How it works
The Chenoa Fund is a national DPA program administered by CBC Mortgage Agency, a wholly-owned arm of the Cedar Band of Paiutes, a federally recognized Native American tribe. The program's tribal administration is what allows it to operate under more flexible federal guidelines than state-administered DPAs.
For California FHA buyers, Chenoa fills two specific gaps in the CalHFA/GSFA landscape. First, its income limits on the Soft Second variant reach 135% of AMI — higher than CalHFA MyHome's 80%-100% range. Second, the Repayable Loan variant has no income limit at all, which is meaningful for mid-to-upper-income FHA buyers (think $150K household in Orange County) who exceed every state DPA ceiling.
The Soft Second structure is unusually borrower-friendly. The silent second forgives after 36 consecutive on-time monthly payments. For a borrower with decent cash flow and autopay enabled, this effectively turns into free down payment. For a borrower who has a financial hiccup and misses a payment, the forgiveness clock resets — so Chenoa should only be used when the borrower's monthly budget has comfortable margin.
Chenoa Fund's timing advantage matters in competitive purchase markets. California wholesale lenders who are Chenoa-approved can close a purchase loan in 21-25 days — faster than most CalHFA scenarios, which involve a second-lien recording step that adds calendar days.
Who it's for
FHA buyers who don't qualify for CalHFA or GSFA (above income limits, not first-time) but still need down-payment help.
Eligibility at a glance
- First-time buyer?
- No
- Minimum FICO
- 600
- Maximum DTI
- 50%
- Income limit
- Soft Second (forgivable): household income at or below 115% of AMI (county-specific HUD chart). Repayable Loan: NO income limit.
- Homebuyer education
- Required — Chenoa-approved counseling through an online provider.
Repayment terms
DPA Edge Soft Second: silent second forgiven after 36 consecutive on-time monthly payments on the FHA first mortgage — essentially forgiven after 3 years. DPA Edge Repayable Loan: 10-year amortizing second mortgage at a fixed rate (typically 2-3 points above the first mortgage rate).
Term
10 years
Due at
Forgiven at 36 months (Soft Second) or amortized over 10 years (Repayable)
Property rules
- Eligible property types
- Single-family residence, 2-4 unit, Condo, PUD
- Owner-occupancy required
- Not required
Layering & first mortgage options
Works with these first mortgages: FHA
Chenoa requires an FHA first mortgage (not Conventional, VA, or USDA). It does not stack with other state-level DPA.
Stacks with
Cannot combine with
How to apply
Process: Reserved through a Chenoa-approved lender at FHA lock. Some wholesalers route Chenoa automatically; others require a separate approval.
Funding cycle: Continuous.
Typical timeline: 21-30 days — Chenoa is one of the fastest DPAs in the market.
Things that trip borrowers up
- Forgiveness on the Soft Second requires 36 CONSECUTIVE on-time payments. One late payment resets the clock. Set up autopay at close.
- Chenoa rate premium is built into the FHA first mortgage — typically 0.125%-0.25% above standard FHA.
- Not all wholesale lenders are Chenoa-approved. Verify with the AE before writing an offer.
Frequently asked questions
- Is the Chenoa forgivable loan really free?
- If you make 36 consecutive on-time payments on your FHA first mortgage, the Chenoa Soft Second forgives in full — yes, effectively free. Miss a payment, the clock resets.
- Can we use Chenoa if our income is too high for CalHFA?
- Yes. The Chenoa Repayable Loan variant has no income limit. The Soft Second allows up to 135% of AMI, which is meaningfully higher than CalHFA MyHome.
- Does our lender offer Chenoa?
- Not every wholesale lender is Chenoa-approved. Your broker will verify this at the start of the loan. Elite Fundings' wholesaler panel includes Chenoa-approved investors.