Chenoa Fund versus FHA DPA in Arizona — which program costs you less
Chenoa Fund became one of the most common DPA sources Arizona buyers see quoted. The first-mortgage rate is higher than a vanilla FHA loan. Whether that costs you or saves you depends on how long you'll stay in the house.
The Chenoa rate trade
Chenoa Fund is a nonprofit DPA source. Their model: lend the down payment as a second mortgage, fund the program via slightly elevated first-mortgage pricing. The buyer doesn't pay for the DPA directly. The lender absorbs the cost, then prices it into the rate.
On a typical 2026 Arizona Chenoa quote, the first-mortgage pricing structure funds the assistance program.
Five-year cost comparison
The rate spread costs more over time than the slightly larger Home Plus assistance amount. For most Arizona buyers staying 5+ years, Home Plus or Home in Five comes out ahead. Chenoa wins when you can't qualify for an HFA program (income too high, property too expensive, debt ratios borderline) and need an alternative.
| Scenario | Chenoa 3.5% | Home Plus FHA |
|---|---|---|
| Purchase price | $400,000 | $400,000 |
| DPA amount | $14,000 | $16,000 (forgivable) |
| Cash to close | ~$3,500 | ~$1,500 |
| Total payments 5 yrs | $176,500 | $166,800 |
| Net DPA forgiven | $14,000 (after yr 3) | $16,000 (after yr 3) |
| 5-yr effective cost | $162,500 | $150,800 |
When Chenoa is the right tool
- Buyer income exceeds the HFA program AMI ceiling.
- Property price exceeds HFA loan-limit caps.
- Buyer needs DPA in a county where HFA bond authority has run out for the year.
- Tight debt-to-income — Chenoa's underwriting overlays are sometimes more forgiving.
- Buyer plans to sell or refinance within 3 years and won't be hurt by the rate.
Common questions
Do you have to pay back down payment assistance in Arizona?
It depends on the program. Arizona's Home Plus and Home in Five use a forgivable, deferred soft second with no monthly payment, so most buyers never repay it. Chenoa's standard 3.5% product is a repayable second, while its Soft-Second forgives over 3 years if you stay in the home. Selling or refinancing during a forgiveness window can trigger payoff.
How much down payment assistance can I get in Arizona?
It depends on the program. Home Plus gives up to 5% of the loan amount statewide (4% plus 1% for Active Duty and Veterans). Home in Five, in Maricopa County only, gives up to 6.5% (5% plus a 1% bonus plus a 0.5% boost). Chenoa runs up to 5% on its Soft-Second product. On a $400K loan that's roughly $20,000 to $26,000.
What credit score do I need for Arizona DPA?
There is no single DPA credit score; it depends on the program. Home Plus requires a 620 minimum FICO, Home in Five requires 640, and Chenoa generally goes down to around 600. FHA on its own allows scores as low as 580. If your score sits in the low 600s, we'll map out which program fits and a short plan to lift it before you apply.
Do I have to be a first-time buyer to use Arizona DPA?
No. Home Plus and Home in Five both allow repeat buyers, and Chenoa has no first-time requirement either. When a program does limit itself to first-time buyers, "first-time" means you haven't owned a home in the last 3 years, so prior owners often still qualify. This is one reason Chenoa competes for move-up buyers.
How do you decide between Chenoa and an HFA program?
We run both side by side for your numbers. If you qualify for a Home Plus or Home in Five loan, that path usually wins on five-year cost. Chenoa is the backup when your income, price point, or county allocation rules out the HFA route. See the current DPA figures for the income and FICO limits that decide which programs you fit.
Can I use Chenoa with a conventional loan?
Yes. Chenoa offers both FHA and conventional product variants, and Arizona DPA layers with FHA, VA, USDA, or conventional first mortgages. The conventional version requires a slightly higher credit score but eliminates the monthly MIP that FHA carries for the life of the loan.
Is DPA always the right move?
No. DPA can carry slightly higher first-mortgage pricing, which is exactly the Chenoa trade-off this page breaks down. If you already have savings for a down payment, a plain FHA or conventional loan can cost less over 5 years. We run both scenarios and tell you straight which one wins for your numbers.
What's the maximum Chenoa DPA?
Up to 5% of the loan amount on the Soft-Second product, 3.5% on the standard pay-back. On a $400K FHA loan, that's $14,000 to $20,000 in assistance.
How Mike + Cornerstone help
We run both scenarios side by side before recommending one. If a Home Plus loan saves you $11,000 over 5 years, we'll tell you to wait a few weeks for next year's allocation rather than write Chenoa today. If Chenoa's the only path that gets you into the house, we structure it correctly so the refinance later is clean. Have a question first? Talk to Mike.
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