Tennessee’s THDA builds its help around the Great Choice Home Loan, which comes with a choice of down payment assistance — a forgivable option or a larger amortizing one — plus a reduced-rate track for the state’s military and first responders.
This guide covers what is actually available to first-time buyers in Tennessee in 2026 — the agency behind these programs, the loans and down payment help on offer, who qualifies, and how to apply. For the wider local picture, see our Tennessee first-time home buyer guide.
The THDA and its home loan programs
Tennessee’s first-time buyer programs are run by the Tennessee Housing Development Agency (THDA). Like most housing finance agencies, it does not lend directly — instead it offers below-market first mortgages, bundled with down payment help, through a network of approved local lenders. Its main first-mortgage options are:
- Great Choice Home Loan — a 30-year fixed FHA, VA, USDA, or conventional loan
- Homeownership for the Brave — a reduced-rate Great Choice loan for military, veterans, and first responders
Most of these can be built on top of an FHA, VA, or USDA loan, or a conventional loan, depending on the product you pick — and the real value comes when you pair one with the down payment assistance below.
Down payment assistance in Tennessee
Down payment assistance is the heart of what THDA offers, and Tennessee gives buyers more than one way to get it. Great Choice Plus assistance comes in two forms, letting you pick a smaller forgivable amount or a larger repayable one.
- Great Choice Plus — Deferred Option — forgivable second at 0% interest (forgiven over 10 years), $6,000 or $10,000, no monthly payment.
- Great Choice Plus — Amortizing Option — repayable second (30-year term at the first-mortgage rate), up to 5% of the sales price, max $15,000.
If those terms are unfamiliar, our national guide to down payment assistance explains exactly how grants, forgivable second mortgages, and deferred loans differ — and what each one means when you eventually sell or refinance.
How much help could you get?
On a $280,000 home in Tennessee, the Great Choice Plus deferred option could provide $10,000 as a zero-interest second with no monthly payment, forgiven over ten years. If you need more, the amortizing option can reach up to 5% of the price (capped at $15,000), repaid alongside your first mortgage. Confirm the current amounts and county income limits with THDA.
Who qualifies in Tennessee?
Every program sets its own rules, and they change periodically, but the common requirements in Tennessee look like this:
- Income limits. THDA sets household income limits by county.
- First-time status. First-time status is required in non-targeted areas, and waived in targeted areas and for qualifying veterans.
- Credit score. A minimum of 640 applies. Our guide to credit score requirements covers what moves the needle.
- Homebuyer education. A THDA-approved homebuyer education course is required.
- Purchase price limits. Acquisition-cost/purchase-price limits apply by county.
Tennessee programs worth knowing about
Beyond the standard offerings, Tennessee aims extra help at specific buyers and places. Watch for:
- Homeownership for the Brave — a rate discount for military, veterans, and first responders
- Targeted-area provisions — waive the first-time requirement in designated areas
Mortgage Credit Certificates in Tennessee
THDA does not currently offer a standalone Mortgage Credit Certificate — verify current homebuyer tax-credit options with the agency. A Mortgage Credit Certificate is a federal tax credit worth a percentage of the mortgage interest you pay every year for the life of the loan, and where it is available it can usually be combined with the assistance above — putting money back in your pocket each tax season.
How to apply for Tennessee assistance
- Set your budget first. Our home affordability guide helps you land on a realistic price range before you start shopping.
- Complete a homebuyer education course. Nearly every Tennessee program requires one, and it is usually free and available online.
- Find a participating lender. Not every lender originates THDA loans, so ask directly which THDA programs a lender offers and have them run your numbers against a few.
- Get pre-approved and lock in the right program for your income, credit, and target home before you make an offer.
One important note: THDA program funding and terms change from year to year, and some assistance rounds close when the money runs out. Always confirm current amounts and availability directly with THDA before you count on a specific figure. Our first-time home buyer checklist keeps the rest of your process on track.
Tennessee first-time buyer programs FAQ
Do I have to be a first-time buyer to get assistance in Tennessee?
First-time status is required in non-targeted areas, and waived in targeted areas and for qualifying veterans.
What credit score do I need for THDA programs?
A minimum of 640 applies. Keep in mind a program’s own minimum can sit above the loan’s floor, so confirm the exact number with your lender.
Can I use Tennessee assistance with an FHA, VA, or USDA loan?
Yes. THDA assistance is built to layer on top of a first mortgage, and FHA, VA, and USDA loans are common partners because their own down payment requirements are already low. Your lender structures both pieces so they close together.
What is the difference between the two Great Choice Plus options in Tennessee?
The Deferred Option gives $6,000 or $10,000 as a zero-interest second with no monthly payment, forgiven over ten years — best if you want the lowest ongoing cost. The Amortizing Option gives more, up to 5% of the price (max $15,000), but you repay it over 30 years at your first-mortgage rate. A THDA lender can help you weigh the larger amount against the monthly payment.
More Tennessee city guides
Buying in a specific Tennessee metro? See our first-time buyer guides for Nashville and Memphis, each covering the city’s own local down payment programs.
Looking specifically for grants in Tennessee?
If you want to zero in on grant and forgivable money — the help you do not pay back — see our focused guide to first-time home buyer grants in Tennessee.