Buying a Home
Chenoa Fund Down Payment Assistance
How Chenoa Fund second mortgage assistance pairs with FHA financing, the repayable and forgivable structures, and how it compares to state assistance.
Updated 2026-08-21| Applies to: Buyers using FHA financing who need assistance and may not fit state program limits.
The short answer
Chenoa Fund is a down payment assistance program administered by a governmental entity that provides a second mortgage alongside eligible FHA financing. It is typically structured as either a repayable second with its own payment or a forgivable second tied to on time payment history and occupancy. It is often useful for buyers who exceed state program income limits.
Why it exists alongside state programs
State agency assistance often has firm income and price limits. Chenoa style programs fill gaps for buyers who earn slightly too much for a state program, or who need a structure that behaves differently at resale or refinance.
The two common structures
| Structure | Payment | At payoff |
|---|---|---|
| Repayable second | Has a monthly payment counted in your ratios | Remaining balance due |
| Forgivable second | No payment in most versions | Forgiven over time when conditions are met, such as on time first mortgage payments |
What to verify before choosing it
- Minimum credit score, which is generally higher than base FHA requirements
- Whether the second lien payment affects your maximum purchase price
- The exact forgiveness conditions, including what happens after a missed payment
- How the second is handled if you refinance or sell early
- Current program availability, since program terms are periodically revised
If a state program's income limit just barely rules you out, tell me. This is exactly the situation where a program like this can change the outcome.
Educational purposes only. Down payment assistance, grant and credit programs have their own eligibility rules, income and purchase price limits, occupancy requirements, funding availability and repayment terms, and program details change over time. All financing is subject to application, verification, applicable program guidelines and underwriting approval. Not a commitment to lend. Manny Oloyede | Mortgage Broker | NMLS 1824463 | Ultimate Mortgage Brokers LLC. Equal Housing Opportunity.
Frequently Asked Questions
People also ask
What does PITI stand for?
PITI stands for principal, interest, taxes, and insurance, the typical components of a monthly mortgage payment estimate.
Read: How Much House Can I Afford?Can I buy a home with no money down?
It is possible through VA loans for eligible veterans and service members, or USDA loans for eligible properties and household incomes, though qualification requirements apply.
Read: How Much Down Payment Do I Need to Buy a Home?Can I switch from FHA to conventional later?
Many borrowers refinance from FHA to conventional once they have enough equity and qualifying credit, which can remove ongoing mortgage insurance, though refinancing has its own costs to weigh.
Read: FHA vs Conventional Loans: How Do They Compare?Will my lender require a home inspection?
Generally no. Lenders typically require an appraisal, not a full home inspection, though a specific loan program or lender could have additional property-related conditions in certain cases.
Read: Is a Home Inspection Required to Get a Mortgage?Do mortgage rates change during the holidays?
Rates move based on broader market and economic factors, not the calendar season specifically, though trading volume and market activity can sometimes be lighter around holidays.
Read: Buying a Home During the Holidays: What to ExpectCan gift funds cover 100% of my down payment?
On some programs, yes, particularly FHA and certain conventional programs depending on loan-to-value and occupancy, but rules vary, so confirm specifics with your loan officer for your exact scenario.
Read: Using Gift Funds for Your Down PaymentWritten by
Manny Oloyede, Mortgage Broker
NMLS #1824463 | Ultimate Mortgage Brokers LLC NMLS #2619461 | Licensed in OH | KY | NC | PA | SC | TN | TX
I have worked in mortgage lending since 2018 out of the Akron / Cuyahoga Falls Branch, helping buyers, homeowners and investors across Northeast Ohio and every state where I am licensed. These guides reflect the questions I answer most often, written the way I would explain them on a call.
Keep reading
Down Payment Assistance Programs Explained
How down payment assistance works, the difference between grants, forgivable seconds and repayable seconds, and the tradeoffs to weigh before using one.
Buying a HomeOHFA Down Payment Assistance in Ohio
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Mortgage ProgramsFHA vs Conventional Loans: How Do They Compare?
Compare FHA and conventional mortgages on down payment, credit, mortgage insurance, property rules, loan limits and long term cost so you can weigh which path may fit.
Mortgage CostsHow Much Down Payment Do I Need to Buy a Home?
Compare typical down payment ranges across conventional, FHA, VA, USDA, jumbo, and investment property loans, plus assistance program options.
Questions about your own numbers?
Send over your goal, income type and timeline and you'll get a straight answer on what is realistic.