Chenoa Fund Q & A

What is the Chenoa Fund?

Chenoa Fund is an affordable housing program provided through CBC Mortgage Agency (CBCMA), an FHA approved, federally chartered government agency. Our programs are designed to increase access to homeownership for credit-worthy families.

It’s our core belief that everyone in America deserves access to affordable housing and it’s our mission to help make that happen. We provide tools that open doors to home ownership for individuals who have the income and credit history to afford a home, but may lack the ability to accumulate a down-payment. CBCMA partners with reputable mortgage lenders on a Correspondent basis to provide down payment assistance for qualified home buyers in the form of second mortgages.

Home ownership isn’t for everyone—but housing is. While we have minimum credit scores and debt/income ratio restrictions that may put some borrowers out of the reach of our direct assistance. We believe that by assisting credit-worthy families to overcome barriers, we can reduce the competition for “rental” housing, which in turn helps to reduce its cost and increase its availability for those we cannot assist directly.

How does the Chenoa Fund help buyers overcome that barrier?

Under our program, buyers who meet our eligibility criteria may receive a second mortgage to cover their 3.5% minimum down payment requirement when purchasing an FHA-insured home or the 3% minimum down payment required on a conventional loan. We believe that by helping responsible home buyers meet that minimum investment required for a mortgage, we create healthier communities by improving the balance between homeownership and other housing types.

Why can’t people just save up for a down payment and wait to buy?

Many people do manage to purchase a home by saving for a down payment over a period of years, and perhaps borrowing from relatives. But increasing home prices and stagnant or low wages can make this difficult, causing many other Americans to lack the earning power to reach that home buying mark. As a result, they have no way to break into homeownership and reap its economic benefits for themselves and their children, so they are stuck. We believe in helping people buy now (if they credit qualify), so they can begin building up equity today.

Is down payment assistance risky?

Not at all. The CBC Mortgage Agency, which offers the Chenoa Fund program, is an approved government lender and strictly adhere to all FHA guidelines. The Chenoa Fund also seeks to work with borrowers who are qualified and capable of undertaking homeownership. For one thing, borrowers must meet our minimum credit score, which is higher than the credit score allowed by FHA. In an effort to minimize risk to the FHA insurance fund, we also provide pre-purchase homebuyer education to those who need it and education and counseling for all borrowers during their first year of homeownership. In addition, because borrowers who use our program are able to keep what savings they have, they are better able to handle unexpected costs during the critical first years of homeownership.

What kind of support do borrowers receive when using the Chenoa Fund program?

As a governmental entity, CBCMA is invested in the success of the borrowers utilizing its Chenoa Fund program. CBCMA takes great care in not just making sure that borrowers can qualify for a home, but that they become successful long-term homeowners. Borrower’s needed extra support receive pre-purchase counseling and all borrowers are given outreach and counseling for the first 12 months after the purchase of their new home to help them to successfully navigate the challenges of owning a home, many for the first time.

What difference can homeownership really make to the Chenoa Fund borrower?

As a homeowner you may experience benefits such as…

Predictable monthly housing payments. Renters experience an average 3.5% increase in rent each year. Landlords can raise rent whenever a lease expires. It’s not uncommon for renters to be priced out of rentals. As a homebuyer, you are able to secure a predictable mortgage payment (i.e., principle and interest) for up to 30 years. The principal payment builds equity.

Savings and Equity. Most homeowners are more able to accumulate savings that are available for family emergencies to saving for a child’s education and ensuring a secure retirement. When you own your home, chances are your equity will grow overtime. Conversely, families forced to sink a large proportion of their income into rent struggle to build savings, a reality that leaves many in a precarious financial situation.

Tax benefits. With all the change in tax laws, interest from a home mortgage is still deductible for the vast majority of new homeowners.

Ability to make the home your own. As a homeowner, you are able to make the home uniquely yours. Paint a wall, change the carpet, add a cabinet, hang a picture where you want. With rentals, it at the discretion of the landlord of what you can and can’t do.

More affordable monthly payments. According to a 2017 RealtyTrac study, in 66% of the markets studied it is more affordable to buy than to rent. Sure, there’s the upfront cost of the down payment and closing costs, but Chenoa Fund can help with the down payment.

Community connections. When you own a home, you are more likely to become invested in the community, caring about how your taxes are invested in neighborhood’s, schools and organizations. You plant roots, make friends, and share experiences cheering for your child’s teams or simply talking with your neighbor about the simple pleasures of the day. This sense of community results in healthier children, lower crime, and improved neighborhoods.

Are there social benefits that come with owning a home?

Yes. In 2017 the National Association of Realtors released a study entitled, “Social Benefits of Homeownership and Stable Housing,” findings revealed that...

Homeowners are generally in better health condition than those of renters.

Increases in housing wealth were associated with better health outcomes for homeowners.

Low-income people who recently became homeowners reported higher life satisfaction, higher self-esteem, and higher perceived control over their lives. For example, homeowners are more likely to believe that they can do things as well as anyone else, and they report higher self-ratings on their physical health even after controlling for age and socioeconomic factors.

Renters who become homeowners not only experience a significant increase in housing satisfaction but also obtain a higher satisfaction even in the same home in which they resided as renters.

Social mobility variables, such as the family financial situation and housing tenure during childhood and adulthood, impacted one’s self-rated health.

Homeowners have a significant effect on their children’s success. The decision to stay in school by teenage students is higher for those raised by home-owning parents compared to those in renter households.

Students from low- and middle-income families are much more likely to enroll in college when their families experienced gains in housing wealth.

What is the state of homeownership in our country today?

Unfortunately, homeownership rates fell precipitously over the last ten years, and the decline was steepest among minority households, young adults and single-parent households. Overall, the national homeownership rate dropped from a peak of 69% in 2004 to just over 63% in 2016. One key factor was the loss of 9.4 million homes in the foreclosure crisis from 2007 through 2015. Following the crisis, many lenders dramatically tightened access to safe and affordable mortgages, restricting households with moderate credit scores from buying homes. Another key factor influencing lower homeownership rates has been the rise in student debt, which has eroded the home-buying power of young people. Minorities are hardest hit, with homeownership rates significantly lower than the majority population, which leads to increased wealth disparity. We aim to reverse these trends by lifting minority communities out of poverty into homeownership.

Q: Is homeownership still considered an important part of the American Dream?

A: A New York Times/CBS poll conducted in mid-2011 asked respondents that very question, and 89 percent said it was either “very” or “somewhat” important. The poll also asked renters in the survey whether they would prefer to continue renting or buy a home someday, regardless of whether they thought they could afford it. A full 85 percent said they would like to own a house someday, so it’s clear that homeownership remains a compelling goal for most Americans.

How is the Chenoa Fund connected with the Cedar Band of Paiute Indians?

The Chenoa Fund is operated by the CBC Mortgage Agency, which is a subsidiary of the Cedar Band Corp. The Cedar Band Corp. is a federally chartered tribal corporation founded by the Cedar Band of Paiutes, a Utah-based tribe.

Does the tribe benefit from these companies?

Definitely. Cedar Band Corp. is an important source of revenue for the Cedar Band tribal government, allowing it to perform essential governmental functions. Because of the Cedar Band Corp., the Cedar Band is able to provide a wide range of socioeconomic programs such as anti-drug education programs in schools, elder care programs, scholarships to help with college tuition, housing and books, support for tribal members’ medical and dental care, grants to help tribal members purchase homes and job opportunities for tribal members.

Chenoa Fund

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