How to Get Chenoa Fund Down Payment Assistance | 2025

Unlock homeownership with Chenoa Fund

Dreaming of buying a home but struggling to save for a down payment? You’re not alone. Many aspiring homeowners find that upfront costs are the biggest hurdle to owning a home.

That’s where DPA programs can help. These programs offer grants or loans to cover part—or even all—of your down payment and closing costs.

One well-known option is the Chenoa Fund. This down payment assistance program provides up to 3.5% of your home’s purchase price, potentially covering your entire down payment on an FHA loan.

Not everyone qualifies, though. Keep reading to see if Chenoa Fund assistance could be your key to homeownership.

In this article (Skip to...)

• What is the Chenoa Fund?
• How much down payment assistance is available?
• Who qualifies for Chenoa Fund Assistance
• Chenoa Fund assistance paired with FHA loan
• Chenoa Fund assistance paired with conventional loan
• Chenoa Fund pros and cons
• How to apply for Chenoa Fund assistance
• Alternative forms of down payment assistance

What is the Chenoa Fund?

Chenoa Fund is a nationwide down payment assistance program that aims to make housing more affordable.

That’s especially true for low- to moderate-income buyers, and first-time home buyers. However, the program isn’t limited to these groups. All applicants who meet the minimum requirements and program guidelines may be eligible.

The Chenoa Fund is administered by CBC Mortgage Agency (CBCMA), a federally chartered governmental entity.

How much down payment assistance does Chenoa Fund offer?

Chenoa Fund provides down payment assistance (DPA) between 3.5% to 5% of the buyer’s home purchase price. This aid comes in the form of forgivable or repayable second mortgage loan products.

Borrowers can use Chenoa Fund money with FHA mortgages and Fannie Mae conventional mortgages.

The Chenoa Fund DPA program requires home buyers to work with an approved “correspondent” lender. That means if you hope to receive loan money from the Chenoa Fund, you’ll have to choose your mortgage lender from its list.

“Chenoa Fund is a great way for borrowers to...hold on to their savings for future emergencies, home improvements, or a rainy day.” —Miki Adams, Executive VP, CBCMA

The good news is that these approved lenders are given delegated underwriting authority. That makes it easy for lenders to use Chenoa Fund products.

Also, borrowers who receive this aid can combine it with seller concessions (within FHA guidelines) to help with closing costs.

“Chenoa Fund is a great way for borrowers to keep their savings when buying a home,” says Miki Adams, executive vice president for CBCMA.

“By using down payment assistance, they can hold on to their savings for future emergencies, home improvements, or a rainy day.”

Who qualifies for Chenoa Fund down payment assistance?

If you’re using an FHA-backed mortgage, and want to apply Chenoa Fund down payment assistance, you need:

• A FICO score of 620 or higher
• A debt-to-income ratio of 45% or lower
• And you must meet eligibility requirements for an FHA loan

To qualify for conventional loan DPA (when it returns), you need:

• A minimum FICO score of 640
• A maximum debt-to-income ratio of 50%,
• A second mortgage term of 10 years, and an interest rate not to exceed 2% above the first mortgage.

Thankfully, there are no income limits to qualify for Chenoa Fund assistance on a conventional loan.

Real estate attorney and Realtor Bruce Ailion is a fan of this program.

“The Chenoa Fund is focused on eliminating the obstacle of down payment funds for creditworthy low- to moderate-income peoples,” says Ailion.

Using Chenoa Fund to help buy a home is a “no brainer, especially compared to renting. Almost everyone can buy a home for less than the amount it takes to get into an apartment” —Bruce Ailion, Realtor

“Low- to moderate-income means less than 115% median family income for their area. And creditworthy means you’re able to qualify for an FHA or conventional loan.”

Ailion adds that using Chenoa Fund to help buy a home is a “no brainer, especially compared to renting. Almost everyone can buy a home for less than the amount it takes to get into an apartment with down payment assistance.”

Chenoa Fund DPA paired with an FHA loan

All Chenoa Fund loans may provide 3.5% to 5% down payment assistance. For FHA loans, this assistance must be put towards the down payment (not closing costs).

The neat thing is that FHA loans are available with only 3.5% of the home purchase price down. So a Chenoa Fund loan could potentially cover your entire down payment — leaving you to pay only closing costs out of pocket.

