Down Payment Assistance in Tennessee: THDA Great Choice Plus and More
How much THDA's Great Choice Plus pays, who qualifies, the 2026 county income limits, and The Housing Fund's statewide option.
Quick answer
Tennessee’s main down payment assistance is THDA’s Great Choice Plus: a $6,000 or $10,000 deferred second mortgage that is forgiven after 10 years, or an amortizing second mortgage of up to 5% of the price, capped at $15,000 ($25,000 on new construction).
It requires a THDA Great Choice or HFA Advantage first mortgage, a 640 credit score for every borrower, homebuyer education, and income and price within THDA’s county limits.
Program figures on this page were verified on THDA’s and The Housing Fund’s websites in October 2026, using THDA limits effective August 1, 2026. Program terms and eligibility are subject to THDA, The Housing Fund and lender guidelines and may change.
At a glance: down payment assistance in Tennessee
- THDA Great Choice Plus: $6,000 or $10,000 deferred, or up to 5% / $15,000 amortizing
- New construction: up to $25,000, 15 years at 0%
- Credit: 640 minimum for everyone on the THDA loan
- Limits: $500,000 price cap statewide; income caps from $94,900 to $162,540 by county and household size
- First-time rule: no home owned in 3 years, with waivers for 43 targeted counties, targeted tracts and veterans
- Second option: The Housing Fund, up to $35,000, with 1% of the price from the buyer
How does THDA Great Choice Plus work?
Great Choice Plus is a second mortgage from the Tennessee Housing Development Agency (THDA), not a grant. It closes the same day as your first mortgage and can pay your down payment, closing costs, or both. You choose one structure:
| Option | Amount | Rate and term | When it is repaid |
|---|---|---|---|
| Deferred | $6,000 or $10,000, depending on the THDA first-mortgage product | 0% interest, no monthly payment, 10-year term | Forgiven after 10 years; due in full if you sell or refinance sooner |
| Amortizing | Up to 5% of the sales price, maximum $15,000 | 30 years, same interest rate as the first mortgage | Monthly payments |
| Amortizing, new construction | Up to $25,000 | 15 years, 0% interest | Monthly payments |
Source: THDA, Down Payment Assistance, checked October 27, 2026. On THDA’s Freddie Mac HFA Advantage conventional loan, the deferred option is $6,000. Program terms and eligibility are subject to THDA and lender guidelines and may change.
The deferred option suits buyers who plan to stay at least 10 years and can cover the rest of the down payment. The amortizing option covers more but adds a second monthly payment.
Which first mortgages can you pair with Great Choice Plus?
Only THDA’s own first mortgages: the Great Choice Home Loan (FHA, VA or USDA-insured, 30-year fixed) or THDA’s Freddie Mac HFA Advantage conventional loan. You can’t add Great Choice Plus to an outside FHA or conventional loan.
| THDA first mortgage | Minimum down payment | What the assistance usually covers |
|---|---|---|
| FHA (Great Choice) | 3.5% | Part or all of the 3.5%, plus closing costs |
| VA (Great Choice) | 0% | Closing costs and prepaids |
| USDA guaranteed (Great Choice) | 0% | Closing costs and prepaids |
| Conventional (HFA Advantage) | 3% | Part or all of the 3%, plus closing costs |
Source: THDA, Great Choice Home Loan and THDA, Freddie Mac HFA Advantage, checked October 27, 2026. Program terms and eligibility are subject to THDA, agency and lender guidelines and may change.
Who qualifies for THDA down payment assistance?
- Credit: a 640 score for everyone on the loan application, per THDA. A co-borrower at 620 makes the file ineligible even if the other borrower is at 780.
- Homebuyer education: required for every borrower, from a THDA-approved counselor. The certificate is good for 12 months.
- Primary residence: you must live in the home.
- Income and price: within THDA’s county limits (next section).
- First-time buyer status, unless a waiver applies (below).
Program terms and eligibility are subject to THDA and lender guidelines and may change.
What are THDA’s income and price limits?
The price limit (THDA’s “acquisition cost limit”) is $500,000 in every Tennessee county. Income limits depend on the county and household size:
| County (largest city) | 1–2 persons | 3+ persons |
|---|---|---|
| Davidson (Nashville), Robertson, Sumner, Williamson, Wilson, Rutherford, Cheatham, Dickson | $139,320 | $162,540 |
| Maury (Columbia) | $124,320 | $145,040 |
| Knox (Knoxville) | $103,700 | $119,255 |
| Shelby (Memphis) | $102,794 | $118,214 |
| Montgomery (Clarksville) | $102,574 | $117,961 |
| Hamilton (Chattanooga) | $101,854 | $117,133 |
| Madison (Jackson) | $95,400 | $111,300 |
| Most targeted counties (e.g. Gibson, Lincoln, Hawkins) | $113,880 | $132,860 |
Source: THDA Acquisition Cost & Income Limits by County, Great Choice and HFA Advantage, effective August 1, 2026. Great Choice counts income from every adult in the household, not only the borrowers; HFA Advantage counts only the borrowers’ qualifying income. Program terms and eligibility are subject to THDA and lender guidelines and may change.
