Down Payment Assistance Program

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. 

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).

             FY2025 Maximum Income Limits
             (set annually by the Department of Housing and Urban Development)
                 - 1 person: $80,250
                 - 2 people: $91,700
                 - 3 people: $103,150
                 - 4 people: $114,600
                 - 5 people: $123,800
                 - 6 people: $132,950
 

• 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.

            → List of Participating Lenders is coming soon!

• 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 this map to verify property eligibility

• Plan to live in the home
  The property must be your primary residence. It cannot be rented out or used as a short-term rental.
• 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.

To help residents learn more, the City of Chattanooga will host a series of information sessions this spring and summer:

• Police and Fire Personnel: May 18th, 1:30-2:30pm at the Family Justice Center

• Educators: June 2nd, 3-5pm at Public Education Foundation

• General Public: June 8th, 5-7pm at Bessie Smith Cultural Center

Additional dates will be added as they are scheduled.

• City of Chattanooga Down Payment Assistance Program Guidelines

• List of Participating Lenders (COMING SOON)

• Property Eligibility Map

• THDA Mortgage Programs

• THDA List of Homebuyer Education Courses