CNE Down Payment Assistance

What is CNE Down Payment Assistance?

CNE Down Payment Assistance is a forgivable loan for homebuyers in Chattanooga, Tennessee.

• CNE-administered HUD HOME-funded forgivable second mortgage for first-time homebuyers in Hamilton County / Chattanooga MSA. Up to $15,000 at 0% interest, deferred, forgiven over 5 years. Pre-purchase homebuyer education provided in-house by CNE.
• Chattanooga Neighborhood Enterprise (CNE) Down Payment Assistance is a forgivable second-mortgage loan administered by CNE - a HUD-approved housing counseling agency, CHDO, and Hamilton County's leading nonprofit homeownership organization. Eligible CNE clients receive up to $15,000 toward down payment and closing costs to purchase a primary residence in the Chattanooga / Hamilton County area. The loan carries 0% interest, requires no monthly payments, and is forgiven over a 5-year affordability period (consistent with HUD HOME rules for assistance amounts under $15,000 per 24 CFR 92.254). Pre-purchase homebuyer education is provided in-house by CNE.
• Funding comes from Federal, HOME, and Local.

Do you have to pay it back?

CNE Down Payment Assistance is forgiven after 5 years, so a buyer who stays that long does not repay it.

• Repayment is triggered by Forgiven over 5-year affordability period (1/5 per year of owner-occupancy). Unforgiven balance due on sale, refinance (cash-out), transfer, or non-occupancy before period end, limited to net proceeds.
• The assistance is recorded in 2nd Lien position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

CNE Down Payment Assistance is open to first-time homebuyers and buyers who will live in the home as their primary residence.

What are the income limits?

CNE Down Payment Assistance limits household income to 80% of the area median income, which varies by county and household size.

• Household income at or below 80% AMI per HUD HOME for Chattanooga MSA. Specific household-size table updated annually; verify with CNE.
• 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.

What kind of home can it be used for?

CNE Down Payment Assistance caps the purchase price as follows: Per HUD HOME 95% area median for Chattanooga MSA; verify current limit with CNE.

• Eligible property types include Single-family detached, condominium, townhouse, PUD, manufactured home on permanent foundation per HOME / first-mortgage rules.
• New construction is eligible.
• Manufactured homes are eligible.

Is there eligibility for specific groups?

CNE Down Payment Assistance names veterans, active-duty service members, reservists and National Guard members, and surviving spouses among the groups it serves.

• Being named here means the program mentions the group, not that membership alone qualifies an applicant — the rest of the eligibility rules still apply.

Where does it apply?

CNE Down Payment Assistance serves buyers purchasing in Chattanooga, Tennessee.

How do you apply?

Applications for CNE Down Payment Assistance go through the administering agency, which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through CNE - HUD-approved housing counseling agency. Pre-purchase homebuyer education and financial coaching provided in-house at CNE's Chattanooga office. Online education via eHome America also accepted. Certificate required at closing..

2. 2

   Contact the administering agency to reserve funds

   Funds are reserved through Apply through CNE intake / counseling process; subject to annual HOME allocation availability., and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.