Quick Answer
Chenoa Fund is a nationwide down payment assistance program administered by CBC Mortgage Agency. It provides 3.5% or 5% of the loan amount as DPA, with a forgivable option that is forgiven after 36 on-time payments. There are no income limits and no first-time buyer requirement. Available in all 58 California counties through CBC-approved lenders.
Does Chenoa Fund Work in California?
Yes. Chenoa Fund is a nationwide program with no geographic restrictions within the United States. Every county in California is eligible, from high-cost metro areas like Los Angeles, San Francisco, and San Diego to lower-cost inland and rural counties.
Because Chenoa Fund pairs with FHA financing, the maximum loan amount follows FHA county loan limits. In California, those limits range from roughly $530,150 in lower-cost counties to $1,209,750 in high-cost counties. Your 3.5% or 5% assistance amount is calculated based on the loan amount within those limits.
What Is Chenoa Fund?
Chenoa Fund is a down payment assistance program administered by CBC Mortgage Agency (CBCMA), a Community Development Financial Institution (CDFI) chartered by the Cedar Band of Paiutes. It was created to expand homeownership access for buyers who can afford monthly payments but lack liquid savings for a down payment.
The program works by layering a second mortgage on top of an FHA first mortgage originated through CBC. The second mortgage covers 3.5% of the purchase price (the minimum FHA down payment) or 5% for additional closing cost help. The buyer does not need to bring any down payment funds to closing.
Chenoa Fund offers two distinct assistance structures. The forgivable option (Rate Advantage) carries a slightly higher first mortgage rate but the second lien is forgiven after three years. The repayable option (DPA Edge) has a lower first mortgage rate but requires monthly payments on the second lien. Both options use FHA financing exclusively.
Who Uses Chenoa Fund in California?
Chenoa Fund is especially popular in California because it fills a gap that state-run programs leave open. The most common California buyer profiles include:
- Higher-earning buyers who exceed CalHFA income limits. CalHFA caps household income at 80-150% of Area Median Income. In expensive metros like the Bay Area or Los Angeles, dual-income households often exceed those thresholds even on moderate salaries. Chenoa Fund has no income ceiling.
- Buyers with credit scores between 580 and 659. CalHFA requires a minimum 660 credit score. Chenoa Fund's forgivable option starts at 580, making it one of the few DPA programs accessible to borrowers rebuilding credit.
- Repeat buyers. Most CalHFA programs require first-time homebuyer status. Chenoa Fund does not, which opens the door for buyers who have owned before but need DPA for their next purchase.
- Buyers who want the simplest path to zero down. The 3.5% forgivable option covers exactly the FHA minimum. There is no separate grant application or additional layered program. One lender, one application, one closing.
Chenoa Fund Assistance Options
Chenoa Fund offers two assistance structures. The right choice depends on your credit score, how long you plan to stay in the home, and whether you prefer a lower rate or forgiveness of the DPA.
Option 1: Rate Advantage (Forgivable)
Soft second mortgage, forgiven after 36 months
Assistance Amount
3.5% or 5% of loan amount
- How it works: A second lien at 0% interest with no monthly payments. Forgiven entirely after 36 consecutive on-time first mortgage payments.
- Credit score: 580 minimum. A rate premium applies on the first mortgage at lower credit scores.
- Trade-off: The first mortgage rate is higher than the repayable option (the DPA cost is built into the rate). Over a 30-year term, this can add up. Best for buyers who plan to stay at least 3 years and want the DPA wiped clean.
- If you sell or refinance before 36 months: The second lien balance becomes due. It is not prorated.
Option 2: DPA Edge (Repayable)
Amortizing second mortgage, 10- or 30-year term
Assistance Amount
3.5% or 5% of loan amount
- How it works: A standard second mortgage with monthly payments amortized over 10 or 30 years at a fixed interest rate.
- Credit score: 620 minimum. More competitive first mortgage pricing compared to the forgivable option.
- Trade-off: Lower first mortgage rate, but you carry a monthly payment on the second lien. Best for buyers with stronger credit who want the lowest total cost over time, especially if they plan to refinance later.
- 10-year vs 30-year: The 10-year term has higher monthly payments but pays off faster. The 30-year term keeps payments lower.
How Chenoa Fund Works in California's Market
California's high home prices and income diversity make Chenoa Fund particularly relevant. Here is how the program interacts with the realities of buying in this state.
FHA Loan Limits Drive the Assistance Amount
Your Chenoa Fund assistance is a percentage of the FHA loan amount, not the purchase price. In high-cost counties like San Francisco, Santa Clara, and Los Angeles, FHA limits reach $1,209,750. At 3.5%, that translates to over $42,000 in down payment assistance. In lower-cost counties where FHA limits sit closer to $530,150, the 3.5% option provides roughly $18,500.
No Income Limits vs. CalHFA's Caps
CalHFA remains the go-to DPA source for many California buyers, but its income limits disqualify a significant portion of the market. In San Francisco, a household earning $200,000 may exceed CalHFA's 150% AMI threshold while still struggling to save $80,000 for a down payment. Chenoa Fund has no such cap. If you qualify for an FHA loan, you qualify for Chenoa Fund.
The Rate Premium: An Important Trade-off
Chenoa Fund is not free money. The forgivable option comes with a first mortgage rate that is typically 0.5% to 1.0% higher than what you would get without DPA. On a $500,000 loan, an extra 0.75% in rate adds roughly $250 per month. Over 36 months until forgiveness, that is about $9,000 in extra interest for $17,500 in DPA. You should compare the total cost to alternatives. CalHFA and GSFA may offer lower rates, but their eligibility restrictions mean many buyers cannot access them.