The Chenoa Fund has three different programs that work with FHA loans:

Chenoa Fund Rate Advantage

The Chenoa Fund Rate Advantage is the most popular and successful Chenoa Fund product. It allows borrowers to lock in a competitive rate on their primary mortgage, as well as a 3.5% down payment assistance loan.

The loan has a minimum FICO requirement of 640 and a maximum debt-to-income (DTI) requirement of 50%. The income limit for this program is 115% of the area median income level in the county where the borrower will live. You can find the product brochure here.

Chenoa Fund DPA Edge

The Chenoa Fund DPA Edge is a ‘Soft Second’ mortgage. This option is quite popular among borrowers with lower income, because the funds used for a down payment are forgivable — meaning you typically don’t have to pay the loan back.

Borrowers with a FICO score of 620 or higher and a DTI of 45% or less can receive an interest-free second mortgage that requires no monthly payments. (The DTI requirement increases for higher FICO credit scores.)

This mortgage is forgiven after 36 months. But you have to make on-time payments (not more than 30 days late) on your primary mortgage for the loan to be forgiven.

If a borrower has a late payment, the 36-month period resets, giving the borrower another chance to have the loan forgiven.

Chenoa Fund’s DPA Edge program has an income limit of 115% of the area median income in the county where the borrower will live.

Chenoa Fund Edge Repayable Second

With this option, there are no income limits to qualify for down payment assistance. Borrowers must have a minimum 620 FICO score and DTI maximum of 45% (this DTI requirement increases for higher FICO scores).

The Chenoa Fund Edge Repayable Second loan also comes with two different terms you can choose from: 10 years at 0% interest, or 30 years at 5% interest.

Chenoa Fund DPA paired with a conventional loan

Unfortunately, Chenoa Fund DPA for conventional home loans has been put on hold until further notice.

When it returns, this product will award financial assistance worth 3.5% of the purchase price. Unlike Chenoa Fund’s FHA product, DPA on conventional loans can be used in part for closing costs — but only after the down payment has been fully covered.

Conventional loan DPA from Chenoa Fund is used in conjunction with two Fannie Mae products: its HomeReady Mortgage and its standard conventional 97% LTV mortgage.

Pros and cons of Chenoa down payment assistance

Pros

• Provides both pre- and post-purchase homebuyer counseling and education to support long-term success.
• Includes a Borrower Success Program with monthly check-ins from HUD-approved counselors.
• Self-sufficient program that does not rely on government subsidies, ensuring stability and growth.
• Committed to increasing homeownership opportunities, particularly within underserved communities, such as African American homebuyers through the UHOUSI initiative.
• Offers up to 3.5% down payment assistance, which is more generous than many other DPA programs.

Cons

• Most Chenoa Fund loans must be repaid, except for the DPA Edge Soft Second loan.
• Other DPA programs may offer forgivable loans or grants, so it’s worth exploring all options.
• While repayment may be required, Chenoa Fund’s higher assistance amounts and ongoing counseling could make it a better fit for some buyers.

How to apply for Chenoa Fund down payment assistance

Chenoa Fund is offered through correspondent lenders.

“In other words, borrowers can apply for Chenoa Fund through a Chenoa Fund-approved lender,” Adams notes. “Many borrowers appreciate only needing one point of contact. That helps keep the loan process simple and smooth for them.”

To obtain a list of approved lenders, send an email to info@chenoafund.org.

You can also phone 866-563-3507 to speak with a Chenoa Fund corporate account executive. This person can help you connect with loan officers directly.

Alternative forms of homebuyer down payment assistance

Chenoa Fund programs aren’t the only options for DPA and closing cost aid.

Special programs for first-time buyers and other purchasers are available in every state. Visit the following online resources to search and apply for assistance you may be eligible for:

• Housing finance agencies in all 50 states
• Assistance programs in every state for 2025
• HUD homeownership assistance links
• HUD local homebuying program links
• FHA Down Payment Grants for 2020
• National Homebuyers Fund grants and loans

In addition, “speak to your lender about financing options,” suggests Adams.

“Sometimes a local DPA program might be a better fit than a Chenoa Fund product. It’s always wise to research all options and understand the terms being offered before deciding on a down payment assistance program or opting for DPA at all.”