Version 9.8—most current January 4

1. CBCMA Training
Series

2. This Training Includes …
1 – All Chenoa Fund Programs Overview
Conventional / FHA
2 – How to Calculate AMI
3 – Pre-Registration: The URLA
Conventional / FHA
4 – Underwriting
5 – Lock Desk
6 – How to Lock a Loan
7 – How to Secure DPA Approvals
8 – How to Draw Documents
9 – Purchase Clearing: Uploading
10 – Purchase Clearing: Conditions and
Escalations
11 – Final Documents
12 – Servicing
13 – Why Use Chenoa Fund
Conventional / FHA

3. Chenoa Fund by CBC Mortgage Agency:
General Overview
• Chenoa Fund is the program name for CBC Mortgage
Agency’s suite of DPA products, 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. The
Rate Advantage program also offers 5%. Up-front fees
are limited only by the QM 3% points and fees rule.
• The first mortgage must be sold to CBC Mortgage
Agency; the down payment funds you advanced are
reimbursed at the time of sale.
• Your underwriter underwrites the file.
• Approved property types include SFR, PUD,
Townhome, Condo, Attached, Detached, and Modular
Homes. Manufactured Homes are allowed with certain
products.
• HPML (Rebuttable Presumption) is allowed, but no High
Cost Mortgages.

4. Rate Advantage (FHA)
a.) 3.5% or 5% offered to
cover the down payment,
closing costs, prepaid items
b.) 2nd mortgage repayable
c.) 10-year term with 8%
interest
d.) 640 minimum FICO score
e.) Qualifying income less than
or equal to 135% AMI
f.) Max DTI 50%
g.) First-time homebuyer not
required
h.) Please see HUD handbook
4000.1 for MIP rates.
i.) Homebuyer education not
required
DPA Edge: Repayable
Second (FHA)
a.) 3.5% is offered to cover the
down payment, closing costs,
and prepaid items
b.) 2nd mortgage repayable
c.) 10-year term with 0%
interest –or–
30-year term with 5% interest
d.) 620 minimum FICO score
e.) No income limits
f.) FICO 620–639: 45% DTI
or less
FICO 640–659: 50% DTI or
less
FICO 660+: DTI restrictions
per AUS guidelines
g.) First-time homebuyer not
required
h.) Please see HUD handbook
4000.1 for MIP rates
i.) Homebuyer education
required for borrowers with
credit scores between 620–639
DPA Edge: Soft Second
(FHA)
a.) 3.5% is offered to cover the
down payment, closing costs,
and prepaid items
b.) 2nd mortgage forgivable
c.) 30-year term with 0%
interest (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.) FICO 620–639: 45% DTI
or less
FICO 640–659: 50% DTI or
less
FICO 660+: DTI restrictions
per AUS guidelines
g.) First-time homebuyer not
required
h.) Please see HUD handbook
4000.1 for MIP rates
i.) Homebuyer education
required for borrowers with
credit scores between 620–639
Conventional Standard
97% LTV Loans
a.) 3.5% is offered to cover
the down payment, closing
costs, and prepaid items
b.) 2nd mortgage repayable
c.) 10-year term with an
interest rate 2% higher than
the first mortgage
d.) 640 minimum FICO score
e.) No income limits
f.) FICO 640–659: 50% DTI
or less
FICO 660+: DTI restrictions
per AUS guidelines
g.) First-time homebuyer
required
h.) MI Coverage 35%
i.) Homebuyer education may
be required by Fannie Mae
HomeReady®️
(Conventional)
a.) 3.5% is offered to cover the
down payment, closing costs,
and prepaid items
b.) 2nd mortgage repayable
c.) 10-year term with an
interest rate 2% higher than
the first mortgage
d.) 640 minimum FICO score
e.) Follow FNMA guidelines
on income limits.
f.) FICO 640–659: 50% DTI
or less
FICO 660+: DTI restrictions
per AUS guidelines
g.) First-time homebuyer not
required
h.) MI coverage 25%
i.) Homebuyer education
required
Quick Comparison Matrix: All Products

