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 Knoxville 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 Knoxville Mayor Madeline Rogero and Knox County Mayor Tim Burchett. By attracting homebuyers and stimulating home sales, the program is designed to protect the families already living in these targeted neighborhoods from blight, falling property values, and risk of foreclosure.


“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.


“This program will complement the City’s existing programs to decrease blight, stabilize neighborhoods, and help more of our residents become homeowners,” said Knoxville Mayor Madeline Rogero, at an announcement event held at the City County Building.


Knoxville neighborhoods located in the qualifying ZIP Codes include North Knoxville, Old North Knoxville, Edgewood, Parkridge, Park City, Whittle Springs, Burlington, West Haven, Lonsdale, Norwood and Pleasant Ridge.


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.


“We’re creating a substantial incentive for homeowners to buy in areas that are struggling for sales right now,” Perrey said. “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.”


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 tenth 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).


“I want to thank Treasury for allowing us to target the areas in Tennessee that are in need of stabilization. The HHF dollars will continue to be utilized where they can be most effective,” said Perrey.


THDA’s $15,000 HHF Down Payment Assistance 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 East Tennessee include:























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 additional information, visit



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