Down Payment Assistance

What is 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.

Do you have to pay it back?

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.

Who qualifies?

Down Payment Assistance is open to buyers who will live in the home as their primary residence.

What are the income limits?

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.

What kind of home can it be used for?

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.

Is there eligibility for specific groups?

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?

Down Payment Assistance serves buyers purchasing in Statewide, Tennessee.

How do you apply?

Applications for 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 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..

2. 2

   Contact the administering agency to reserve funds

   Funds are reserved through Apply through The Housing Fund's online intake at thehousingfund.org or via partner lender referral. Subject to fund 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.