City of Chattanooga Down Payment Assistance Program

City of Chattanooga Down Payment Assistance Program is a forgivable loan for homebuyers in Chattanooga, Tennessee, administered by City of Chattanooga, Department of Economic & Community Development. The City of Chattanooga DPA Program provides forgivable, deferred-payment loans to income-eligible first-time homebuyers purchasing a primary residence within the City of Chattanooga. Designed to bridge the affordability gap; can be combined with THDA programs for up to $21,000 total assistance. Up to $15,000 toward down payment and closing costs; combinable with THDA for up to $21,000 total. Funding comes from City of Chattanooga (municipal).

City of Chattanooga Down Payment Assistance Program offers up to $15,000 in assistance. Homebuyer contribution: Borrower must contribute at least $1,000 of own funds (not from a gift); eligible costs include earnest money, credit report, appraisal, inspection, and education fees. The program can be combined with THDA Great Choice / Great Choice Plus (up to $21,000 combined). Amounts are the program's published maximums, not an offer — City of Chattanooga, Department of Economic & Community Development determines any individual award.

City of Chattanooga Down Payment Assistance Program is forgiven after 30 years, so a homebuyer who stays that long does not repay it. Repayment is triggered by Sale, cash-out refinance, or loss of owner-occupancy before the end of the 30-year term (rate-and-term refinances may be subordinated without triggering repayment). The assistance is recorded in Subordinate (second) lien position. Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

City of Chattanooga Down Payment Assistance Program is open to first-time homebuyers and homebuyers who will live in the home as their primary residence. "First-time" has exceptions here: Displaced homemakers or single parents who previously owned a home with a spouse may qualify (no ownership in prior 3 years). On credit, the program states: 620, or the minimum required by the first mortgage product, whichever is greater. A homebuyer education course is required, through THDA-approved homebuyer education provider; certificate dated within 12 months of closing. Residency requirement: Property must be within Chattanooga city limits. Borrower must maintain escrow accounts for taxes and insurance for the duration of the first mortgage. A professional home inspection is required before closing. Owner must occupy within 60 days of closing and notify the City within 30 days of any occupancy change. Participating-lender list was 'coming soon' as of research date.

City of Chattanooga Down Payment Assistance Program limits household income to 120% of the area median income, which varies by county and household size. FY2026 max income (effective June 1, 2026), 120% AMI Chattanooga TN-GA MSA: 1p $81,800; 2p $93,500; 3p $105,200; 4p $116,900; 5p $126,250; 6p $135,600. The limit applies to total household income, not only the borrower’s. Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

City of Chattanooga Down Payment Assistance Program caps the purchase price at $400,000. Eligible property types include single_family, townhome, condo, and manufactured. New construction is eligible. Manufactured homes are eligible.

City of Chattanooga Down Payment Assistance Program serves homebuyers purchasing in Chattanooga, Tennessee.

Applications for City of Chattanooga Down Payment Assistance Program go through City of Chattanooga, Department of Economic & Community Development, which publishes the current terms and the application steps on its own site. Hey Prescott is not a lender and does not accept applications; this page describes the program so a homebuyer can take it to a lender or housing counselor.