The City of Chattanooga is offering up to $15,000 in down payment assistance to help first-time homebuyers overcome the upfront costs of purchasing a home.
Through a first-of-its-kind partnership with the Tennessee Housing Development Agency (THDA), eligible buyers may qualify for up to $21,000 in total assistance when combining City and THDA programs.
City Down Payment Assistance (DPA) is structured as a 0% interest, deferred loan, with no monthly payments required. The loan is repaid only if the home is sold or refinanced for cash out.
Program Requirements
To qualify for this program, you must:
Be a first-time homebuyer
You must not have owned a home in the past 3 years.
Meet income limits
Your household income must be at or below 120% of the Area Median Income (AMI).
FY2026 Maximum Income Limits (effective June 1st, 2026)
(set annually by the U.S. Department of Housing and Urban Development)
- 1 person household: $81,800
- 2 person household: $93,500
- 3 person household: $105,200
- 4 person household: $116,900
- 5 person household: $126,250
- 6 person household: $135,600
Work with a participating lender
Your lender is your entry point into the program. You’ll need to qualify for a mortgage through one of our approved lenders.
Complete an approved homebuyer education course
This course is required before closing and is best taken early to help you prepare. Certificates are valid for 12 months. Visit THDA’s website to see a list of approved courses and local HUD-certified housing counselors.
Choose an eligible home
The home must be within Chattanooga city limits and priced at $400,000 or less. Use our Down Payment Assistance Lookup Tool to verify an address and view online records.
Contribute to your purchase
You must contribute at least $1,000 of your own funds.
Complete a home inspection
A professional home inspection is required before closing.
How the Program Works
Start with a participating lender.
Your lender is your entry point and will guide you through the program and help determine your eligibility. A list of participating lenders will be available on the City's website.
Take a homebuyer education course.
Required before closing. Homebuyer education certificates are good for twelve months and best completed early – even before speaking with a lender – to help you prepare for the process.
Get pre-approved.
Your lender will review your finances and determine how much you can borrow, including how much assistance you qualify for.
Find a home & schedule an inspection.
Choose an eligible home within city limits and complete a professional home inspection.
Loan approval & coordination
Your lender completes the underwriting and works with the City of THDA to confirm eligibility.
Close on your home.
Down payment assistance funds are sent directly to the closing agent and applied at closing.
To better understand Chattanooga’s housing issue, our Down Payment Assistance Program, and program guidelines, view the program presentation.
Helpful Resources
City of Chattanooga Down Payment Assistance Program Guidelines
List of Participating Lenders (COMING SOON)