Homebuyer Programs in Chattanooga, TN (2026)
Chattanooga, nestled along the Tennessee River in Hamilton County, offers one of the strongest local homebuyer assistance programs in the state with a median home price around $340,000. The City of Chattanooga First-Time Homebuyer Program provides up to $10,000 as a grant plus up to $50,000 as a zero-interest loan for buyers below 80% AMI. Chattanooga Neighborhood Enterprise (CNE) offers additional down payment assistance up to $15,000. Combined with the THDA Great Choice Plus program offering up to $6,000 as a forgivable loan or up to $15,000 as a repayable loan, Chattanooga buyers could potentially access over $75,000 in total assistance.
Top Homebuyer Programs in Chattanooga
| Program Name | Type | Amount | First-Time Only | Details |
|---|---|---|---|---|
| City of Chattanooga First-Time Homebuyer Grant and Loan Program | Grant | Up to $10,000 grant plus up to $50,000 zero-interest loan (below 80% AMI) or $40,000 loan (80-100% AMI) | Yes | View → |
| FHA Loans | Government-Insured Mortgage | Up to FHA county loan limits ($541,287 floor to $1,249,125 ceiling for single-family in 2026) | No | View → |
| FHLBA Community Partners Product | Forgivable Loan | Up to $20,000 in home purchase assistance for down payment and closing costs | No | View → |
| FHLBA First Time Homebuyer Product | Forgivable Loan | Up to $17,500 in home purchase assistance for down payment and closing costs | Yes | View → |
| FHLBA Workforce Housing Plus+ | Forgivable Loan | Up to $15,000 in home purchase assistance for down payment and closing costs | No | View → |
| Good Neighbor Next Door (HUD) | Government Property Sale Program | 50% discount off the list price of HUD-owned homes | Yes | View → |
| Home Possible Mortgage (Freddie Mac) | Government-Guaranteed Mortgage | Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment | No | View → |
| HomeReady Mortgage (Fannie Mae) | Government-Guaranteed Mortgage | Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment | No | View → |
| HUD $100 Down Program | FHA-Financed HUD REO Purchase | Only $100 down payment required (vs. standard 3.5% FHA down payment). HUD may also pay up to 3% of buyer's closing costs. | No | View → |
| USDA Rural Development Loans | Government-Guaranteed Mortgage | 100% financing (no down payment required); loan amount up to appraised value | No | View → |
| VA Loans | Government-Guaranteed Mortgage | No loan limit for veterans with full entitlement (0% down at any price); partial entitlement subject to conforming limits ($832,750 standard in 2026) | No | View → |
| CNE Down Payment Assistance Program | Repayable Loan | Up to $15,000 | No | View → |
| The Housing Fund Down Payment Assistance | Repayable Loan | Up to $35,000 | Yes | View → |
| THDA Great Choice Home Loan | Government-Insured Mortgage | 30-year fixed-rate mortgage at below-market interest rates | Yes | View → |
| THDA Great Choice Plus - Amortizing Option | Repayable Loan | Up to 5% of the purchase price, maximum $15,000 | Yes | View → |
| THDA Great Choice Plus - Deferred Option | Forgivable Loan | $6,000 forgivable second mortgage | Yes | View → |
| THDA Homeownership for Heroes | Government-Insured Mortgage | 0.5% reduced interest rate plus up to $15,000 or 5% of purchase price in DPA | No | View → |
- Type:
- Grant
- Amount:
- Up to $10,000 grant plus up to $50,000 zero-interest loan (below 80% AMI) or $40,000 loan (80-100% AMI)
- First-time only:
- Yes
- Type:
- Government-Insured Mortgage
- Amount:
- Up to FHA county loan limits ($541,287 floor to $1,249,125 ceiling for single-family in 2026)
- First-time only:
- No
- Type:
- Forgivable Loan
- Amount:
- Up to $20,000 in home purchase assistance for down payment and closing costs
- First-time only:
- No
- Type:
- Forgivable Loan
- Amount:
- Up to $17,500 in home purchase assistance for down payment and closing costs
- First-time only:
- Yes
- Type:
- Forgivable Loan
- Amount:
- Up to $15,000 in home purchase assistance for down payment and closing costs
- First-time only:
- No
- Type:
- Government Property Sale Program
- Amount:
- 50% discount off the list price of HUD-owned homes
- First-time only:
- Yes
- Type:
- Government-Guaranteed Mortgage
- Amount:
- Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment
- First-time only:
- No
- Type:
- Government-Guaranteed Mortgage
- Amount:
- Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment
- First-time only:
- No
- Type:
- FHA-Financed HUD REO Purchase
- Amount:
- Only $100 down payment required (vs. standard 3.5% FHA down payment). HUD may also pay up to 3% of buyer's closing costs.
- First-time only:
- No
- Type:
- Government-Guaranteed Mortgage
- Amount:
- 100% financing (no down payment required); loan amount up to appraised value
- First-time only:
- No
- Type:
- Government-Guaranteed Mortgage
- Amount:
- No loan limit for veterans with full entitlement (0% down at any price); partial entitlement subject to conforming limits ($832,750 standard in 2026)
- First-time only:
- No
- Type:
- Repayable Loan
- Amount:
- Up to $15,000
- First-time only:
- No
- Type:
- Repayable Loan
- Amount:
- Up to $35,000
- First-time only:
- Yes
- Type:
- Government-Insured Mortgage
- Amount:
- 30-year fixed-rate mortgage at below-market interest rates
- First-time only:
- Yes
- Type:
- Repayable Loan
- Amount:
- Up to 5% of the purchase price, maximum $15,000
- First-time only:
- Yes
- Type:
- Forgivable Loan
- Amount:
- $6,000 forgivable second mortgage
- First-time only:
- Yes
- Type:
- Government-Insured Mortgage
- Amount:
- 0.5% reduced interest rate plus up to $15,000 or 5% of purchase price in DPA
- First-time only:
- No
How to Apply
- Step 1:
Check your eligibility. The City of Chattanooga program requires household income at or below 100% AMI. Buyers below 80% AMI qualify for the highest assistance levels. THDA programs have county-specific income limits for Hamilton County.
- Step 2:
Complete homebuyer education. All programs require homebuyer education classes. Contact Chattanooga Neighborhood Enterprise (CNE) for local courses.
- Step 3:
Get pre-approved for a mortgage. Contact a THDA-approved lender to apply for a Great Choice Home Loan. A minimum credit score of 640 is required for THDA programs. CNE also offers FHA, VA, USDA, and HomeReady mortgage products.
- Step 4:
Apply for the City of Chattanooga program. Contact CNE, which administers the city's First-Time Homebuyer Grant and Loan Program. Buyers below 80% AMI can receive up to $10,000 in grant assistance plus a $50,000 zero-interest loan. Buyers at 80-100% AMI can receive up to $10,000 grant plus a $40,000 zero-interest loan.
- Step 5:
Apply for CNE Down Payment Assistance. CNE offers an additional $15,000 in down payment assistance as a second mortgage for purchases in Hamilton County and surrounding counties.
- Step 6:
Find a home within program limits. The City program requires a purchase price of $300,000 or less. Contribute a minimum of $500 toward the purchase. The home must be your primary residence.