Current down payment assistance guidelines, updated from one source.
The current program figures below are refreshed from Lendmire’s down payment assistance standards source at each visit, so the options shown for Memphis, TN are the options in force.
Of the purchase price
The largest option is a repayable second lien that covers your down payment and can reach closing costs and prepaids too; the smaller options cover the 3.5% FHA minimum down payment, in whole or, on the lowest tier, in part.
Covers the FHA down payment, in whole or in part
This covers the 3.5% FHA minimum down payment in whole or, on its lower tier, in part, and is forgiven at closing: no lien on the home, no monthly payment, no interest. It opens on the area income limit or on a qualifying category.
On the forgivable and repayable options
No income cap on the forgivable and repayable options: earn what you earn. The nothing-to-repay option is the one exception, opening at or below 140% of area median income or through a qualifying category.
Credit score to start
The score that opens the nothing-to-repay option; the forgivable options start a step higher and the repayable options higher still. Two-borrower files may use a blended score on the second-lien options.
| Option | Assistance | What you repay | Credit · mortgage · units |
|---|---|---|---|
| Grant-style assistance — nothing to repay | 2% or 3.5% of the price | Nothing — released at closing | 620+ · FHA 203(b), FHA repair escrow, FHA Limited 203(k), FHA Standard 203(k) · 1–4 units |
| Forgivable second lien — three-year | 3.5% of the price | Nothing after 36 on-time mortgage payments | 640+ · FHA 203(b), FHA Limited 203(k), HUD-184, USDA · 1–2 units |
| Forgivable second lien — five-year | 3.5% of the price | Nothing after 60 on-time mortgage payments | 640+ · FHA 203(b), FHA Limited 203(k), HUD-184, USDA · 1–2 units |
| Repayable second lien — thirty-year amortization, ten-year balloon | 3.5% or 5% of the price | Second lien, 30-year amortization, balloon in year 10 | 660+ · FHA 203(b), FHA Limited 203(k), HUD-184, USDA · 1–2 units |
| Closing-cost repayable second lien | 3.5% or 5% of the price | Second lien, 30-year amortization, balloon in year 10 | 660+ · FHA 203(b) · 1–2 units |
| Refinance-cost second lien (repayable) | 1% to 3.5% of the balance | Second lien, repaid | 660+ · FHA 203(b) · 1–4 units |
Current down payment assistance snapshot · updated September 7, 2026 · six options offered in Tennessee · no option requires a first-time buyer · no option combines with another assistance program · owner-occupied primary residences only.
Down payment assistance options are consumer mortgage programs arranged through select wholesale lenders, licensed in sixteen states, paired with FHA, USDA, or HUD-184 first liens. Assistance is stated as a percentage of price or value, never as a dollar figure a specific borrower would receive; the forgivable and repayable options are second liens with their own disclosures. Eligibility depends on the first lien’s approval, the option’s rules, the property, and full underwriting, subject to lender program eligibility. The calculator’s rate is an editable market benchmark, not a quote, and its payment is an illustrative estimate; no fee or lender identity appears on this page. Lendmire is a mortgage broker and never the lender, and is not affiliated with or acting on behalf of FHA, VA, USDA, HUD, or the federal government. Lendmire, LLC — NMLS #2371349. Equal Housing Opportunity.
What down payment assistance is — and how the options differ.
The first-time home buyer programs in Memphis, TN answer the most common reason a qualified buyer does not close — the cash to close — with assistance measured on the price and shaped to the buyer’s situation.
For the program overview, see Lendmire’s down payment assistance program, or the statewide guide at Down Payment Assistance in Tennessee.
Assistance covers the FHA down payment
The gap the program closes for a Memphis buyer is the minimum investment: the assistance covers that share of the price, the first lien carries the rest, and the buyer’s own savings stay for the move.
Four shapes: grant, forgivable, repayable, refinance
Nothing to repay, forgiven over time, or repaid with a balloon: the three purchase shapes in Memphis, TN cover the same minimum investment and differ in what the buyer owes afterward, and a fourth, the refinance-cost option, serves an existing FHA loan.
Credit floors, mortgage programs, and unit counts
A Memphis file is placed by three things — the credit tier, the first-lien program, and the property — and the options table on this page shows the floor, the first liens, and the unit limit for every option offered in Tennessee.
