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Chenoa Fund Program
03/20/18
Chenoa Fund Program
Disclaimer
While every effort has been made to ensure the reliability of the webinar content, PRMG’s product profiles and their updates, are the official statements of PRMG and in the event of discrepancies between the information in this webinar and the product profiles, the product profiles will always supersede the information provided here.
Chenoa Fund Program
FHA 30 Year Fixed First Mortgage
Chenoa Fund Program
Chenoa Fund Program
Retail Channel Only
Loans referred to AFS Division
Release date: February 1, 2017
Chenoa Fund Program
Down Payment Assistance Chenoa Gift
• Up to 3.5% of the adjusted value of the property.
• Available to borrowers whose income is 115% AMI or less
• Not Available as of 4/5/18
Chenoa Soft Second Forgivable DPA
• Up to 3.5% of the adjusted value of the property
• Available to borrowers whose income is at 115% AMI or less
• No monthly payments, the loan will be forgiven after the borrower has made 36 monthly payments on the First Mortgage.
Chenoa Repayable Second 30-Year DPA
• Up to 3.5% of the adjusted value of the property
• Available to borrowers whose income exceeds 115% AMI
• 5% interest amortized monthly payments over a 30-year period
Chenoa Fund Program
Program HighlightsProgram is available in all states except
NY, SD (See Product Prfile for possible updates)
30 year fixed
Credit score 620
Purchase, Primary Residence
Single Family Residences, PUD and Warrantable Condos
Chenoa Fund Program
Loan Parameters
No minimum loan amount
The maximum loan amount is the lesser of $424,100 or the particular county’s maximum HUD loan limit.
Chenoa Fund Program
Borrower Requirements
First time and non-first time homebuyers
All borrowers must occupy the property as their primary residence within 60 days of closing
Homebuyer education is not required
Borrower may own another property at close of escrow
Chenoa Fund Program
Program Fees and Documentation
Origination points and non-bona-fide discount points
are not allowed
Standard PRMG Underwriting and Processing Fees to be charged
Chenoa requires a soft credit pull or credit monitoring for all three credit
bureaus within 10 days of closing
Chenoa Fund Program
Appraisal Requirements
• One full appraisal is required
Chenoa Fund Program
Maximum Program Compliance Income Limits:
• Borrowers whose qualifying income is less than or equal to 115% of AMI can receive the gift or soft second. Borrowers whose qualifying income exceeds 115% of AMI must use the repayable second
• Income used towards limits include only the qualifying income of the occupying borrower(s). In other words, whatever income on 1003 for any borrower occupying the property would be used. If there is a non-occupying borrower than that income is not counted toward the income
Chenoa Fund Program
MCCs:
• MCCs can only be used if the entity providing the MCC will allow CBC Mortgage Agency to purchase the FHA insured first mortgage.
• MCCs can be added to Gross Income
• PRMG does allow MCCs to be used to reduce payments
Please Note: For additional information on MCCs please refer to program guidelines
Maximum Program Compliance Income Limits:
1. Log into HUD Area Median Income Site:1. https://www.huduser.gov/portal/datasets/il.html
2. Select the most recent fiscal year
3. Select button under Access Individual Income Limits Areas (Click Here for FY 20XX IL Information)
4. Select the state and county
5. Determine the generic median income number (located on the left hand side of the results screen under the column heading Median Income), do not be concerned with income listed in the columns based on the number of persons in family.
