Down Payment Assistance
To help limited-income buyers access the dream of homeownership, The Housing Fund offers an affordable Down Payment Assistance loan product throughout Tennessee.
Homeownership is Possible
The Housing Fund provides affordable loans of up to $35,000 for down payment, prepaids, and closing costs to individuals and families. If you meet the criteria for eligibility, we can help you reach your goal of successful homeownership.
How Do I Qualify?
Eligible buyers must meet the following criteria in order to qualify for Down Payment Assistance from The Housing Fund:
- The home being purchased must be the buyer’s primary residence.
- The buyer should be approved with a first-mortgage lender, and that lender must be FHA-approved in Tennessee.
- Homebuyer Education, provided by a THDA-certified counselor, must be completed prior to closing (Click here for a list of certified counselors).
- The Housing Fund also allows Online Homebuyer Education through eHome America when combined with a 1-hour, One-on-One counseling session for all clients using our Down Payment Assistance loan.
- Click here for online Homebuyer Education instructions.
- Borrowers must contribute at least 1% of sales price toward the purchase.
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The Housing Fund begins an underwriting process when a complete borrower application and lender-loan package have been received: See the Request for THF Loan Approval.
- For credit standards and underwriting guidelines, see the Underwriting Checklist.
What People Say
How Do I Apply?
Once you are approved by a first-mortgage lender (who must be FHA-approved in Tennessee), you will notify them that you would like to connect with The Housing Fund for down-payment assistance. Next, you will fill out a THF application and give it to your first-mortgage lender. They will then send the packet of information about your loan, including your application, to THF. The list of documents needed from first-mortgage lenders can be found here in the underwriting checklist.
Income Requirements by County
The U.S. Department of Housing and Urban Development (HUD) publishes Area Median Income guidelines by Tennessee County. The Housing Fund’s Down Payment Assistance and Shared Equity programs serve up to 120% AMI, while our Community Land Trust program only serves clients at or below 80% of the Nashville-Davidson MSA’s AMI. Find income-eligibility guidelines for your county here.
Frequently Asked Questions
For loan requests under $10,000, the minimum credit score is 600. For loan requests between $10,000 and $35,000, the minimum credit score guideline is 620. However we encourage those with lower scores to still apply, as we may be able to recommend specific actions that can be taken to improve credit scores in order to meet THF’s credit requirements.
Once you are approved by a first mortgage lender (who must be FHA-approved in Tennessee), you will notify them that you would like to use THF for down payment assistance. Next, you will fill out a THF application and give it to your first-mortgage lender. They will then send the packet of information about your loan, including your completed application, to THF. The list of documents needed from first-mortgage lenders can be found here in the underwriting checklist.
Any lender that is FHA-approved in the state of Tennessee can use THF’s down payment assistance program, in addition to our investing partners.
Once the application and ALL of the required supporting documentation is received from the first-mortgage lender, THF needs 5-7 business days to complete the underwriting process. If the client’s packet of information is incomplete, the process can take longer.
A first-mortgage lender will verify whether a client meets The Housing Fund’s underwriting criteria to qualify for Down Payment Assistance and/or closing-cost loans. For more information, please review this form.
The Housing Fund works with first-mortgage lenders to provide DPA loans to clients statewide, throughout Tennessee.
The Housing Fund is currently offering a promotional interest rate on its Down Payment Assistance loan product, currently a 5% Fixed Rate for all income tiers until further notice.
No. All of The Housing Fund’s DPA loans must be paid back.
No. The Housing Fund can provide up to $35,000 in down-payment assistance to qualified borrowers who receive first-mortgage financing from a Tennessee-approved and FHA-approved lender.