All 58 Counties Are Eligible
Unlike some local programs that are restricted to specific cities or counties, Chenoa Fund covers every corner of California. Whether you are buying in Sacramento, Bakersfield, San Diego, or a small town in the Sierra Nevada, the program is available as long as you work with a CBC-approved lender.
Chenoa Fund vs CalHFA vs GSFA in California
California buyers typically have three major DPA options. Here is how they compare on the criteria that matter most.
| Feature | Chenoa Fund | CalHFA | GSFA |
|---|---|---|---|
| Income Limits | None | 80-150% AMI | Varies by program |
| Min Credit Score | 580 (forgivable) / 620 (repayable) | 660+ | 640+ |
| First-Time Buyer Required | No | Most programs: Yes | Varies |
| Max Assistance | 3.5-5% of loan | Up to $150K (Dream For All) | Up to 5% of loan |
| Forgivable Option | Yes (36 months) | Yes (FEBL, Dream For All) | Yes (select programs) |
| Loan Type | FHA only | FHA, Conv, VA | FHA, Conv, VA, USDA |
| Rate Impact | Higher (DPA built into rate) | Competitive market rates | Moderate premium |
When Chenoa Fund is the better choice
You earn too much for CalHFA. Your credit score is below 660. You are a repeat buyer. You want a simple, single-program solution with a clear forgiveness timeline.
When CalHFA or GSFA may be better
You qualify for their income limits and credit requirements. You want access to conventional or VA financing. You want a lower interest rate on the first mortgage. You want the larger assistance amounts available through Dream For All or FEBL.
How to Apply for Chenoa Fund in California
You cannot apply for Chenoa Fund directly. The process goes through a CBC Mortgage Agency-approved lender who originates both the FHA first mortgage and the Chenoa Fund second lien.
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1
Check Your Eligibility
Use our free eligibility tool to see if Chenoa Fund matches your situation. Enter your county, income, and target home price.
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2
Find a CBC-Approved Lender
Not every mortgage lender offers Chenoa Fund. You need a lender approved as a CBC Mortgage Agency correspondent. Ask specifically whether they originate Chenoa Fund loans, and whether they offer both the forgivable and repayable options.
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3
Complete Homebuyer Education
Chenoa Fund requires a HUD-approved homebuyer education course. Online options through eHome America and Framework are accepted. This must be completed before closing.
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4
Choose Your Assistance Option
Work with your lender to compare the forgivable Rate Advantage and repayable DPA Edge options. Run the numbers on total cost over your expected holding period. If you plan to stay 3+ years, the forgivable option often makes sense. If you plan to refinance sooner, the repayable option with its lower rate may save more.
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5
Get Pre-Approved and Find a Home
Your lender structures the Chenoa Fund DPA into your FHA loan package. The property must be a primary residence (1-4 units) and meet FHA property standards. Condos must be on the FHA-approved list.
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6
Close and Move In
The Chenoa Fund DPA is disbursed at closing alongside your FHA first mortgage. There is no separate closing or additional paperwork beyond what your lender handles.
Frequently Asked Questions
Does Chenoa Fund work in California?
Yes. Chenoa Fund is a nationwide program with no geographic restrictions. It is available in all 58 California counties, from Los Angeles and San Francisco to rural counties like Modoc and Inyo.
How much down payment assistance does Chenoa Fund provide?
Either 3.5% or 5% of the loan amount. The 3.5% option covers the entire FHA minimum down payment. At California's FHA limits, this can range from roughly $18,500 in lower-cost counties to over $42,000 in high-cost counties.
Is the Chenoa Fund assistance forgivable?
One option is. The Rate Advantage program is a soft second mortgage at 0% interest, forgiven after 36 consecutive on-time first mortgage payments. The DPA Edge program is a repayable second amortized over 10 or 30 years.
What credit score do I need?
The forgivable Rate Advantage option requires a 580 minimum, though a rate premium applies at lower scores. The repayable DPA Edge option requires 620 minimum with more competitive pricing.
Does Chenoa Fund have income limits?
No. This is one of its biggest advantages in California, where high costs of living push many households above CalHFA's income caps. If you qualify for an FHA loan, you can use Chenoa Fund regardless of how much you earn.
Do I have to be a first-time homebuyer?
No. Chenoa Fund is available to both first-time and repeat buyers. This is a key difference from CalHFA, where most programs require that you have not owned a home in the past three years.
What happens if I refinance before 36 months?
If you chose the forgivable Rate Advantage option and refinance before making 36 consecutive on-time payments, the second lien balance becomes due. It is not prorated. You would need to pay off the full DPA amount at refinance.
Is the Chenoa Fund interest rate higher than market?
Yes, particularly for the forgivable option. The DPA cost is built into the first mortgage rate. Expect the rate to be roughly 0.5% to 1.0% above what you would get on a standard FHA loan. The repayable option has a lower first mortgage rate but adds a monthly second lien payment.
Can I use Chenoa Fund with a conventional loan?
No. Chenoa Fund works exclusively with FHA financing originated through CBC Mortgage Agency. If you want conventional loan DPA, look into CalHFA's MyHome or GSFA programs instead.
How do I find a Chenoa Fund lender in California?
Ask your loan officer whether they are an approved CBC Mortgage Agency correspondent. You can also contact CBC directly through the Chenoa Fund website for a referral to an approved lender in your area.
Related Pages
See If You Qualify for Chenoa Fund in California
Enter your county, income, and home price to check Chenoa Fund eligibility alongside other California DPA programs. Free tool, no signup required.
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