CBC Mortgage Agency cuts rates on down payment assistance second mortgages

Key Takeaways:

– CBC Mortgage Agency is reducing interest rates on second mortgages used for its down payment assistance (DPA) program.
– This is the first time that CBC Mortgage Agency has reduced interest rates on its DPA program for Federal Housing Administration (FHA) loans.
– The rate reduction is aimed at supporting families on their journey to homeownership and lowering the cost of owning a home, particularly for low-to-moderate income communities.
– CBC Mortgage Agency offers the Chenoa Fund DPA program, which has both a repayable and forgivable option.
– The repayable option has a 10-year term with a mortgage rate that is 2% higher than the FHA first mortgage. It requires a monthly payment.
– The forgivable option has a 30-year term with a 0% interest rate. It does not require a monthly payment and gets taken off the second-lien position after a certain number of consecutive on-time payments on the FHA first mortgage.
– The rate reduction aims to help more borrowers qualify for the program.
– The Chenoa Fund DPA program does not have income limits and is available for borrowers with a minimum credit score of 600.
– CBC Mortgage Agency’s Chenoa Fund program has completed over 40,000 mortgage transactions since its founding in 2013.

HousingWire:

CBC Mortgage Agency — a federally chartered housing finance agency — is reducing interest rates on repayable second mortgages used for its down payment assistance (DPA) program.

This marks the first time for CBC Mortgage Agency is reducing interest rates on its second mortgages used for its DPA program on Federal Housing Administration (FHA) loans amid mounting affordability pressure for underserved and first-time homebuyers.

“The rate reduction aligns with the company’s mission to support families on their journey to homeownership. Lowering the cost of owning a home, especially on financing costs, can make a substantial difference for many borrowers especially those in low-to-moderate income communities,” said CBC Mortgage Agency. 

CBC Mortgage Agency is the provider of Chenoa Fund, a national DPA program that comes in a repayable and forgivable option.

The Chenoa Fund DPA program offers a 10-year repayable option on the second loan with a mortgage rate that’s 2% higher than that of a FHA first mortgage. The second mortgage requires a monthly payment.

The forgivable option for a Chenoa Fund DPA has a 30-year term with a 0% interest rate. The loan, which doesn’t require a monthly payment on the second mortgage, gets taken off from the second-lien position either after 36 or 120 consecutive on-time payments on the FHA first mortgage, depending on the down payment assistance loan amount. 

“Among the measures within our control is the note rate on our portfolio seconds. By meaningfully reducing our rate, more borrowers stand a better chance at qualifying,” said Miki Adams, president of CBC Mortgage Agency.

Chenoa Fund’s down payment assistance program does not have income limits and is available for qualifying borrowers with a minimum credit score of 600.

Founded in 2013, CBC Mortgage Agency’s Chenoa Fund program completed more than 40,000 mortgage transactions since its inception, according to its website.

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