Tennessee Down Payment Assistance Programs

What Tennessee offers home buyers

The Tennessee Housing Development Agency (THDA) is the state's housing finance agency. It administers several programs designed to make homeownership more accessible for Tennessee residents, with a focus on first-time buyers and those with moderate incomes. THDA programs are funded through the sale of mortgage revenue bonds and are available through a network of approved lenders statewide.

THDA programs are not grants — they are structured as below-market rate first mortgages and, in the case of Great Choice Plus, as second mortgages that provide down payment assistance. The assistance must be repaid if the home is sold or refinanced within a certain period, depending on the program.

The core THDA programs

General eligibility requirements

THDA programs have several common eligibility requirements. These are subject to change — verify current requirements with Morgan Hardy or directly with THDA:

• First-time buyer requirement: Most programs require that you haven't owned a home in the past three years (with exceptions for targeted areas and certain programs)
• Income limits: Household income must be at or below THDA's limits for your county. Limits vary by county and household size.
• Purchase price limits: The home's purchase price must be at or below THDA's limits for your county.
• Primary residence: The home must be your primary residence.
• Homebuyer education: Most programs require completion of a THDA-approved homebuyer education course.
• Credit requirements: Minimum credit scores apply and vary by the underlying loan program (FHA, VA, USDA, conventional).

How THDA assistance interacts with loan programs

THDA's Great Choice program can be paired with FHA, VA, USDA, or conventional financing. The underlying loan program determines the down payment requirement, mortgage insurance structure, and property eligibility. THDA provides the interest rate benefit and, through Great Choice Plus, the down payment assistance.

The most common combination is Great Choice + FHA, which provides a below-market rate FHA loan with down payment assistance. VA-eligible buyers can use Great Choice + VA for zero-down financing at a below-market rate. USDA-eligible buyers can use Great Choice + USDA for zero-down in rural areas.