Chenoa Fund DPA FHA Loans
- Chenoa Fund DPA for FHA loans provides one product that offers both a repayable and forgivable option. All products require a minimum credit score of 600.
- Repayable This loan has an interest rate of 2% higher than that on the FHA mortgage first mortgage. It is available for a term of 10 years. The second mortgage will require a monthly payment.
- The loan is forgiven It has a term of 30 years with an interest rate at 0% (0% APR). The second mortgage does not have to be paid monthly. The DPA amount determines whether forgiveness is possible.
- 3.5%: After 36 consecutive on-time payments to the FHA mortgage first mortgage, forgivable. If the borrower defaults on a payment, the forgiveness period is reset. However, the borrower still has 30 years to fulfill the forgiveness conditions. If the previous forgiveness condition is not met, the loan can be forgiven at end of 30-year term.
- After 120 consecutive on-time payments of the FHA mortgage first mortgage, 5% is forgiven. If the borrower makes a payment more than 60 days late, the forgiveness period ends. However, the loan will continue with a 30-year term, 0% interest (0% APR) and no monthly payments.
If the previous forgiveness conditions are not met, both forgivable loan options can be forgiven at 30 years. This includes borrowers who have made late payments on their FHA mortgage first mortgage. If the loan is not forgiven, it will have to be repaid at transfer of ownership or refinance.
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