6. Multiply Median Income result by 115% to determine limit
• A worksheet to calculate 115% of median income can be found in the Resource Center
• http://www.eprmg.net/ResourceCenter/bondhousingauthoritydpaproducts/Chenoa%20Fund%20AMI%20Calculator.xlsx
Chenoa Fund Program
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First Lien AUS Requirements
• Desktop Underwriter (DU) only allowed• Approve/Eligible required• The Agency AUS for the first lien must be included in the file• Manual Underwriting is not allowed• Loan Product Advisor (LPA) not allowed
Chenoa Fund Program
Completing the 1003 with a Gift (Not Available as of 4/5/18)
• On page 1 of the 1003 form, select the following gift options from the Source of Down Payment dropdown:
1. FHA – Gift – Source Government Assistance
2. For the Explanation of Down Payment, Enter CBC Mortgage Agency
• Please review the DU and verify the Source of Down payment, explanation of down payment and amounts are correct in the Terms & Property section
• In the Assets Section please ensure the Asset Type is Gift and the cash value amount is correct
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Chenoa Fund Program
Completing the 1003 with a Gift (Not Available as of 4/5/18)
• On page 2 of the 1003 form, enter the following information VOD Screen
• Name: CBC Mortgage Agency
• Balance: Enter the Amount of the Gift in the balance field600N100E
CedarCity,UT84721
Tax ID # 46-2780478
2/17/16
Donor: CBC Mortgage Agency Borrower(s):
600 N 100 E
Cedar City, UT 84721
866 563-3507 FHA Case #:
Gift Amount:
CBC Mortgage Agency is a governmental agency operating Chenoa Fund, a program that provides homeownership
assistance to low-and moderate-income families through a gift for the down payment (Minimum Required Investment
or MRI). Funds provided to the borrower under the Chenoa Fund are a bona-fide gift to the borrower and must be
used to purchase the property located at:
0
,
With a purchase price of: -$
The entire amount of the gift must be utilized towards the purchase of the property referenced above and may not
result in cash back to the borrower(s) (except to reimburse borrower(s) for verified funds the borrower(s) has all
ready paid such as earnest money, appraisal fees, credit report fees, etc.).
In accordance with the procedures outlined in Mortgagee Letter 2013-14, CBC Mortgage Agency, with this document,
has incurred a legally enforceable obligation to provide the funds towards the borrower(s)’ MRI. The 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 have been 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, Borrower Acknowledgment
X
RichardFerguson
President
CBCMortgageAgency
X
$0.00
Gift Letter and Funding Obligation
Chenoa Fund Program
Completing the 1003 with a Gift (Not Available as of 4/5/18)
• Complete the VOD fields as follows:
1. Enter the name of the agency followed by GIFT FUNDS in the name of Depository field
2. Select the Gifts Not Deposited option from the Account Type dropdown
3. Enter the reservation number in the Account Number field
4. Enter the amount of the gift in the Balance field
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Chenoa Fund Program
Entering Gift as a File Contact (Not available as of 4/5/18):
• The applicable agency must be indicated in the File Contacts section on the Tools tab
1. In locate the tools tab and select file contacts
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Chenoa Fund Program
Entering Gift as a File Contact (Not available as of 4/5/18):
• Locate a Custom Category
1. Select one of the Custom Category options available
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Chenoa Fund Program
Entering Gift as a File Contact (Not available as of 4/5/18):
• Access PRMG’s business contact list by clicking on the lookup icon
1. Select the Down Payment option from the Category dropdown list
1
Chenoa Fund Program
Entering Gift as a File Contact (Not available as of 4/5/18):
1. Locate the applicable agency and click on Select to update the main File Contact page
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Chenoa Fund Program
Closing Disclosure Gift Requirement (Not Available as of 4/15/18):
1. The amount of the gift must be indicated in Section L on page 3 of the Closing Disclosure this is an agency requirement
2. All Final CDs are sent to the agency before closing
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Chenoa Fund Program
Entering Subordinate Financing on the 1st TD if required:
• Forms -> Borrower Summary
1. Click the Sub. Financing Button2. Enter your 2nd Mortgage amount in
the second mortgage field3. Click OK
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Chenoa Fund Program
Lien Position and Down Payment:
• Forms -> Borrower Summary
1. Verify the lien position is correct for both the first and additional loans
2. Down Payment is the down payment in addition to the subordinate financing being utilized to complete the purchase
3. Verify the Subordinate Financing appears in VII details of Transaction
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Chenoa Fund Program
1003 Page 1 (Borrower Information)
• Borrower phone number must be completed
CBC Mortgage Agency has partnered with Hope Loan Port, a HUD approved counseling agency, to provide borrowers with information, free counseling, and support after the borrowers have received their home loans in order to help borrowers better understand how and when their loan will be sold, let them know to whom they need to make their payments for which month, and to reassure them that none of their loan terms will change. They will also be available for counseling if borrowers encounter challenges or need help understanding the responsibilities of homeownership at no cost to them. In order to ensure all of our borrowers have a positive experience and to avoid the confusion that has resulted in the past from the multiple loan transfers after home purchase, CBCMA will need contact phone numbers for all borrowers prior to issuing closing documents.
