Hank Hayes • May 29, 2017 at 8:30 AM

KINGSPORT – Do you need extra cash to make that down payment or closing cost on a house?

The Tennessee Housing Development Agency (THDA) wants to make you a deal – if you live in the Kingsport area 37660 ZIP code.

“The way this works is a THDA eligible borrower who wants to buy a home in 37660 gets $15,000 to help with their down payment and closing cost,” THDA Executive Director Ralph Perrey said of the deal.

Why is THDA doing this?

Perrey said THDA’s business in East Tennessee has been up 42 percent since he’s been executive director.


“That’s not by accident,” he noted. “We’ve got people based here and being a lot more aggressive about getting the word out. Now we have some additional federal funding through the old Hardest Hit Fund (a federal program enacted during the last recession) that we’ve been allowed to target to give people down payment assistance in 55 targeted ZIP codes across the state. One of them is here in Kingsport, 37660 … The point of the exercise is we’re the only state where they allowed targeting at the ZIP code level instead of going on the county designations that applied in 2009. That led us to be a little more specific about where we wanted to target the assistance and let us spread it out into more communities, including a portion of Kingsport. The idea is identify areas that besides being hit during the downturn, have been a little slower coming back with property values that haven’t risen as much and the idea is to encourage home ownership investment in that area. Really you build communities by bringing a home owner into an area. We structured this in a way to reward those who are making a commitment to the area.”

Is this free money?

Perrey emphasized the assistance is not a gift. “It’s structured as a second mortgage that is forgivable over 10 years during which time the borrower accrues no interest and makes no additional payment,” he explained. “Starting in year six of the loan, 20 percent is forgiven each year. So someone who’s there for 10 years will never repay any of the $15,000. If they depart earlier than that, we get some of that money back and we can reprogram it for somebody else. This wouldn’t be of any use to someone who’s looking to buy a house and flip it for a quick profit. It is going to pay off for somebody who wants to live in Kingsport, has been looking for a home ownership opportunity in a neighborhood where they will be there awhile … we’re excited about that.”

What’s the typical loan mortgage?

THDA, according to Perrey, will fund mortgages up to about $235,000. “Our typical customer pays less than that … our statewide average is about $125,000-$130,000,” Perrey pointed out.

How do you get started?

Go to www.greatchoicetn.com. Perrey said that will tell you what you need to qualify for the mortgage, like a certain income level and credit score. “If your debt-to-income ratio is under 45 percent, you will qualify for the mortgage and the down payment assistance that goes with it,” he said. “Then we’ve got a list of lenders in the area who offer mortgages and homebuyer education counselors … we’ve already committed about $5 million toward those downpayments.”

What is the makeup of the 37660 ZIP code?

It stretches from Bloomingdale to West Kingsport. According to www.unitedstateszipcodes.org, the population of about 40,000 is primarily white. The number of seniors is extremely large while the number of people in their late 20s to early 40s is large. There are 19,753 housing units and 17,640 occupied housing units. The median home value is $116,300. The median household income is $34,323.

How many homes are available in the 37660 ZIP code?

According to Northeast Tennessee Association of Realtors (NETAR) President Eric Kistner, there were 164 listings in 37660 in April. The median listing price was $164,900.

Why are home prices going up now?

NETAR reported at the end of April that lack of inventory is driving up prices. “Lack of inventory is probably a problem nationwide,” Perrey observed. “The recession took so many homebuilders out of the business. The ones who stayed in the business, they’re building $400,000 and above houses.”

What is THDA?

THDA is a state agency advancing affordable housing. The agency reported last month its financial impact reaches past the new homeowners’ front doors and contributed hundreds of millions of dollars to Tennessee’s economy and $29 million in state and local taxes in 2016.

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