Nashville Down Payment Assistance Program

Nashville Down Payment Assistance Program: The Complete 2024 Guide for First-Time Homebuyers

Dreaming of a front porch in Music City but worried about the cash you need up front? The Nashville Down Payment Assistance Program could foot up to $10,000 of that bill—enough to turn “one day” into day one.

Why This Program Matters More Than Ever

Nashville home prices have jumped more than 40 % since 2020, according to multiple MLS trend reports. When starter homes flirt with the $400,000 mark, a 3 % down payment alone can drain a savings account. That’s where the Nashville Down Payment Assistance Program (NDPA)—backed by the Metropolitan Government of Nashville and Davidson County—steps in. The program hands qualified first-time buyers a forgivable loan of up to $10,000, potentially covering their entire down payment or a big chunk of it.

Think of it as a booster rocket: once you clear the launchpad, the assistance quietly detaches (after a five-year residency period) and you keep orbiting as a homeowner.

How Does the Nashville Down Payment Assistance Program Work?

The NDPA offers a zero-interest, deferred-payment loan recorded as a second mortgage. Stay in the home for five consecutive years and the loan is forgiven dollar-for-dollar. Sell, refinance, or move out sooner and you repay only the un-forgiven balance. Simple math, but life-changing impact.

Here’s the typical flow:

• Application – You apply with an NDPA-approved lender who pre-screens income, credit, and property type.
• Reservation – Funds are set aside for you once the purchase contract is signed.
• Closing – The assistance is wired to the title company, lowering the cash you bring to the table.
• Forgiveness clock – Live in the home for 60 months and the second mortgage is released.

Unlike many assistance programs, Nashville’s funds can layer with FHA, VA, USDA, or conventional first mortgages. That flexibility is rare, and it’s one reason local lenders rave about the NDPA.

Micro-Story: Maria & Jamal’s 30-Day Turnaround

Maria, a Nashville kindergarten teacher, and Jamal, a freelance drummer, had stellar rental history but only $5,500 saved. Their lender reserved a $10,000 NDPA loan, allowing them to buy a $335,000 townhome near Antioch. Because they stacked the state’s THDA Great Choice grant for closing costs, their out-of-pocket expense shrank to $1,200—less than their security deposit would have been. Thirty days later they owned keys instead of a lease.

Who Is Eligible for Nashville Down Payment Assistance?

Eligibility isn’t cryptic; it’s a four-layer filter:

1. First-time buyer – No ownership in the past three years. (Military veterans are exempt from this rule.)
2. Income caps – Household income must sit at or below 80 % of the Nashville-Metro median, adjusted for family size. For 2024 that ranges from about $60,300 for a single earner to roughly $95,000 for a family of five, according to HUD charts.
3. Credit worthiness – Minimum 620 score, although some partner lenders ask for 640 to streamline underwriting.
4. Primary residence – The property must be within Davidson County limits and become your full-time home.

Hit those four notes, and you’re practically on stage.

What Types of Homes Qualify Under the Program?

The NDPA isn’t just for white-picket fences in the suburbs. Qualifying properties include:

• Single-family homes
• Condo units (warrantable)
• Townhomes
• 1–4 unit properties (you must occupy one unit)

Manufactured housing is currently excluded. The purchase price must also fall beneath FHA’s area limits, which hover near $472,000 for a single-family home in 2024.

How Do You Apply for the Nashville Down Payment Assistance Program?

Step-by-step:

1. Complete a HUD-approved homebuyer education course. Save the certificate.
2. Choose an NDPA-participating lender—the city lists them on Nashville.gov.
3. Gather documents – Last two pay stubs, two months of bank statements, two years of W-2s and tax returns.
4. Lender submits request to the Metropolitan Development and Housing Agency (MDHA).
5. MDHA issues commitment and wires funds for closing.

Pro tip: start the education class early; certificates are valid for one year and remove a last-minute hurdle.

Nashville’s Assistance vs. Other Tennessee Programs: A Quick Comparison

Tennessee’s statewide THDA program caps down-payment support at 5 % of the loan amount (maximum ~$8,000 on a $160,000 mortgage). The Nashville Down Payment Assistance Program beats that number by 25 % and layers on top of THDA in many cases. In other words, a savvy buyer could land two sources of aid totaling $18,000—enough to sidestep private mortgage insurance or buy the rate down.

Given that every 0.25 % rate drop trims roughly $40 off the monthly payment on a $300,000 loan, stacking assistance can free up $480 per year—money that could go toward property taxes, repairs, or that legendary live-music budget.

Benefits in a Nutshell

• Up to $10,000 forgivable after five years
• Zero-interest second mortgage—no monthly payment
• Compatible with FHA, VA, USDA, and conventional loans
• Layerable with THDA and employer assistance grants
• No recapture tax when forgiven

Fine Print to Keep on Your Radar

Every program has caveats:

• Resale restriction – Sell within five years and you repay the prorated balance.
• Occupancy monitoring – Annual affidavit confirms you still live there.
• Funding cycles – NDPA pulls from HUD HOME dollars; when funds run low late in the fiscal year, approvals slow.

Time your purchase between November and April—historically when new allocations arrive—to reduce the risk of waitlists.

Insider Tips to Secure Your Spot

1. Lock your rate early. Rates climb faster than home prices fall. Secure both mortgage approval and NDPA reservation simultaneously to dodge last-minute payment shocks.

2. Leverage seller credits. Ask your agent to negotiate up to 3 % in closing cost concessions, freeing more of the $10,000 for the actual down payment.

3. Target redevelopment zones. Certain neighborhoods like Bordeaux and Trinity Lane occasionally offer bonus grants layered on top of NDPA—an open secret savvy buyers exploit.

The program goes by various nicknames—Nashville DPA program, Music City down payment aid, or simply Nashville homebuyer assistance—but regardless of label, the application mechanics stay the same.

Frequently Asked Questions

Ready to Turn the Key? Let’s Map Your Next Steps

The clock on this year’s NDPA funding is already ticking. If you’re serious about planting roots in Nashville, schedule a 10-minute discovery call with our HUD-certified advisors today. We’ll check your eligibility, connect you to an approved lender, and walk you through the paperwork line by line—no jargon, no guesswork. Your new address could be closer than you think.

Book My Free Consultation

Sources: Metropolitan Development and Housing Agency program manual; HUD FY-2024 income limits; Greater Nashville REALTORS® January 2024 market report. Figures rounded for readability.