CBCMA will not issue a Funding Obligation Letter until they have a valid phone number, so if your 3.2 file does not contain the borrower’s phone number, their staff will be reach out to you to get this number.
Chenoa Fund Program
1003 Page 3 (VIII. Declarations):
• When completing the declarations section of the 1003 locate question H
1. Question H: Mark Y (Yes) for is any part of the down payment borrowed for borrower and co-borrower
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Chenoa Fund Program
Completing DU:
• Prior to running DU please verify
• Section 2 Terms & Property information are correct • Section 5 Assets information is correct
• Reflect the amount and subordinate financing information are properly filled and carried over from FT360
1. Process your DU findings
Chenoa Fund Program
Duplicating a loan for Subordination if Required:
1. Right mouse click on the loan you wish to duplicate
2. In the options menu select Duplicate Loan
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Chenoa Fund Program
Duplicating a loan for Subordination if Required:
• You are presented with three different duplication options:
➢ Duplicate the selected Loan➢ Create a second lien using the
data from the selected loan➢ Create a second lien linked as a
piggyback using the data from the selected loan
1. Select the folder where you would like the Duplicate Loan to reside
2. Click OK
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Chenoa Fund Program
Verifying a Lien Position and Down Payment on a Subordination if required:
• On the newly duplicated loan verify the Lien Position and Down payment information is correct
• Forms -> Borrower Summary
1. Verify the lien position is correct for both the first and additional loans
2. Down Payment is the down payment in addition to the subordinate financing being utilized to complete the purchase
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Chenoa Fund Program
Mavent Compliance:
• Subordinate financing may cause Mavent to Fail
• Support has access to the ATR/QM Eligibility screen which bypasses Mavent provided the circumstances are allowed
Chenoa Fund Program
Chenoa Fund Repayable/Silent Second:
• Qualifying Income > 115% AMI
• 30-Year term 5% interest rate
• Requires monthly payment
• Payment must be included in housing ratio
• Borrower must indicate down payment borrowed in declarations section of 1003 (question H)
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
Chenoa Fund Program
Chenoa Loan Process Details• In Optimal Blue Locate the Chenoa 30 Year
FHA fixed loan program and follow normal lock procedures locating the target rate and desired lock days (your loan is not locked until secondary completes the process with Chenoa)
1. Complete the Chenoa Loan Registration Lock Request Form and send it to [email protected] This form will need to be completed in its entirety
2. If registering and floating lock only mark the check box located on top of the PDF form
Special note: This form can be located in the resource center under: Chenoa Registration / Lock Request Form. Once completed Secondary will email information to Chenoa
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Chenoa Fund Program
• Secondary will export the FNMA 3.2 files sending them to directly to Chenoa
• Secondary will receive the following items from Chenoa:
1. Rate Lock Form2. Funding Obligation Letter3. Loan Estimate (LE)4. Doc Request form (for use by closing)5. Printable PDF initial disclosures (these
must be sent to borrower by email along with FT360 1st mortgage disclosures during initial disclosure process by PRMG LO or Processor by secure email. DO NOT WAIT UNTIL THE 3rd BUSINESS DAY to request or complete this)
6. Disclose 1st and Second together
• Secondary will email you items above in addition to placing a copy inside the eFolder for each loan respectively
Special Note: This is how initial disclosures for the 2nd
mortgage must be obtained (applies when not utilizing Chenoa gift option) and the disclosures must be sent to borrower by loan officer.
