Those who have not saved enough money to make a downpayment on a home purchase now may have a chance to achieve the American Dream through the Tennessee Housing Development Agency’s Great Choice …
Those who have not saved enough money to make a downpayment on a home purchase now may have a chance to achieve the American Dream through the Tennessee Housing Development Agency’s Great Choice program.
The program, which offers eligible homebuyers $15,000 in downpayment and closing cost assistance, aims to increase homeownership in areas of the state affected by the hardships caused by the 2008 recession.
THDA Executive Director Ralph M. Perrey said now is an ideal time to purchase a home in Cleveland. He said the Great Choice program, which is funded by the Hardest Hit Fund Down Payment Assistance program, still has plenty of funding available to help people purchase an existing home. He said the program is funded until the end of the year, possibly lasting into early 2019.
“The $15,000 puts people closer to homeownership,” Perrey told the Cleveland Daily Banner on Thursday. “It’s good for families who want to put down roots.”
Perrey said the program has been very successful in Cleveland and Bradley County.
The program is available for homes in 37323 and 37311 zip codes, where certain stress factors have occurred including foreclosures, short sales and negative equity rates, according to the THDA.
For homes in those ZIP codes, purchasers with incomes up to $63,286 in one to two person households and up to $72,779 for households up to three persons can utilize the program to purchase a home up to $250,000.
Under the program, eligible borrowers who purchase home in the above-listed zip codes can apply for $15,000 in downpayment and closing cost assistance in the form of a forgivable second mortgage.
“It’s technically a loan, but it starts decreasing 20 percent yearly in the sixth year and after,” Perrey said. “It does not accrue interest.”
In addition, no payments are required on the loan during its ten-year term.
If the homeowner does not refinance, sell, or move out of their home by the end of the tenth year, the second mortgage is forgiven.
The home must be the buyer’s principal residence. A property may be up to four units; however, the owner must occupy one of the units as their principal residence. Rental income may count toward the owner’s household income limit, according to the THDA.
The program does not cover newly-constructed homes.
The program helps stabilize property values for existing homeowners, while reducing the risk of their homes falling into delinquency or foreclosure. As a result, the program helps fight blight, as well as provide financial security.
To qualify, borrowers must complete THDA-approved Homebuyer Education courses with an agency approved to work with Hardest Hit Fund-Down Payment Assistance homebuyers.
For more information, visit greatchoicetn.com.
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