Memphis and Shelby County have more down payment assistance programs than most buyers realize — for teachers, police, firefighters, first-time buyers, and beyond. Eligible buyers may be able to combine DPA with FHA financing and seller concessions for a potential $0 down payment path. Here's exactly what's available and how it stacks.
"Down payment assistance" gets talked about like it's a single program, but in reality it's a category covering dozens of different products — city programs, county programs, state housing finance agency programs, employer-specific incentive programs, and national programs like the Chenoa Fund. Each one has its own income limits, credit requirements, geographic restrictions, and repayment structure — some are outright grants, some are forgivable loans that disappear after a set period, and some are repayable second mortgages with their own interest rate.
The City of Memphis Division of Housing and Community Development runs several DPA programs through its Office of Down Payment Assistance. The Citywide DPA program caps household income at 80% of area median income and can be used anywhere within city limits. For buyers above that income threshold, the Homebuyer Incentive Program for Citizens (HIPC) extends eligibility up to 200% AMI — but restricts purchases to 15 designated areas within the city.
Then there are the profession-specific programs that have no income limit at all — if you qualify by job, the income test disappears entirely. Memphis Police Department officers (HIPP), Memphis Fire Department firefighters (HIPF), and Memphis-Shelby County Schools employees with at least two years of service all qualify for dedicated DPA programs regardless of how much they earn, as long as they meet the program's employment and tenure requirements.
At the state level, Tennessee's THDA Great Choice Home Loan program pairs a 30-year fixed FHA, VA, USDA, or conventional loan with Great Choice Plus down payment assistance — either a $6,000 deferred forgivable second mortgage at 0% interest, or an amortizing option providing 5% of the sales price up to $15,000. Both require a minimum 640 credit score and a HUD-certified homebuyer education course.
These are real, named programs — not generic categories. Eligibility and funding availability change, so confirm current status before counting on a specific program.
The real power of down payment assistance shows up when it's combined with the right loan type and the right negotiation strategy — not used in isolation. Here's how the pieces fit:
DPA covers the down payment. Whichever program you qualify for, its job is to satisfy FHA's required 3.5% (or whatever the relevant program requires) so you're not pulling that money from savings.
Seller concessions cover closing costs, prepaids, and repairs — up to 6% of the purchase price on FHA loans. This is separate from the down payment and can't be used to satisfy it, but it can eliminate nearly every other cash requirement at the closing table. See our FHA loan page for the full breakdown of how this 6% allowance works and why it matters on Memphis's older housing stock specifically.
When both pieces line up — a DPA program covering the down payment, and a seller willing to credit 6% toward costs and repairs — a buyer can realistically close on a home with very little or no cash of their own. That's not a guarantee on every deal, but it's a real and achievable outcome that Trevor structures regularly for Memphis buyers, especially in the price ranges common in neighborhoods like Frayser, Whitehaven, and Orange Mound.
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