What is the Tennessee Down Payment Assistance (DPA) Program?
The Tennessee Down Payment Assistance (DPA) Program helps eligible homebuyers cover the upfront costs of purchasing a home, including the down payment and closing expenses, to make homeownership more affordable.
How much assistance can I receive through the DPA program?
Eligible buyers can receive up to $6,000 in assistance, provided as a second mortgage with zero interest and deferred payments, as long as the home remains the buyer’s primary residence.
Who qualifies for the Tennessee DPA program?
Eligibility is based on income limits, credit score, and whether the applicant is purchasing the home as their primary residence. Both first-time and repeat buyers in targeted areas may qualify.
Is the DPA assistance only for first-time homebuyers?
No, while the program is designed for first-time buyers, repeat buyers can qualify if purchasing in designated targeted areas or meeting other program criteria.
What are the income limits for this program?
Income limits vary based on household size and county location, ensuring the program targets low-to-moderate-income families. These limits are updated annually.
What types of properties are eligible for the program?
Eligible properties include single-family homes, townhouses, and condominiums. Manufactured homes may qualify if they meet program requirements and are permanently affixed to a foundation.
What is the minimum credit score required for the DPA program?
Applicants typically need a minimum credit score of 640 to qualify. Higher scores may improve eligibility for certain loan options.
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Get Started NowDoes the DPA assistance need to be repaid?
The assistance is provided as a deferred second mortgage with zero interest. Repayment is only required if the buyer sells, refinances, or moves out of the home before the loan is forgiven.
Can the assistance cover both down payment and closing costs?
Yes, the funds can be used to cover both the down payment and eligible closing costs, reducing the upfront financial burden of buying a home.
Is homebuyer education required to qualify for the program?
Yes, all applicants must complete a homebuyer education course to help them understand the responsibilities of homeownership and manage their finances effectively.
What is the maximum purchase price allowed under the program?
As of 2025, the maximum allowable purchase price varies by county but generally ranges from $300,000 to $500,000, depending on program guidelines.
Are there restrictions on where the property must be located?
Yes, the property must be located in Tennessee and meet the program’s eligibility criteria for location and type.
Can the program be used for newly constructed homes?
Yes, newly constructed homes are eligible as long as they meet the program’s purchase price and property requirements.
Are there debt-to-income (DTI) ratio requirements?
The maximum DTI ratio is typically 45%, but exceptions may be made for borrowers with strong credit or other compensating factors.
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Get Started NowAre there any fees associated with the program?
Standard mortgage-related fees, such as origination and processing fees, may apply. These costs should be discussed with your lender during the application process.
Can the DPA program be combined with other homebuyer assistance programs?
Yes, the DPA program can often be combined with other state or local assistance programs to maximize benefits for eligible homebuyers.
How does the deferred second mortgage work?
The deferred second mortgage allows buyers to receive assistance without making payments on it while living in the home. Repayment is required only if the home is sold, refinanced, or no longer used as the buyer’s primary residence.
Can the program be used with FHA, VA, or USDA loans?
Yes, the DPA funds can be used with FHA, VA, USDA, and conventional loans, provided the buyer and property meet program requirements.
What are the benefits of the Tennessee DPA program?
The program makes homeownership more attainable by reducing upfront costs, providing affordable loans, and supporting buyers with education and resources for long-term success.
What is the process for applying to the Tennessee DPA program?
Applicants work with an approved lender who will verify eligibility, guide them through the application process, and assist with securing the down payment assistance.