafund.org
Pricing Questions
locks@chenoafund.org
Underwriting Questions
scenariodesk@chenoafund.org
Purchase Clearing
Please contact the Purchase Clearing specialist
for the specific loan you’re working on.
Collateral/Shipping
finaldocs@chenoafund.org
Servicing
servicing@chenoafund.org

30. Conclusion