Chenoa Guide
How Does Chenoa Fund Work?
From pre-qual through closing, Chenoa layers a second mortgage on your FHA 203(b) first loan — delivering 3.5% or 5% toward down payment or closing costs via a forgivable or repayable structure.
From Pre-Qual to Closing
Four milestones every Chenoa-assisted purchase follows.
01
Pre-qualification & product match
Ryan and Steve pull credit, verify income and assets, and confirm an FHA 203(b) first loan. They simultaneously screen Chenoa 3.5% vs 5% and forgivable vs repayable structures.
02
Dual approval — first & second lien
Your FHA 203(b) loan goes through standard underwriting while Chenoa second-lien docs are prepared. Both approvals must clear before you can lock and schedule closing.
03
Education & final conditions
If required, you complete a HUD-approved homebuyer education course. Remaining conditions — appraisals, insurance, title — follow the same path as any purchase.
04
Closing & assistance disbursement
At closing, Chenoa assistance funds apply toward your down payment and/or closing costs. You sign both the first mortgage and Chenoa second-lien note, then begin your first-mortgage payment schedule.
3.5% vs. 5% Pathways
The assistance percentage depends on how much help you need at closing on your FHA 203(b) purchase.
3.5%
The most common pairing with FHA 203(b). On a $350,000 home, that is $12,250 — enough to cover FHA's minimum down payment so you may bring little or no cash to closing.
Also used when you need help offsetting FHA closing costs after the 3.5% down is covered.
5%
Higher assistance for buyers who need more help at the table. On a $400,000 home, 5% equals $20,000 toward down payment or closing costs.
Often used when FHA closing costs would otherwise drain your reserves after the minimum down payment.
DPA Edge vs. Rate / DPA Advantage
Your second-lien structure determines whether you make monthly Chenoa payments and when assistance is forgiven.
Forgivable
DPA Edge
- 0% interest — no interest charged on assistance
- No monthly payment on the Chenoa second mortgage
- Forgiven after 36 consecutive on-time first-mortgage payments
Repayable
Rate Advantage / DPA Advantage
- 10-year fixed repayment term
- Fixed, competitive interest rate at origination
- Monthly Chenoa payment alongside your primary mortgage
Keep Exploring
Related Chenoa guides and loan programs to compare before you apply.
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The 2 Mortgage Guys
Ryan Minick and Steve DeLon — Branch Managers & Senior Loan Officers at Luminate Bank. Based in Kokomo, Indiana. Lending nationwide since 2005.
Contact
Ryan Minick NMLS# 203249
Steve DeLon NMLS# 202876
Luminate Bank NMLS# 1281698
Kokomo's Mortgage Team. Lending Nationwide.
1221 Appletree Lane, Kokomo, IN 46902
Luminate Bank NMLS 1281698 Bank Headquarters 2523 S. Wayzata Blvd., Suite 100 Minneapolis, MN 55405 (952) 939-7200. This is not an offer to enter into an agreement. Information provided is outlining the minimum down payment requirements as allowed by specific loan program and product guidelines and any information, rates and programs are subject to change without prior notice and may not be available in all states. All loans are subject to credit and property approval. Luminate Bank is not affiliated with any government agency. All rights reserved.
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