5. Check out our Product Matrix!
A more detailed version of our product matrix can be found on chenoafund.org.

6. • Required in the closed loan package for all
programs
• The letter states:
• Where the down payment is coming
from
• CBCMA’s promise to reimburse your
company for the secondary financing
• When we purchase the first mortgage,
CBCMA reimburses the funds you
advanced for the borrower’s down payment
Funding Obligation Letter
600 N 100 E
Cedar City, UT 84721
Lender: ABC Lender
Loan Application Number: 151110001
FHA Case Number 123-230598230-704
Borrower(s): John Doe
Jane Doe
Purchase Price of Property: $200,000.00
Property Address: 123 Main Street
Anywhere, TN 34222
Form of Assistance: Soft Second
Amount of Assistance: $7,000.00
Interest Rate (If Applicable): 0
Term (If Applicable): 360
Monthly Payment Amount (If Applicable): $0.00
Commitment Date: 11/10/15
As of the commitment date, CBC Mortgage Agency has incurred a legally enforceable obligation to
provide the funds towards the Borrower(s)’ Minimum Required Investment. Lender should
deliver funds for the MRI to the closing entity prior to or at the time of loan closing. CBCMA will
reimburse Lender from funds legally belonging to CBCMA at or before closing under this
obligation once the following conditions are met:
• The first mortgage associated with this assistance must be closed and delivered to CBCMA
for purchase.
• All purchase conditions for the first mortgage associated with this assistance must be
satisfied.
If these items are not delivered to CBCMA, this obligation will be void. WARNING: Failure of
CBCMA to satisfy the obligation may result in a determination that the funds for the Borrower(s)’
MRI were provided by a prohibited source and the first mortgage obligation may not be insurable
under the FHA insurance program.
Sincerely,
MRI Funding Obligation
Image: Soft Second FOL

7. Fannie Mae’s
HomeReady®️
Program*
AND
Conventional
Standard 97% LTV
Loans*

8. *Note: to offer conventional products,
you must be FNMA approved.
Neither CBC Mortgage Agency (CBCMA),
nor any Chenoa Fund products, are
approved by or affiliated with Fannie Mae.
Originating lenders are responsible for
ensuring that their use of CBCMA second
mortgages and conventional first mortgages
are compliant with Fannie Mae
requirements.
CBCMA’s Correspondent Lending Guide
(CLG) include overlays to the HomeReady®️
program.
HomeReady®️ is a registered trademark of
Fannie Mae.
DU®️ is also a registered trademark of Fannie
Mae.

9. • No borrower investment required
• Income limits per FNMA guidelines
• Minimum FICO score of 640
• 30-year fixed rate first mortgage
• Second lien is a 10-year fixed rate
mortgage with an interest rate 2% higher
than the first mortgage
• Concurrent homeownership not allowed
• DU®️ only—see our Correspondent
Lending Guide for more information on
LTV/CLTV limitations
• Single family only
HomeReady®️
• Purchase only
• MI coverage 25%
• First-time homebuyer not required
• Requires borrower to take homebuyer
education class

10. Conventional Standard 97% LTV Loans
• No borrower investment required
• No income limits
• Minimum FICO score of 640
• 30-year fixed rate first mortgage
• Second lien is a 10-year fixed rate
mortgage with an interest rate 2% higher
than the first mortgage
• Concurrent homeownership not allowed
• DU®️ only—see our Correspondent Lending
Guide for more information on LTV/CLTV
limitations
• Single family only
• Purchase only
• MI coverage 35%
• One borrower must be a first-time
homebuyer
• Homebuyer education class
required if LTV is 97% or higher
(per Fannie Mae guidelines)

11. Is my borrower in the 640–659 range?
CBCMA requires
DTI of 50% or
less
The borrower has…
• Two (2) years employed with the
current employer OR two (2) months
PITI reserves.
Not to exceed 55% DTI.
The borrower has…
• A maximum DTI 31% front-
end OR met VA Residual
Income Tests
Not to exceed 55% DTI.
Start Here!
Choose one alternative qualification
requirement from both boxes that
best fits your borrower’s situation:
But my borrower
exceeds those DTI
requirements, has
DTI 55% or lower,
and AUS approves
above 50%…
Choice 1
AND
Choice 2