Eligibility without a first-time-buyer rule
Eligibility is broader than most buyers expect: repeat buyers qualify, income limits apply only to the nothing-to-repay option, and the categories that open it include first responders, educators, medical personnel, civil servants, and military.
The assistance is measured on the price, so the calculator starts there. It then applies the option you choose, your own cash, and an editable benchmark rate to show the loan, the mortgage insurance, and the payment.
Where Memphis’ first-time and moderate-income buyers shop — and how the assistance fits.
These Memphis, TN figures describe the market, not a borrower; the first lien’s approval and the option’s rules carry the file, and the numbers here only explain the neighborhood it sits in.
Read the figures as backdrop. Value and income rarely move at the same pace; the market figures below show what a Memphis home costs and how many households rent, and the calculator shows what that means for the minimum investment.
Data sources: U.S. Census Bureau — ACS 5-Year (2024) housing and population estimates, including tenure, home values, gross rents, and household income.
Distinct Memphis submarkets, distinct property rules.
Memphis’ entry-level stock is not one market. Each submarket below carries its own price points, its own property rules, and its own fit with the assistance options.
Townhomes and attached homes
In Memphis, a townhome in a planned development pairs cleanly with the program; the association’s rules and dues are read alongside the first lien, and the assistance covers the down payment. The median owner-occupied home value in Memphis runs near $169,000 on the latest Census estimate.
Older neighborhoods and renovation loans
Renovation purchases in Memphis qualify for the assistance on the price before repairs, which lets a buyer take on a home that needs work without also finding the minimum investment. About 55% of Memphis’ households rent — roughly 139,512 renter households, the pool the program exists for.
Condominiums close to work
In Memphis, a condominium near the job is the first home many buyers can reach; the program pairs with it as long as the project clears FHA review, and the assistance covers the minimum investment the same way it would on a house. Memphis itself counts a population near 619K.
Small multi-unit homes, owner-occupied
In Memphis, owner-occupied small multi-unit buildings qualify for assistance when the buyer lives in one of the units, up to four units on a purchase; the unit count decides which option applies. Median gross rent in Memphis is about $1,181 a month — the payment many renters already carry.
New construction and infill
A newly built Memphis home is eligible; the buyer’s own funds requirement is covered by the assistance, and the builder’s closing date is met once the first lien is approved. On a home at Memphis’ median value, the FHA minimum investment comes to about $5,900 — the figure the assistance is built to cover.
Manufactured homes on owned land
Manufactured housing on owned land near Memphis is eligible, with the option decided by the home’s width: the nothing-to-repay option accepts single-width homes, while the second-lien options accept double-width only. Median household income in Memphis sits near $51,736 on the latest Census estimate.
Read the submarkets as orientation. The file’s figures come from the first lien, the option, and the program’s rules.
Four ways Memphis buyers put down payment assistance to work.
The same assistance serves several purposes in Memphis, TN; four of the most common are below.
Cover closing costs too on the larger option
When the minimum investment is covered but closing costs and prepaids remain the hurdle, the repayable option in Memphis, TN reaches both; the balance above the minimum investment goes toward the closing.
Buy a small multi-unit home and live in one unit
House-hacking in Memphis, TN pairs with the program when the buyer occupies a unit; the unit count decides which option applies, and the first lien carries the building.
Pair the assistance with a USDA or HUD-184 mortgage
In USDA-eligible areas around Memphis, the forgivable and repayable options pair with a no-down-payment first lien (the separate closing-cost option is FHA only); HUD-184 first liens pair the same way.
Buy a home that needs work with a renovation mortgage
Renovation purchases in Memphis, TN qualify for the assistance on the price before repairs, so the down payment help and the repair budget close together at one table.
Size the assistance on a Memphis price before requesting a quote.
The calculator does what a loan officer’s first pass does for a Memphis file — sizes the minimum investment, applies the option, builds the FHA loan with mortgage insurance, and estimates the payment — using the current program figures and an editable benchmark rate.
Memphis FHA payment with assistance
A Memphis scenario to start from — adjust the price, the option, your own cash, the term, and the rate to see the assistance and the payment.