Special Note: If disclosures are requested before 4:00 PM MST turn times from Chenoa are 2 hours. DO NOT WAIT UNTIL 4:00 PM MST. If locking locks must be submitted to secondary prior to 1:00 PM PST
1st eFolder Place Holders1. Chenoa Lock Registration2. Chenoa Documents
2nd eFolder Place Holders1. Chenoa Lock Registration2. Chenoa Documents
Chenoa Fund Program
Docs/Closing
IF THERE IS A VALID CHANGE OF
CIRCUMSTANCE ALL FILES
CONNECTED TO THIS TRANSACTION
WILL NEED TO BE REDISCLOSED. ONCE
THE CHANGE HAS BEEN MADE BY YOU
IN ALL LOANS EMAIL SECONDARY FOR
UPDATED CHENOA DISCLOSURE
DOCUMENTS TO BE PROVIDE TO
YOUR BORROWER
Chenoa Mortgagee Clause
Chenoa Fund Program
1st and 2nd TD:PARAMOUNT RESIDENTIAL MORTGAGE GROUP, INC.,
ITS SUCCESSORS AND/OR ASSIGNS 1265 CORONA POINTE COURT, SUITE 301
CORONA, CA 92879 Loan # _____________
Chenoa Title Policy
Chenoa Fund Program
You do not need a title policy for the second TD
Logging into Chenoa Fund Client Site Post Closing Only:
• Accessing the Chenoa Fund Login Page
• https://www.mrn3.com/Client/Chenoa.asp?loannumber=&jobid=&CLDD_loan=Click Loan Application and Process
1. Enter your email address
2. Enter Your Password
3. Click Logon
Chenoa Fund Program
Logging into Chenoa Fund Client Site:
1. After the loan closes, using the proper Stacking Order, Post Closing uploads the credit file and closing packages (including the Collateral Package*) into the Client Portal. To login to the Client Portal, you will need to contact us for credentials or complete the form to the left
2. Originator sends the Collateral Package (including an Allonge endorsing note to CBCMA) to Originator’s warehouse bank
3. Originator pays the FHA insurance fee and requests an FHA insurance endorsement. Evidence is uploaded by Originator into the Client Portal
4. The Mortgage Loan is underwritten and conditions sent to Originator
5. The Collateral Package* is sent to Chenoa Funds’s warehouse bank from Originator’s warehouse bank.
6. Any conditions are uploaded into the Client Portal for review.
7. Chenoa Fund provides purchase and reimbursement advice to Originator.
8. Chenoa Fund wires funds to Originator’s warehouse bank
9. Originator sends a Goodbye letter to borrower and transfers MERS to Chenoa Fund
10. Upon endorsement, Originator transfers the FHA Case Number to Chenoa Fund
Chenoa Fund Program
Loan Cancellation
Cancel Reservation
Notify Secondary
FT360
• Cancel email [email protected]
• Email Secondary cancellation request
• Upload cancellation request into FT360
Chenoa Fund Program
Homebuyer Advantages
DPA
Not restricted to
first time homebuyers
Credit score as low as
620
May be layered with
Mortgage Credit
Certificate
Chenoa Fund Program
Realtor® or Lender Advantages
Ability to offer DPA options
Flexibility of financing
More qualified borrowers=More closed
loans
Increase in referrals
Dream of homeownership a
reality
Chenoa Fund Program
Resources
• Chenoa Fund Training Material is available in the PRMG University Training Portal.
• Chenoa Fund Product Profile is available in the Resource Center under Product Profiles
• Other Resources: • Chenoa Program Guidelines:
http://chenoafund.org/originators/hearing/
Chenoa Fund Program
Marketing Material
PRMG Marketing Department
Chenoa Fund Program
