City Down Payment Assistance (DPA) is structured as a 0% interest, deferred loan — meaning no monthly payments are required. The loan is repaid only when the home is sold or refinanced for cash out.
How to Participate
Lenders may participate in the City's Down Payment Assistance Program through one of two pathways:
Pathway 1 — THDA-Approved Lenders
Lenders that work with the Tennessee Housing Development Agency (THDA) may combine City DPA funds with THDA mortgage products. City DPA must be paired with a THDA first mortgage and DPA product.
Process
Obtain THDA approval.
Be approved by THDA to originate THDA first mortgages. Visit the THDA website to learn more about becoming an approved lender.
Complete lender training.
Complete a virtual training session with City and THDA staff. raining sessions are held biweekly on Monday afternoons. See below for the upcoming schedule.
- Monday, June 29th, 2:00-3:00 PM: Join the Training
- Monday, July 13th, 2:00-3:00 PM: Join the Training
- Monday, July 27th, 2:00-3:00 PM: Join the Training
Sign Participation Agreement and register.
After completing training, loan officers will receive a Participation Agreement (to be signed by a designated representative of the lending institution) and a link to register in the City's online portal. Registration must be completed before requesting DPA funds.
Request funds.
After registering, loan officers may submit a request for DPA funds through the City's portal. Requests must include: borrower information, confirmation that the borrower and property meet eligibility requirements, evidence of borrower contribution, confirmation that a home inspection has been completed, the Conditional Approval, and a signed Borrower Application Declaration. Funding requests are reviewed in order of submission and reserved accordingly. If funding becomes limited, the City of Chattanooga will alert requesting loan officers.
Receive a Notice to Proceed.
City staff will review the request within 3 business days and issue a Notice to Proceed for the specific amount requested. This document must be included in the lender's submission to THDA. If the requested amount changes at any point, notify the City immediately in writing. Changes to funding amounts require a minimum of 48 business hours to review and may delay closing.
Closing.
As with other THDA loan products, the lender will advance the DPA funds at closing. THDA will purchase the City of Chattanooga DPA loan and seek reimbursement directly from the City — no action is required from the lender at that stage. The lender is responsible for providing the closing team with the City's Subordinate Note, Deed of Trust, and Closing Instructions.
Pathway 2 - Local Financial Institutions
Local financial institutions may apply to become participating lenders directly through the City, without going through THDA.
To be eligible, institutions must:
- Be a depository institution insured by the FDIC, a credit union insured by the NCUA, or a certified Community Development Financial Institution (CDFI) subject to federal or state regulatory examination
- Have a physical branch located in Hamilton County
- Offer an affordable housing loan product that can be layered with City DPA
View the DPA Presentation for more information about becoming a participating lender.
Process
Submit an application.
Apply through the City's online application portal. Include detailed information about the loan product(s) you intend to pair with City DPA.
Application review.
City staff will review your application and may request additional information or schedule a meeting with your designated representative before making a final determination.
Sign Participation Agreement and training.
Once your application is approved, City staff will share the Participation Agreement and relevant program documents with your designated representative. All loan officers who plan to request funds must complete a virtual training with City staff. Training sessions are held biweekly on Thursdays. See below for the upcoming schedule.
- Thursday, July 2nd, 10:30-11:30 AM: Join the Training
- Thursday, July 16th, 10:30-11:30 AM: Join the Training
- Thursday, July 30th, 10:30-11:30 AM: Join the Training
Request funds.
After registering, loan officers may submit a request for DPA funds through the City's portal. Requests must include: borrower information, confirmation that the borrower and property meet eligibility requirements, evidence of borrower contribution, confirmation that a home inspection and homebuyer education course have been completed, the Conditional Approval, the signed Borrower Application Declaration, and information about the settlement agent (where fund will be disbursed). Funding requests are reviewed in order of submission and reserved accordingly. If funding becomes limited, the City of Chattanooga will alert requesting loan officers.
Receive Notice to Proceed.
City staff will review the request within 3 business days and issue a Notice to Proceed for the specific amount requested. If the requested amount changes at any point, notify the City immediately in writing. Changes to funding amounts require a minimum of 48 business hours to review and may delay closing.
Closing.
City will send funds directly to the appointed settlement agent. The lender is responsible for providing the closing team with the City's Subordinate Note, Deed of Trust, and Closing Instructions.
Title company must be approved as a vendor with the City of Chattanooga. You can view a list of title companies that are currently registered with the City.