Editable benchmark: 7.28% as of October 1, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not an FHA loan quote.
Illustrative starting assumptions: a $170,000 price near Memphis’ median owner-occupied home value, the strongest assistance option offered in Tennessee applied against the FHA minimum investment, a thirty-year term at the current Freddie Mac benchmark, property taxes and insurance estimated for Tennessee (U.S. Census Bureau). Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not an FHA loan quote; your rate is set by the lender at lock. FHA mortgage insurance follows HUD’s published schedule for the term, leverage and loan size entered; taxes, insurance and dues are editable estimates; closing costs are not included; a repayable second lien adds its own payment, which is not shown here. Consumer mortgage lending licensed in sixteen states. Lendmire is not affiliated with or acting on behalf of FHA, USDA, HUD, or the federal government.
Same buyer, three very different closings.
Same Memphis buyer, three closings: assistance on an FHA loan, the buyer’s own minimum investment, or assistance on a USDA or HUD-184 loan.
Assistance on an FHA loan, your own down payment, or assistance on a USDA or HUD-184 loan.
Covers the FHA minimum investment as a percentage of the price in four shapes — the lightest a nothing-to-repay option released at closing, the largest a repayable second lien that reaches closing costs and prepaids — with credit floors in the low six hundreds and no first-time-buyer rule.
The buyer brings the minimum investment from savings, a retirement withdrawal, or seasoned funds; no second lien, no eligibility category, no homebuyer education requirement, and no assistance to carry. For the first lien itself, see Lendmire’s FHA loan program.
Where the property is USDA-eligible or the buyer qualifies for HUD-184, the forgivable options and the ten-year repayable option carry the Memphis file; the separate closing-cost option is FHA only. For the USDA first lien, see the USDA loan program.
Assistance fits the buyer short of cash to close; the plain purchase fits the buyer with savings; the USDA and HUD-184 pairing fits eligible properties and borrowers — Lendmire places the Memphis, TN file where it reads best.
What to prepare for a Memphis scenario review.
The documents a lender reads first on an assistance file.
This is a general preparation guide, not a universal checklist. The selected lender may request additional information based on the mortgage, the assistance option, the property, and the eligibility category. Nothing here is legal or tax advice.
Local details that can change the loan.
Every Memphis file is underwritten individually, but the same handful of considerations recur; they are worth settling before the contract is signed.
Use these checks to keep the Memphis file clean and fundable.
A clean Memphis file starts with the option chosen, the first lien matched to the property, and the homebuyer education course completed where it is required.
- Know the option: choose by cost to carry first, amount second.
- Confirm the category: settle which category applies before the application is signed.
- Do not stack: check the first lien’s specialty programs against the option.
The option decides what you owe afterward
The same minimum investment can be covered three ways on a purchase in Memphis, TN, and the difference is entirely in what happens after closing: nothing, nothing if the first lien stays current, or a second loan that comes due; the options table shows what is offered.
The eligibility category for the nothing-to-repay option
The category is checked at application on the nothing-to-repay option, together with the signed assistance application and the education certificate; no option requires a first-time buyer, and the second-lien options carry no income limit.
No stacking with other assistance
No option may be combined with another down payment assistance program in Memphis, TN, and the nothing-to-repay and forgivable options do not combine with a high-balance first lien; one assistance option, one first lien, one closing.
Escrow holdbacks for minor repairs
A Memphis home with a small repair list does not have to wait for the work before closing; the escrow holdback carries it, within the program’s cap and timeline, with an inspection when the work is done.
The mortgage and the county loan limit
In Memphis, TN, the first-lien program is chosen with the property: USDA where the address is eligible, HUD-184 where the buyer qualifies, FHA everywhere. The county loan limit then decides whether a larger first lien can still carry an assistance option.
From a Memphis pre-approval to keys with the assistance in place.
The process for a Memphis, TN purchase with assistance is deliberate, because the details around the assistance are what stall closings.
Pick the option
Every Memphis file starts with the option and the first lien; the category, the homebuyer education course and the property rules are then settled around them, in that order.
Get the mortgage approved
Lendmire packages the Memphis file for the first lien first, because the assistance follows its approval; the option’s floor and the first lien’s rules both have to clear.