12. FHA Second
Mortgages:
The Rate Advantage
Program

13. • FHA product
• The only Chenoa Fund product to offer
3.5% or 5% DPA
• Qualifying Income: < or = 135% AMI
• Requires monthly payment
• Minimum FICO score of 640
• 30-year fixed rate first mortgage
• Second mortgage has a 10-year term at
an 8% Interest rate
• Non-occupant co-borrowers not allowed
• No concurrent homeownership
• Manual underwrites not allowed
• DTI 50% or less; alternative qualification
requirements do not apply
Look to this product first to benefit you
and your client.
Rate Advantage Program

14. FHA Second
Mortgages:
The DPA Edge
Program

15. • FHA product
• Qualifying Income: < or = 115% AMI
• No monthly payment
• FICO score 620 minimum
• 30-year fixed rate first mortgage
• Second mortgage has a 0% interest rate and
a 30-year term, with no monthly payment
• Forgiven after 36 consecutive on-time
payments on FHA 1st mortgage
• Non-occupant co-borrowers are allowed
• Concurrent homeownership is allowed, but
one of the borrowers must occupy the
property as their primary residence and an
LOE is required; see CBCMA’s Product
Matrix for more information.
DPA Edge Program: Soft Second
• Only offered for single-family and two-
unit properties
• No first-time homebuyer requirement

16. • FHA product
• No income limits
• No loan forgiveness for this product
• FICO Score 620 minimum
• 30-year fixed rate first mortgage
• Second Mortgage is repayable, with two
options for terms:
• 10-year term 0% interest rate
• 30-year term 5% interest rate
• Non-occupant co-borrowers are allowed.
• Concurrent homeownership is allowed,
but one of the borrowers must occupy the
property as their primary residence and
an LOE is required; see CBCMA’s
Product Matrix for more information.
DPA Edge Program: Repayable Second
• Only offered for single-family and two-
unit properties
• No first-time homebuyer requirement

17. Is my borrower in the 620–639 range?
Does my borrower have
12 months of current
housing expense?
Start Here! CBCMA requires…
• Verification of 12 months of
current housing expense (LLC
or management company)
• 12 months of cancelled
checks or bank statements
(family or individual)
• HBE
• Payment shock of 125% or
less
• DTI of 45% or lessCBCMA requires…
• A VOR documenting no rent paid
• An explanation in the comments
section of the 92900-LT
• HBE
• Maximum DTI of 31% front-end and
45% backend
• 3 months PITI reserves
• Minimum 2 years with present
employer
• Meet VA Residual Income
requirements
Choose one alternative
qualification requirement
from both boxes that best fits
your borrower’s situation:
The borrower has…
• Two (2) years employed with the
current employer OR two (2)
months PITI reserves.
Note that the borrower still needs
verification of 12 months of housing
expense or 12 months of cancelled
checks/bank statements, and an HBE.
Not to exceed 50% DTI backend.
The borrower has…
• A maximum DTI 31% front-end OR
met VA Residual Income Tests
Note that the borrower still needs
verification of 12 months of housing
expense or 12 months of cancelled
checks/bank statements, and an HBE.
Not to exceed 50% DTI backend.
No…
Yes!
But my borrower
exceeds the
payment shock
and/or DTI
requirements and
is less than 50%
DTI…
Choice 1 Choice 2
AND

18. Is my borrower in the 640–659 range (and not using Rate
Advantage)?
CBCMA requires
DTI of 50% or
less.
The borrower has…
• Two (2) years employed with the
current employer OR two (2) months
PITI reserves
Not to exceed 55% DTI.
Start Here!
Choose one alternative qualification
requirement from both boxes that
best fits your borrower’s situation:
As of June 15, 2020, CBCMA also requires
borrowers in the 640-659 range to have a
verification of their current housing expense.
But my borrower
exceeds those DTI
requirements, and
AUS approves
above 50%…
The borrower has…
• A maximum DTI 31% front-
end OR met VA Residual
Income Tests
Not to exceed 55% DTI.
Choice 1 Choice 2
AND

19. FHA Homebuyer Education
• Pre-purchase counseling required for borrowers within
the FICO band of 620–639
• HUD-approved counseling only
• If you are unsure of appropriate alternatives, CBC
Mortgage Agency pays for pre-purchase counseling
through Money Management International
• Be sure to visit our Lender FAQs for more information
on this topic: https://chenoafund.org/lender/lender-faq/
• MMI offers counseling to borrowers up to 18 months after
closing
• MMI is an outreach program; they do not automatically
initiate counseling unless the borrower requests it
• MMI checks in with the borrower to make sure they are
doing okay and offer encouragement and assistance of any
kind to further support the borrower’s path to successful
homeownership

