Hamilton County THDA Lenders


By the numbers

To qualify for a THDA first-time homebuyer loan in Hamilton County:

* 620 - Minimum credit score

* $240,000 - Maximum eligible home price

* $77,140 - Maximum household income for family of four

* $66,120 - Maximum household income for family of two in Chattanooga

Source: Tennessee Housing Development Agency

See a list of local lenders for the THDA program at

The number of home loans made this year could drop by up to 30 percent as borrowers worry about tighter lending standards and higher interest rates.

But the head of Tennessee's state-backed housing agency Wednesday urged would-be homeowners not to give up on the market too soon.

"You could be closer to home ownership than you expect," said Ralph Perrey, executive director of the Tennessee Housing Development Agency who toured Southeast Tennessee Wednesday to encourage bank lenders and home borrowers to consider THDA mortgages. "A recent survey showed that about half of all people assume that they can't qualify for a home loan, but that may not necessarily be true."

The era of easy, no-down-payment loans may have ended with the housing collapse six years ago. But through its network of more than 200 lenders across Tennessee, THDA still offers second-mortgage options to help buyers with down-payment and closing costs and historically low rates with government-backed mortgages funded through the agency's recent $125 million bond sale.

THDA currently has 30-year, fixed-rate mortgage loans for 3.99 percent for qualified buyers.

Patricia Smith, director of public affairs for THDA, suggests those who are interested in buying a home sign up for one of the home buying counseling sessions THDA and its agents such as Chattanooga Neighborhood Enterprises offer to first-time buyers to get them ready to take on their first mortgage.

"If you are thinking about buying in the next year, you should come take one of these courses to find out what you need to do and to prequalify (in case you take on a second mortgage or other assistance for the closing and down payment costs)," she said.

Last year, THDA made 2,071 home loans in Tennessee, including 134 in Hamilton County.

"We'd like to do a little bit better this year, and we revamped some of our programs last summer to help keep our rates attractive and help make home ownership as affordable as possible," Perrey said.

Nonetheless, many analysts predict overall mortgage volume will be down this year as refinancing activity falls and some home buyers are unable to qualify for loans because of their weakened economic condition coming out of the recession. A new report by KBW analysts Bose George and Jade Rahmani predicts mortgage activity could fall 30 percent this year.

The analysts forecast residential mortgage origination volume of $1.15 trillion in 2014, down from almost $1.8 trillion in 2013. That is slightly lower than the Mortgage Bankers Association's forecast of $1.2 trillion.

Purchase activity is still expected to be up to 10 percent, however.

To aid home buyers, THDA launched a special web portal at with interactive information to help buyers pick the best financing option.

THDA is a self-financing state agency, but it is able to sell tax-exempt bonds to get lower-interest loans and its uses FHA guarantees and home buying counseling to limit the risks on its loans made to low- and middle-income buyers.

An attractive bond sale in April helped THDA cut its interest rate on new fixed-rate loans from 4.45 percent down to 3.99 percent.

"The economy recovers when homebuying recovers and homebuying recovers when the first-time homebuyer comes to the market," Perrey said. "And THDA supports the first-time home buyer."

Contact Dave Flessner at or at 757-6340.