Clear the property
Property review runs in parallel with the first lien; the Memphis home is checked against the option’s rules and the first lien’s, from the unit count to the association package.
Close both loans together
The Memphis closing carries both instruments: the first lien and the assistance, each documented on its own and closed together, with the education certificate in the file where it applies.
A brokerage that pairs the assistance to the loan.
Lendmire built its consumer practice around the buyers these programs exist for, which is why the options, the categories, and the property rules are familiar ground rather than surprises.
The option, matched to the buyer
A Memphis scenario is placed on the right option first — the credit tier, the first lien, and the category — and the rest of the file is then built to fit it, before anything is ordered.
The mortgage, matched to the property
USDA where the address is eligible, HUD-184 where the buyer qualifies, FHA everywhere; the Memphis, TN first lien is the foundation the assistance stands on.
The right wholesale program
Not every wholesale lender carries down payment assistance, and the ones that do differ on shape, floors, and states; Lendmire knows which is which.
Trusted by first-time buyers & families alike.
Memphis down payment assistance FAQs
Plain answers to the questions Memphis buyers ask most about down payment assistance, before you request a review. Every file is underwritten individually; nothing here is a commitment.
Do I have to be a first-time homebuyer?
No option requires it. A Memphis buyer who has owned before qualifies for the second-lien options on credit, mortgage, and property alone, and for the nothing-to-repay option through any of the other categories.
Is there an income limit?
The second-lien options have none; the nothing-to-repay option has an area income limit that a qualifying occupation, a first purchase, or an underserved tract can substitute for.
What first-time home buyer programs are available in Memphis?
Four shapes paired with a government mortgage: a nothing-to-repay option released at closing; forgivable second liens with no interest and no payment, released after an on-time payment period; a repayable second lien with a balloon that also reaches closing costs and prepaids; and a refinance-cost option for an existing FHA loan. The options table on this page shows what is offered in Tennessee.
Do I have to pay the assistance back?
Where the nothing-to-repay option is offered, nothing at all — no lien, no payment, no interest. The forgivable second liens are also free to carry: no payment and no interest, and they disappear once you have made the on-time mortgage payments the program asks for. Only the repayable option comes with a payment.
What credit score do I need?
Lower than most buyers expect: the entry floor for a Memphis buyer sits in the low six hundreds, with the second-lien options a step or two higher. Two-borrower files may qualify on a blended score on the second lien when the higher earner has the higher score.
What is the rate on the mortgage and on the assistance?
It depends on the first lien, the option, and the file; the rate shown in the calculator is an editable market benchmark, not a quote, and the payment it produces is an illustrative estimate. A scenario review produces the terms.
What does Lendmire do on a Memphis first-time home buyer file?
Lendmire matches the option to the buyer and the first lien to the property, then runs both through approval and closing; it brokers the loan through its wholesale network and is never the lender.
Is there an option for refinancing?
Yes, a refinance-cost option: a repayable second lien sized as a share of the balance on an existing FHA loan, covering closing costs and keeping the first lien inside FHA leverage limits. It is not a streamline, and it cannot refinance a loan that already carries assistance.
What is the repayable option and when does it make sense?
The repayable second lien covers the minimum investment and closing costs, and it makes sense when the help has to reach closing costs or the first lien is high balance; plan around its balloon and read its disclosures as the loan it is.
Which mortgages can the assistance be used with?
FHA on every option, with the repair-escrow and renovation programs where the options table allows them and the standard FHA loan alone on the closing-cost and refinance options; USDA and HUD-184 on the forgivable and repayable second liens (the closing-cost repayable option, the one that also reaches prepaid items, is FHA only). Conventional first liens are outside the program.
Bring the price. We will find the option.
Start with the price, the first lien you expect, and your credit tier. No credit pull or commitment is required to request an initial scenario review.
This guide covers Memphis — for the statewide options, categories, and property rules, see Down Payment Assistance in Tennessee, part of Lendmire’s down payment assistance program.
Nearby markets in Tennessee: Bartlett · Collierville · Jackson · Columbia · Spring Hill · Clarksville · Franklin · Nashville
Related programs: FHA Loans · USDA Loans · FHA 203(k) Rehab Loans