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City of Chattanooga

City of Chattanooga Down Payment Assistance: up to $15,000, or $21,000 with THDA

First-time buyers up to 120% of area median income can get up to $15,000 as a 0% loan forgiven after 30 years, and up to $21,000 total when it is paired with THDA.

City of Chattanooga Down Payment Assistance Program

Funds limited

City of Chattanooga

For
First-time buyers (no ownership in past 3 years; THDA first-time definitions also accepted) up to 120% AMI
How much
Up to $15,000; up to $21,000 total combined with THDA through a city-THDA partnership
Kind of help
Forgivable loan
Income cap
120% AMI (FY2026: $81,800 1-person, $93,500 2, $105,200 3, $116,900 4, $126,250 5, $135,600 6)
Price cap
$400,000 (lesser of price or appraised value)
First-timers only?
Yes
Fine print
Inside Chattanooga city limits; approved homebuyer education within 12 months of closing; at least $1,000 of buyer's own funds; professional home inspection; approved lender

0% deferred second mortgage, no payments, forgiven at end of 30 years; repaid if sold or cash-out refinanced. Guidelines revised 05.08.2026. Explicitly stacks with THDA. Contact Megan Miles, (423) 643-7440.

Checked against the source November 2026 · how we check

Could I use this?
Want a heads-up? City of Chattanooga Down Payment Assistance Program runs on a limited pot of money that can run dry. We'll tell you when a new round is funded.

How the money works

Chattanooga's help is a 0% deferred second mortgage. There are no monthly payments, and the balance is forgiven at the end of 30 years. If you sell or do a cash-out refinance before then, you repay it. The city offers up to $15,000 on its own. Through a partnership with THDA, a buyer can reach up to $21,000 in combined help, which makes this the clearest stacking deal we found in Tennessee. Funding is limited, and the city revised its guidelines on May 8, 2026.

Who qualifies

  • First-time buyer: no ownership in the past 3 years. THDA's first-time definitions are also accepted.
  • Income: up to 120% AMI. FY2026 limits are $81,800 for 1 person, $93,500 for 2, $105,200 for 3, $116,900 for 4, $126,250 for 5 and $135,600 for 6.
  • Price: $400,000 or less, using the lower of price or appraised value.
  • Location: inside Chattanooga city limits, so East Ridge, Red Bank and Soddy-Daisy are out.
  • Your part: at least $1,000 of your own money, a professional home inspection and approved homebuyer education within 12 months of closing.

The city's income limits are lower than THDA's Hamilton County figures of $101,854 for one or two people, so a single teacher earning $90,000 could fit THDA but not the city program.

Pairing with Homeownership for Heroes

This program says it stacks with THDA. A Chattanooga firefighter or teacher could use Homeownership for Heroes for the lower rate and add city money toward the $21,000 combined figure. Your approved lender structures which THDA option goes with it. See the Hamilton County guide for the rest of the area, including the newer CNE loan.

Before you count on the full $15,000, remember that the money is limited and the city sets the final award.

Steps to apply

  1. Confirm the address is inside city limits and under $400,000.
  2. Take approved homebuyer education so it falls within 12 months of closing.
  3. Get pre-approved with a participating lender and set aside your $1,000.
  4. Order a home inspection once under contract; the lender submits the city application. City contact: Megan Miles, (423) 643-7440.

Read the first-time buyer steps and check your eligibility.

Counties we cover that it serves: Hamilton County

Questions about City of Chattanooga Down Payment Assistance Program

Can I combine Chattanooga DPA with THDA?

Yes. The city says its program stacks with THDA, for up to $21,000 in combined help.

When is Chattanooga down payment assistance forgiven?

At the end of 30 years. It is due if you sell or do a cash-out refinance before then.

What is the Chattanooga DPA income limit for a family of four?

$116,900 under the FY2026 limits, which are set at 120% of area median income.

Could I use this program?

Other programs worth a look

Summarized from the program's official page as of November 2026. Money and rules change, so check current terms with the program or a lender who takes part. Tennessee Down Payment Assistance has no connection to this program.