My mom may need chemo for cancer soon. should she be allowed to hold our newborn?

Yes: Absolutely. Your mother can hold your newborn baby. It will help for both of you and especially for your mom emotionally to see her grandchild. Cancer is not contagious. If your little one later on goes to daycare and has cold or other upper respiratory infection etc-your mom is the one who should be careful and not get infection from your little one. Otherwise your baby should be fine.