More than 400 Memphians have benefitted from down payment assistance from the Tennessee Housing Development Agency, according to a recent announcement by THDA. The agency's $15,000 Hardest Hit Fund, which was launched last year, has helped to revitalize some of the Memphis neighborhoods hit hardest by the foreclosure crisis.
THDA Executive Director Ralph M. Perrey and Memphis Mayor Jim Strickland hosted a joint press conference on March 20 at the Clancy House at The Works in South Memphis to recognize the Hardest Hit Fund's early success while also shining a spotlight on the city’s down payment assistance program that works in tandem with THDA.
THDA received $60 million from the state of Tennessee to launch its Hardest Hit Fund, and to date home buyers in targeted distressed neighborhoods throughout the Memphis area have received $6.3 million in financial assistance.
“It really helped us double our home loan production literally in Memphis,” said THDA executive director Ralph M. Perrey. “The good news is that the program continues, and there’s sufficient money to see it through the peak of the home buying season this spring and summer.”
Perrey describes the program as a quick shot in the arm to some of the communities in Tennessee where the housing market was struggling with foreclosures and other lingering problems from the Recession.
Each of the 18 designated ZIP codes in the Memphis market enjoyed at least some activity since the program started in January 2017. Taking top honors for the state, Shelby County outpaced Knox County by about 50 percent with more than 425 homebuyers participating in the program to date, securing total home loans worth more than $45 million in struggling communities.
“There’s still time to get in on it,” said Perrey. “It continues to surprise people that you can have household income of about $68,000 and still qualify for THDA financing. It may be a lot easier for some people to buy a home than they originally thought.”
Joy Turner is one local homeowner who benefited from the down payment assistance programs.
“Prior to taking advantage of the city’s DPA program in January of 2018, I had been looking for homes outside Memphis when I really knew that my heart was in Memphis and I wanted to stay here,” said Turner, who bought her home in the 38128 ZIP code in the Frayser/Raleigh area.
The City of Memphis, through its Division of Housing & Community Development, offers various forms of down payment assistance that complement the programs offered by THDA.
“It was awesome to me because I didn’t have 10 percent of my home’s purchase price just laying around. Without the assistance, I wouldn’t have been able to become a homeowner this fast,” said Turner. “With the city trying to rebuild certain areas, it’s free money. So if you qualify for the program, why not?”
The THDA program matches up with similar programs developed by the City of Memphis through the Division of Housing and Community Development. Individuals and families who earn less than 200 percent of the area median income can access up to $10,000 towards the purchase of a new home in 14 zip codes in Memphis.
“In the past 14 months, 148 Memphians have taken advantage of this program,” said Strickland. “Memphis is an opportunity city. We do have momentum with us. People are wanting to live in the city, and this is another way to get that done.”
Certain buyers can qualify for both city and state assistance programs, giving them as much as $25,000 towards the down payment of their home.
“Homeownership helps to stabilize our neighborhoods,” said THDA board member Kim Brown. “With doubling our loan production, it means more people owning more homes here in the city of Memphis. We’re thrilled with how successful it’s been in our area.”
Across the state of Tennessee, 62 zip codes were designated as eligible for the THDA program, and the response has been strong overall.
“The trend line indicates a lot of people who are interested in home ownership, and the availability of an extra amount of down payment assistance is the difference in getting them into a home that they might’ve thought they needed to wait a couple of years to get,” said Perrey. “In many of these neighborhoods, an investment now is really going to pay off.”
Home buyers who purchased a home in certain targeted ZIP codes of Memphis using THDA’s Great Choice Home Loan program can apply for $15,000 in HHF-DPA assistance toward the down payment and closing costs in the form of a forgivable second mortgage loan. There are no monthly payments on the second mortgage loan during its ten-year term, and it does not accrue any interest. THDA will forgive 20 percent of the second mortgage loan each year starting in year six. Buyers must live in the home and not refinance, sell or move out during the ten years to reap the full benefit.
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