Down Payments, Gifts and Assistance in Tennessee

Name the source of every dollar

Separate your own savings, documented gifts, lender credits, and any assistance into different worksheet lines. Ask the lender or program administrator for the current written terms, documentation, repayment conditions, and timing before treating any source as available. A label such as assistance does not tell you whether there is a second obligation or what cash remains after closing.

• Ask whether assistance is a grant, deferred loan or amortizing second loan.
• Ask what happens on sale, refinance or early payoff.
• Keep closing funds separate from a post-closing reserve.

Compare scenarios, not headlines

A larger down payment can change the loan amount, but it can also reduce liquid cash. Assistance can reduce the cash needed at closing while adding a second obligation or conditions. Put each option into the same worksheet: purchase price, first-loan terms, second-loan terms, cash to close, expected monthly housing payment, and cash left after closing. A hypothetical buyer with enough savings for either route might prefer the option that leaves an emergency reserve, while another may value avoiding a second payment. Neither result is universal.

• Use the lender’s Loan Estimate for the comparison inputs.
• Do not compare one lender’s rate with another lender’s cash-to-close alone.
• Ask how gifts must be documented before moving money.

Confirm the route before making commitments

Get the program, first-mortgage, and assistance terms in writing before relying on the funds in an offer. This page does not determine eligibility, program availability, or loan terms.