Updated to 8.5

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 1003
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. Conventional Standard
97% LTV Loans
a.) CBCMA offers 3% to
cover down payment, 0.5% to
cover closing costs
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 not
required
HomeReady®️
(Conventional)
a.) CBCMA offers 3% to cover
down payment, 0.5% to cover
closing costs
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: Conventional Products

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

5. • 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

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

7. *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.

8. • 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;
some exceptions may apply
• DU®️ only—see 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

9. 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;
some exceptions may apply
• DU®️ only—see 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
• No homebuyer education class
required

10. Is my borrower in the 640–659 range (and using a program
other than Rate Advantage)?
CBCMA requires
DTI of 50% or
less
CBCMA requires that the borrower has…
• Maximum DTI 31% front-end AND
EITHER two years employed with the
current employer OR has two months
PITI reserves.
CBCMA requires that the borrower has…
• Met VA Residual Income Tests AND
EITHER has two years employed with
the current employer OR has two
months PITI reserves.
Start Here!
Choose the alternative qualification
requirement that best fits your
borrower’s situation:
But my borrower
exceeds those DTI
requirements…
Option 2Option 1
But my borrower
exceeds those DTI
requirements, and
AUS approves
above 50%…
But my borrower
exceeds those DTI
requirements, and
AUS approves
above 50%…

11. • For all borrowers in the 620-659 FICO
range making a present housing payment,
a verification of housing payment is
required. This is required regardless of
program.
• Acceptable forms of documentation
include …
• a copy of the rent/lease agreement
• bank statements tracking payments for the
amount of reported rent
• letter from the landlord
• a filled our VOR (if a VOR is provided, the
rental history will be used in credit qualification)
• For any borrowers no making a present
housing payment, regardless of FICO
range, a verification of housing payment
will also be required to be completed by
the landlord or homeowner, documenting
that no rent is required to be paid.
Verification of Housing Expense

12. 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 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
TRID points & fees test.

13. • No lender fees should be charged on
the second.
• The only fees allowed to be charged on
the second are title fees and recording
fees.
Displaying 2nd Lien Loan Fees on the 2nd CD

14. • 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
3% points and fees rule applies.
• Fees from corporate margins (from lower
rates) belong in section A of the CD, “points
and fees.”

15. 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).
• 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 maximum 3%
points and fees test.