20. • Borrowers in the 620–639 FICO range
making a present housing payment must
either:
• Provide a 12-month verification of housing
payment (if renting from an LLC or
management)
• Provide 12 months of cancelled checks or
bank statements (if renting from family or
an individual)
Verification of Housing Expense
• All borrowers in the 640–659 FICO range
must provide a verification of current
housing expense, but a payment history is
not required. Acceptable documentation
includes:
• A copy of the rent/lease agreement
• Bank statements tracking payments for
the amount of reported rent
• A letter from the landlord
• A filled-out VOR (if a VOR is provided, the
rental history will be used in credit
qualification)
• All borrowers in the 640–659 FICO range
may have a housing gap of up to 90
calendar days; a gap of more than 30
days will require a letter of explanation
• All borrowers making no present housing
payment in the 620–650 FICO range must
provide verification of housing payment
documenting that no rent is required to be
paid.

21. • All borrowers must have one credit score.
• CBCMA requires either a soft pull credit
report OR UDM within ten calendar days of
close.
• CBCMA prefers UDM; if you do a soft pull,
you must pull from all three bureaus, even if
the borrower only has one credit score.
• If you use UDM, you may choose to pull
from only one bureau.
• Our primary goal behind this requirement is
to verify that there are no new material
inquiries, which may require the file to be
rerun through AUS.
• If a new material inquiry is discovered, then
CBCMA will require that an LOE explaining
the new material inquiry be provided to
determine if new debt was incurred.
• If new debt was incurred prior to closing,
then Agency guidelines may require that the
file be re-run through AUS and the debt
added to the borrower’s final application.
Undisclosed Debt Monitoring and Soft Pull of the Credit Report

22. Admin Fee Clarifications
• $399 Admin Fee on first mortgage
• Charged to the correspondent
• Reflected on the PA as a deduction from total
loan sale proceeds
• No lender fees on secondary financing
• Additions to the lender fees to offset the
Admin Fee:
• NEVER reflect as a charge payable to
CBCMA
• List fee must always be listed in Section A, in
Origination Charges or as a separate line item
Admin charge
• If passed to the borrower, this fee is subject to
the QM 3% points & fees test

23. • No lender fees should be charged on
the second.
• The only fees allowed to be charged on
the second:
• Prepaid interest
• Recording fees for the Deed of Trust
• Reasonable settlement fees
• A courier fee to return the signed
documents to the lender
• At no time will CBCMA purchase a loan
that exceeds the QM 3% points and
fees test.
Displaying 2nd Lien Loan Fees on the 2nd CD

24. • Review the Buckley Sandler memo on
converting points and fees between
borrower and seller:
https://chenoafund.org/lender/cbc-
documents-and-tools/
• Converting seller credits can pay this fee if
the following is done before closing:
• Borrower has signed an addendum to the
note (found at the above link)
• The fee is itemized in the seller’s column on
the CD
• This allows the charges to not be counted
for the 3% points and fees rule.
Rate Sheet Clarification
• CBCMA:
• Offers one rate for each product and its
FICO band
• Does not charge discount points
• Cannot, in the current market, offer the
alternative par rate necessary for discount
points to be bona fide
• Our rate sheets refer to fees from specific
FICO bands as “Fee Paid by Lender.”
• Any fees paid by the lender to CBCMA are
a reduction in the YSP/SRP.
• If this fee is passed on to the borrower, the
QM 3% points and fees rule applies.
• Fees from corporate margins (from lower
rates) belong in section A of the CD, “points
and fees.”

25. Maximum Origination Fee
• CBCMA will allow a maximum origination
fee of 1.5%.
• Additionally, the lender may charge for any
CBCMA loan level pricing adjustments
(LLPAs); this charge may be seller-paid.
• Lenders will be required to refund
borrowers for any origination fees (including
non-bona-fide discount points) exceeding
1.5% plus CBCMA LLPAs.
• Reasonable lender underwriting,
administrative, or program fees are not
considered in this calculation; however,
they are considered in the QM 3% points
and fees test.