There Is Another Down Payment Program in Tennessee. It Goes Up to $35,000.

Most buyers know about THDA. Fewer know about this one.

The Housing Fund is a nonprofit based in Madison, Tennessee. They have been doing this since 1996. They have helped over 4,500 buyers and put more than $41 million in down-payment assistance loans to work. They are a certified Community Development Financial Institution — a CDFI — which means they are federally recognized, not a flyer from a parking lot.

The big number: up to $35,000

They can provide up to $35,000 for down payment, prepaids, and closing costs. THDA maxes out at $15,000. For Nashville-area prices that extra range matters.

A $300,000 home with FHA needs about $10,500 down. A $400,000 home needs about $14,000. Add $6,000 to $10,000 in closing costs and the cash-to-close number jumps. $35,000 in assistance can change what is possible.

No first-time buyer requirement

THDA generally wants no homeownership in the last three years, with exceptions. The Housing Fund does not. If you owned five years ago and had to sell, went through a divorce, or have been renting and are ready to buy again, none of that disqualifies you here. Primary residence. That is the occupancy rule.

The credit floor is lower

THDA wants 640 from everyone on the application. The Housing Fund: 600 minimum for loans under $10,000, 620 for loans between $10,000 and $35,000. If you are in that 600 to 640 band, THDA will not work. This might.

They also encourage buyers below the threshold to still reach out. Staff can walk you through what it would take to get the score there.

How the income limit works

The program serves buyers earning up to 120% of HUD Area Median Income for the county. AMI varies by county and household size. For the Nashville-Davidson MSA, 120% AMI for a household of four is in the range of $137,000 to $140,000 based on current HUD data. Smaller households have lower limits. Larger have higher. Check thehousingfund.org/income-guidelines for your county and size.

It is a loan, not a grant

This matters. The Housing Fund's assistance is a real loan. It is not forgiven over time. The current rate is 5% fixed. You will have a monthly payment. Borrow $20,000 at 5% over 30 years and you are looking at roughly $107 a month on top of the first mortgage.

For some buyers that extra payment is a dealbreaker. For others it is a reasonable trade for getting in now instead of waiting two or three years to save cash. THDA's deferred option has no payment for 10 years and is forgiven at the end. If you qualify for THDA and do not need more than $15,000, that structure is hard to beat. If you need more than $15,000, or you miss THDA's credit or first-time rules, The Housing Fund is often next.

The 1% contribution rule

You have to contribute at least 1% of the purchase price yourself. On a $350,000 home that is $3,500. A lot of assistance programs want skin in the game. Know it before closing day.

Education and the application path

You complete a homebuyer education course from a THDA-certified counselor. The Housing Fund also accepts eHome America online if you pair it with a one-hour counseling session.

You do not apply to The Housing Fund on your own. It runs through your first-mortgage lender. Get approved for the first mortgage with an FHA-approved Tennessee lender. Tell them you want The Housing Fund. They submit a complete package. Underwriting takes 5 to 7 business days once the packet is complete. Incomplete packets do not start the clock. Work with someone who has done this.

I am FHA-approved in Tennessee. I have worked with The Housing Fund. If you want to know whether it fits, we will run the numbers.

Which program is right

640 or higher, no home in three years, need $15,000 or less: THDA's deferred option is usually the better deal. Score between 600 and 640, owned a home before, or need more than $15,000: look hard at The Housing Fund. Some buyers qualify for both. Then we look at income, price, and how long you plan to stay. There is no one-size answer.

Call or text (615) 955-0461. Ten minutes is enough to see if the 120% AMI limit and the credit floors work for you.