Tennessee Housing Development Agency (THDA)

What THDA does

The Tennessee Housing Development Agency was created by the Tennessee General Assembly to address affordable housing needs across the state. THDA raises capital by issuing mortgage revenue bonds, then uses those funds to offer below-market interest rates on home loans for qualifying buyers. The agency does not lend directly to consumers — it works through a network of approved lenders who originate loans under THDA's guidelines.

THDA's programs are designed for buyers who might otherwise struggle to afford homeownership — primarily first-time buyers and those with moderate incomes. The below-market rates and down payment assistance can meaningfully reduce the monthly cost of homeownership and the upfront cash required.

THDA's primary programs

Great Choice Home Loan: THDA's flagship program. A 30-year fixed-rate mortgage at a below-market interest rate, available with FHA, VA, USDA, or conventional financing. Designed for first-time buyers (or those who haven't owned in three years) who meet income and purchase price limits.

Great Choice Plus: A second mortgage providing down payment and closing cost assistance, paired with the Great Choice Home Loan. The assistance is structured as a deferred second mortgage that must be repaid if the home is sold or refinanced within a specified period.

Homeownership for Heroes: A reduced-rate version of the Great Choice program for active-duty military, veterans, and first responders. Available statewide without the first-time buyer requirement.

How THDA-approved lenders work

THDA does not lend directly. Buyers access THDA programs through THDA-approved lenders — mortgage companies, banks, and credit unions that have been approved to originate THDA loans. The lender originates the loan under THDA's guidelines, and THDA purchases the loan after closing.

Working with a THDA-approved lender is required to access THDA programs. Not all lenders are THDA-approved, and not all THDA-approved lenders are equally experienced with the programs. Morgan Hardy is an approved THDA lender and can originate Great Choice loans across Tennessee.

Important limitations to understand

THDA programs have meaningful limitations that buyers should understand before relying on them:

• Income and purchase price limits apply and vary by county — not all buyers or properties qualify
• THDA assistance is not a grant — Great Choice Plus must be repaid if you sell or refinance within the recapture period
• THDA rates, while below market, may not always be the lowest available rate for a well-qualified buyer
• Program availability and terms change — verify current requirements before making decisions based on THDA assistance
• Homebuyer education is required for most programs