Tennessee First-Time Buyer Programs

Tennessee Housing Development Agency (THDA) Programs:

THDA’s Great Choice mortgage and linked down-payment assistance remain the primary statewide option for first‑time and moderate‑income buyers. THDA offers 30‑year fixed mortgages through approved lenders and two standard DPA choices that must be used with a qualifying THDA first mortgage. Verify current rates, county income/purchase limits, and targeted-area rules with a THDA‑approved lender or THDA before applying.

Tennessee First-Time Homebuyer Mortgage Programs:

Eligibility: First-time buyers (no primary residence in past 3 years; repeat‑buyer exceptions in targeted areas); income- and purchase-price limits vary by county.
Offerings: 30‑year fixed THDA home loans (can pair with FHA, VA, USDA, or conventional products via THDA bond or HFA channels).
Requirements:

• County-specific household income limits — check the latest THDA chart for exact numbers. (See THDA’s income limits PDF.)
• Credit score: THDA typically documents a 640 minimum for many products; 620 may be possible for some loan types or with compensating factors — confirm with your lender.
• Debt-to-income: underwriters commonly target ~45% max DTI; case-by-case allowances (up to ~50%) may be possible with compensating factors.
• Homebuyer education is required for most THDA loans — complete a THDA‑approved course early in the process.

Down Payment Assistance (DPA) Options (THDA Great Choice Plus / HFA Plus):

Two standard THDA DPA choices:

• Deferred (no monthly payments): Flat $6,000 forgivable second mortgage (0% interest; due on sale/refinance or forgiven per program terms). See THDA for exact forgiveness terms and exceptions.
• Amortizing (monthly payments): Up to 5% of the sales price (commonly capped at $15,000) as a subordinate loan amortized over a long term (paired with the first mortgage interest rate).

Both options are normally available only alongside a qualifying THDA first mortgage. For official details, see THDA’s DPA page and Great Choice program materials.

Tennessee Homeownership for Heroes:

Description: Enhanced benefits for eligible public servants (military, veterans, teachers, law enforcement, firefighters, EMTs, healthcare workers in some tiers). THDA’s Homeownership for Heroes commonly provides a small interest-rate reduction on the first mortgage (about 0.5%) and access to the same DPA options when eligible. Check occupation documentation rules with THDA or your lender.

Local Programs (Examples):

Cities and counties often layer local DPA or forgivable second loans on top of THDA assistance — funding and terms change often. Below are official program entry points to confirm availability.

Nashville / Davidson County

NeighborhoodLIFT (AHR): Affordable Housing Resources (AHR) administers NeighborhoodLIFT in the Nashville area; the program has historically offered up to $15,000 in down‑payment assistance on qualifying properties in certain Middle Tennessee counties (Davidson, Rutherford, Sumner, Wilson). See AHR for current availability and income limits: AHR NeighborhoodLIFT.

Memphis / Shelby County

Memphis‑Shelby programs: Shelby County and the City of Memphis administer Helping Homebuyers / HCD programs and HOME-funded DPA that vary by funding round. Check the official Shelby County program documents for current amounts and eligibility: Memphis‑Shelby Helping Homebuyers (official).

Knoxville / Knox County

City of Knoxville programs: Knoxville’s Housing & Neighborhood Development coordinates local DPA, developer‑paired offers, and project‑specific assistance (availability varies; some programs require purchasing from approved developers). See the City of Knoxville housing page for local options and requirements: Knoxville Housing.

Additional Notes:

• USDA: 0% down in eligible rural areas — income and property‑location limits apply.
• VA: 0% down for eligible veterans/active-duty borrowers (lender overlays apply).
• FHA: 3.5% down (minimum credit 580 for the low‑down option; higher down/credit requirements apply for lower scores).

Always verify: income limits, sales‑price caps, and local DPA funds with the official program page or a THDA‑approved lender before preparing an offer. Official links: THDA program pages and income limits — THDA DPA, Great Choice details, and THDA income limits (PDF).

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