Clarksville, TN – The Tennessee Housing Development Agency (THDA) is offering $15,000 in down payment assistance to homebuyers who purchase a home in targeted neighborhoods that were hard hit by the downturn and have been slower to recover in Clarksville and across the state.
THDA Executive Director Ralph M. Perrey announced the new program — Hardest Hit Fund Down Payment Assistance (HHF-DPA) program — today at a joint press conference with Clarksville Mayor Kim McMillan and Montgomery County Mayor Jim Durrett.
“Our goal is to provide a shot in the arm to the neighborhoods and housing markets in Tennessee where the effects of the housing crisis have been most difficult to erase,” said Perrey.
Clarksville Mayor McMillan added: “The HHF-DPA Program is designed to stimulate additional investment in our communities. Our goal—in partnership with THDA—is to make each of our neighborhoods vibrant and sustainable by identifying ways to boost property values and attract new residents.
“It’s really exciting how much this program is going to renew and reinvigorate the housing market in some of the neighborhoods that need it most. This is a great opportunity for people in the market for their first home to have a larger down payment than they might have thought possible.”
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. Targeted Zip Codes in Clarksville-Montgomery County are 37040 and 37042.
“We’re creating a substantial incentive for homeowners to buy in areas that are struggling for sales right now. 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,” Perrey said.
Homebuyers will make no monthly payments on the second mortgage loan during its 10-year term, and it does not accrue any interest. 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 10th year, the second mortgage loan would 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. 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,” said Perrey.
THDA received approval from the U.S. Department of Treasury to commit $60 million in federal funding to its new HHF Down Payment Assistance Program. The source of this funding is U.S. Treasury’s Hardest Hit Fund (HHF), which was established in the aftermath of the mortgage market crisis to help homeowners at risk of losing their homes to foreclosure.
THDA’s $15,000 HHF Down Payment Assistance program is available in 55 targeted ZIP Codes spanning parts of 30 counties across Tennessee based on a number of “stress” factors, including foreclosures.
THDA offers the Great Choice Plus down payment assistance to qualified 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 additional information, visit www.THDA.org
About the Tennessee Housing Development Agency
As the State’s housing finance agency, the Tennessee Housing Development Agency (THDA) is a self-sufficient, publicly accountable entity of the State of Tennessee. Our purpose is to meaningfully expand affordable housing opportunities for Tennesseans.
More information about THDA can be found online at www.THDA.org
