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Editorial


Front Page - Friday, February 17, 2017

THDA announces $15K incentive to homebuyers in targeted neighborhoods




The Tennessee Housing Development Agency is offering $15,000 in down payment assistance to homebuyers who purchase a home in targeted Chattanooga neighborhoods that have been slower to recover from the downturn.

By attracting homebuyers and stimulating home sales, the new Hardest Hit Fund Down Payment Assistance (HHF-DPA) program is designed to protect the families already living in these targeted neighborhoods from blight, falling property values and risk of foreclosure.

THDA Executive Director Ralph M. Perrey says the agency’s goal is to provide a shot in the arm to the neighborhoods in Chattanooga where the effects of the housing crisis have been most difficult to erase.

“We’re creating a substantial incentive for homeowners to buy in areas that are struggling for sales. Increased market activity in these areas will help stabilize property values for existing homeowners, thereby reducing the risk they will fall into delinquency or foreclosure,” says Perrey.

Eligible borrowers who purchase homes in targeted ZIP codes using THDA’s Great Choice Home Loan program can apply for $15,000 in HHF-DPA assistance toward their down payment and closing costs in the form of a forgivable second mortgage loan.

Homebuyers will make no monthly payments on the second mortgage loan during its 10-year term. In addition, THDA will forgive 20 percent of the second mortgage loan each year starting in year six. Therefore, if a homeowner does not refinance, sell or move out of their home by the end of the tenth year, the second mortgage loan will be completely forgiven.

“This program represents a significant increase in the dollar value of the down payment assistance we’re able to offer in these ZIP codes,” says Perrey. “As buyers jump on that offer, it’s going to push property values in the right direction for the entire neighborhood. We want this program to boost to the financial security of every family in the area, not just the ones moving in.”

THDA’s HHF-DPA program is available in targeted ZIP codes based on a number of stress factors, including foreclosures, short sales and negative equity rates. ZIP codes in Chattanooga include 37404, 37406, 37411, 37412 and 37416.

THDA offers the Great Choice Plus down payment assistance to Great Choice-eligible homebuyers who take advantage of the Great Choice Home Loan program outside of these targeted ZIP codes. However, the Great Choice Plus down payment assistance is limited to five percent of the home’s purchase price and is not completely forgiven for 30 years.

For more information, visit THDA.org.