Down Payment Assistance

Down Payment Assistance is a deferred second loan for homebuyers in Statewide, Tennessee. Statewide CDFI DPA from The Housing Fund (Nashville-HQ). Up to $25,000 (typically) / $35,000 (some markets) deferred 0%-interest second-mortgage loan, balloon at sale/refi/payoff. Two FICO tiers (600/620), two income tiers (50%-80% AMI and 80%-150% AMI). Open to first-time AND repeat buyers. $1,000 minimum buyer contribution. The Housing Fund Down Payment Assistance is a 0% interest, deferred SECOND-MORTGAGE LOAN provided by The Housing Fund, a Nashville-headquartered statewide CDFI (Community Development Financial Institution). Eligible TN homebuyers receive up to $25,000 statewide (up to $35,000 in some markets) toward down payment, closing costs, and minimum borrower contribution. The loan carries 0% interest with NO monthly payments. the full principal balance is deferred and due as a balloon at the earliest of (a) sale, (b) refinance, (c) payoff of first mortgage, (d) cessation of owner-occupancy, or (e) typically 5-year balloon (varies by tier and product). This is a NON-FORGIVABLE deferred loan - balance is recovered at maturity or trigger event. The Housing Fund offers two FICO tiers reflecting different funding pools: 600 minimum (HOME-funded / restricted-use pool) and 620 minimum (general CDFI pool). Two income tiers: 50%-80% AMI and 80%-150% AMI. Funding comes from CDFI, HOME, and Private.

Down Payment Assistance is deferred, so no payments are due until the home is sold, refinanced, or the first mortgage is paid off. Repayment is triggered by Full principal balance due at the earliest of: sale, refinance, payoff of first mortgage, cessation of owner-occupancy, or balloon date (typically 5 years and varies by tier). Non-forgivable - balance is recovered at maturity. 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.

Down Payment Assistance is open to homebuyers who will live in the home as their primary residence. On credit, the program states: Two tiers: 600 minimum FICO for HOME-funded / restricted-use pool; 620 minimum FICO for general CDFI pool. Verify which tier applies with The Housing Fund. A homebuyer education course is required, through HUD-approved homebuyer education required (Framework, eHome America, or HUD-approved counseling agency). The Housing Fund itself is a HUD-approved housing counseling agency and provides education in-house. Certificate required at closing. Residency requirement: Property must be located in Tennessee and used as borrower's primary residence. Citizenship or immigration status: U.S. citizen, permanent resident, or qualifying non-permanent resident alien per first-mortgage and CDFI rules. Borrower must complete HUD-approved homebuyer education (in-house with The Housing Fund or external HUD-approved provider). Two FICO tiers: 600 minimum FICO for HOME-funded / restricted-use pool (lower-income tier); 620 minimum FICO for general CDFI pool. Maximum 45% DTI. Owner-occupied primary residence in Tennessee. Income within The Housing Fund's 50%-150% AMI scaling table (range $38,450 (50% AMI smaller HH) to $169,350 (150% AMI large HH in higher-cost county); statewide ceiling). Minimum $1,000 borrower contribution. Property must meet first-mortgage product appraisal/inspection standards. First-time homebuyer NOT required (open to repeat buyers).

Down Payment Assistance limits household income to 150% of the area median income, which varies by county and household size. The Housing Fund's published 50%-150% AMI scaling table for Tennessee MSAs/counties. Range approximately $38,450 (50% AMI smaller HH) to $169,350 (150% AMI larger HH in higher-cost counties). Specific limits vary by county and household size; verify with The Housing Fund. 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.

Down Payment Assistance caps the purchase price as follows: Per first-mortgage product loan limits and The Housing Fund underwriting; no separate Housing Fund cap published. Eligible property types include Single-family detached, condominium, townhouse, PUD, manufactured home on permanent foundation per first-mortgage product. 1-unit owner-occupied. New construction is eligible. Manufactured homes are eligible.

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.

Down Payment Assistance serves homebuyers purchasing in Statewide, Tennessee.

Applications for Down Payment Assistance go through the administering agency, which publishes the current terms and the application steps on its own site. Funds are reserved through Apply through The Housing Fund's online intake at thehousingfund.org or via partner lender referral. Subject to fund availability. 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.