Update to Chenoa Fund Training #1 - All.

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. 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. Up-
front fees are limited only by the 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.
• HPML (Rebuttable Presumption) is allowed, but no High
Cost Mortgages.

4. Rate Advantage (FHA)
a.) CBCMA offers 3.5% to
cover down payment
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.) CBCMA offers 3.5% to
cover down payment
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.) CBCMA offers 3.5% to
cover down payment
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.) 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: 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;
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

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;
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

11. Is my borrower in the 640–659 range?
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,
and AUS approves
above 50%…
Option 2Option 1

12. FHA Second
Mortgages:
The Rate Advantage
Program

13. • FHA product
• 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
• There is no 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. 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/

18. Is my borrower in the 620–639 range (and therefore using DPA
Edge)?
Does my borrower have
12 months of current
housing expense?
Start Here! CBCMA requires…
• Verification of 12 months
of current housing
expense
• HBE
• Payment shock of 125%
• DTI of 45%
CBCMA requires…
• Letter of Explanation (if present
housing payment is $0.00 or blank)
• HBE
• Maximum DTI of 31% front-end and
45% backend
• 3 months PITI reserves
Note: for borrowers who have close to
12 months of current housing expense,
CBCMA may allow them to follow the
other track, pending an exception
review.
Choose the alternative
qualification requirement
that best fits your
borrower’s situation.
CBCMA requires that the borrower
has…
• Verification of 12 months of
current housing expense
• HBE
• Maximum DTI 31% front-end
AND EITHER two years employed
with the current employer OR
has two months PITI reserves
Note: not to exceed 50% on the
backend.
CBCMA requires that the borrower
has…
• Verification of 12 months of
current housing expense
• HBE
• Met VA Residual Income Tests AND
EITHER has two years employed
with the current employer OR has
two months PITI reserves
Note: not to exceed 50% on the
backend.
No…
Yes!
But my borrower
exceeds the
payment shock
and/or DTI
requirements…
Option 1 Option 2

19. 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%…

20. 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
TRID points & fees test.

21. • 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

22. • If this fee is passed on to the borrower, the
3% points and fees rule applies.
• 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
• Lower rates are a reduction in the
YSP/SRP paid to the correspondent.
• Fees from corporate margins (from lower
rates) belong in section A of the CD, “points
and fees.”
• Our rate sheets refer to fees from specific
FICO bands as “Fee Paid by Lender.”
• The fee paid by the lender will be deduced
from the base price to reflect the final price.

23. 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.