Clarksville Down Payment Assistance and First-Time Homebuyer Programs

If you’re one of the many people considering a move to Clarksville, you already know it is known for its historic attractions, beautiful rivers and trails, and hip craft food and beverage scene. Cost of living is lower than bigger cities in the state like Nashville, and the median sales price of a home is about $300,000. Still, that’s a good chunk of change, so if you want to move to Clarksville with down payment assistance, we’ve prepared some good options below.

Down payment assistance programs in Clarksville

Down payment assistance and first time home buyer programs aim to help home buyers make a larger down payment, cover closing costs, or a combination of both. There are several types of home buyer benefits, including grants, forgivable loans, and interest rate reductions and tax credits.

A grant is similar to a scholarship for college. You apply, and if you qualify for the program (i.e. meet all the criteria and the entity still has the money), you can receive funds toward your down payment or for another upfront cost related to your home purchase. 

A down payment loan (or second mortgage loan) is a loan you acquire in order to have the funds for a down payment. Many loan types require a minimum down payment between 3% and 20%. If you don’t have this money saved (many first-time home buyers don’t) then a down payment loan is an option to help you qualify. Some loans are even forgivable if you meet certain requirements like staying in the home for a few years.

Less commonly, some programs come with lower interest rates and tax credits (e.g., mortgage credit certificates) to help lower your monthly payments.

City of Clarksville First Time Home-Buyers Program

The City of Clarksville, through the Office of Housing and Community Development, recognizes the need to provide first-time homebuyers with assistance in paying initial, upfront costs in a mortgage transaction. As such, the First Time Home-Buyers Program is designed to help income-eligible applicants with down payment and closing costs assistance to purchase their first homes within the City of Clarksville. Down payment assistance is provided as forgivable second mortgages as long as applicants live in the house for at least five years and one month.

Assistance type: Forgivable second mortgage

Sponsor: City of Clarksville Office of Housing and Community Development

Assistance amount: 3.5% of sales price up to a maximum of $5,000.

Purchase price limit: $271,050

Minimum borrower contribution: 1% of the purchase price

Eligibility requirements:

• Only families within 50 percent to 80 percent of the area median income for Clarksville are eligible for this program.
• The program is only available for first-time homebuyers without a primary residence in the last three years. However, there are exceptions made for displaced homemakers or single parents.
• Applicants are required to attend a homebuyer education class.

Statewide down payment assistance programs available in Clarksville

Great Choice Home Loan Programs

The Tennessee Housing Development Agency created the Great Choice Home Loan programs to make homeownership available and more affordable for Tennesseans of middle to moderate-income levels. The first-time homebuyer assistance option is a forgivable second mortgage that helps cover down payment and closing costs.

Assistance type: Forgivable loan

Sponsor: Tennessee Housing Development Agency (THDA)

Assistance amount: 96.5% of the total price of the property

Minimum borrower contribution: 3.5% of purchase price

Eligibility requirements

• Eligible applicants must have a credit score of at least 640
• Applicants must complete a homebuyer education class before applying for down payment assistance.
• Applicants must also fulfill the household income and purchase price limit based on their counties. Here is a complete chart of income and purchase price limits.

The Housing Fund Down Payment Assistance Program

This down payment assistance program is another statewide initiative aimed at helping eligible homebuyers in Tennessee overcome financial barriers to homeownership. Administered by the Housing Fund, this program offers individuals and families loans to cover a portion of the down payment, prepaid, and closing costs associated with purchasing a home.

Assistance type: Deferred payment loan

Sponsor: The Housing Fund

Assistance amount: $35,000

Minimum borrower contribution: 1% of the purchase price

Eligibility requirements

• The property must serve as the buyer’s primary residence.
• Specific requirements regarding income limits and credit standards vary depending on the region.
• Applicants must complete a homebuyer education program provided by a THDA-certified counselor. The Housing Fund also allows online homebuyer education through eHome America when combined with a one-hour one-on-one counseling session.

The Tennessee Down Payment Partnership

The Tennessee Down Payment Partnership program also provides first-time home buyers with their down payment or closing costs in the form of deferred loans. These loans are due on sale and will only be repaid when the property is sold; the repaid down payment will then be made available for another first-time homebuyer.

Assistance type: Deferred payment loan

Sponsor: Affordable Housing Resource

Eligibility requirements

• Eligible applicants’ annual income, in combination with household size, must be at or below the 80% income limit set by the US Department of Housing and Urban Development (HUD).
• Applicants must also use a first mortgage from one of the recognized financial partners of Affordable Housing Resource Inc.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.