Do you have to be a first-time buyer?
For a Great Choice loan, generally yes, but THDA defines first-time as not having lived in a home you owned for at least three years. THDA waives the rule if you buy in one of its 43 targeted counties, buy in a designated census tract in 15 other counties (decided by the property address), or are a qualified veteran or service member. HFA Advantage has no first-time requirement. Program terms and eligibility are subject to THDA and lender guidelines and may change.
What is THDA Homeownership for Heroes?
A Great Choice option with a reduced interest rate set by THDA, available on FHA, VA and USDA loans, and it can be paired with Great Choice Plus. It is open to active-duty military, National Guard and veterans; firefighters; EMTs and paramedics; state and local law enforcement officers; public safety emergency dispatchers; and full-time K–12 teachers and principals at a Tennessee public or private school. For qualified military and veterans, THDA also waives the first-time buyer rule. See first responder loans and teacher loans. Program terms and eligibility are subject to THDA and lender guidelines and may change.
Are there other down payment assistance programs in Tennessee?
Yes. The Housing Fund, a nonprofit community development lender in Madison, Tennessee, offers a down payment assistance loan of up to $35,000 statewide. Unlike Great Choice Plus, it can sit behind an outside FHA, VA, USDA or conventional first mortgage.
| Feature | THDA Great Choice Plus | The Housing Fund |
|---|---|---|
| Maximum assistance | $15,000 ($25,000 new construction) | $35,000 |
| Buyer contribution | None required beyond the loan’s minimum | At least 1% of the sales price |
| Credit score | 640, every borrower | 600 for requests under $10,000; 620 at $10,000 or more |
| Income limit | THDA county limits (above) | Up to 120% of area median income |
| First mortgage | THDA loans only | FHA, VA, USDA or conforming conventional |
| Debt-to-income cap | Set by the first-mortgage program | 45% |
| Combined loan-to-value | Set by THDA | Up to 104% |
| Homebuyer education | Required | Required (THDA-approved course) |
Sources: THDA (linked above); The Housing Fund, Down Payment Assistance, Income Guidelines (2026 HUD AMIs) and DPA Underwriting Checklist (updated January 2025), checked October 27, 2026. The Housing Fund sets its own loan rate and repayment terms; ask them for current terms. Program terms and eligibility are subject to THDA, The Housing Fund and lender guidelines and may change.
Some Tennessee cities and counties also run their own programs with separate rules and funding cycles. I’ll check which ones apply to the address you’re buying.
What does assistance look like on a $350,000 home in Robertson County?
| Item | THDA FHA + deferred | THDA FHA + amortizing |
|---|---|---|
| Purchase price | $350,000 | $350,000 |
| FHA minimum down payment (3.5%) | $12,250 | $12,250 |
| Great Choice Plus | $6,000 (0%, forgiven after 10 years) | $15,000 (5% of price is $17,500, capped at $15,000) |
| Left for the buyer to cover | $6,250 of the down payment, plus closing costs | $0 of the down payment; $2,750 left toward closing costs |
| Second monthly payment? | No | Yes, 30 years |
| Robertson County THDA limits | Income $139,320 (1–2 persons) / $162,540 (3+); price $500,000, so this home fits | |
Illustrative example only. Actual interest rates and APRs vary based on loan program, borrower qualifications, property, market conditions and other factors. Closing costs, prepaid taxes and insurance and FHA mortgage insurance are not shown. Program terms and eligibility are subject to THDA, HUD and lender guidelines and may change.
To try your own numbers, including the property tax for a specific Tennessee address, use the Tennessee mortgage calculator.
What are the catches with down payment assistance?
- Great Choice Plus is a loan. The deferred amount is due in full if you sell or refinance within 10 years.
- The amortizing option adds a second monthly payment, which counts in your debt-to-income ratio.
- THDA’s first-mortgage rate can differ from an outside loan’s rate, so compare the total cost, not just the cash to close.
- The 640 score applies to every borrower, and household income counts people who aren’t on the loan.
- THDA files add steps: education, an income check on every adult, and THDA’s compliance review, so allow extra time before closing.
Down payment assistance FAQ
Is THDA down payment assistance a grant?
No. Great Choice Plus is a second mortgage. The deferred option has 0% interest and no payment and is forgiven after 10 years, but it is due in full if you sell or refinance sooner. The amortizing options are repaid monthly. Program terms are subject to THDA and lender guidelines and may change.
What credit score do you need for Tennessee down payment assistance?
THDA requires 640 for everyone on the loan. The Housing Fund requires 600 for requests under $10,000 and 620 for $10,000 or more. Lenders can set higher minimums. Program terms and eligibility are subject to THDA, The Housing Fund and lender guidelines and may change.
How much down payment assistance can you get in Tennessee?
THDA Great Choice Plus pays $6,000 or $10,000 deferred, or up to 5% of the price with a $15,000 cap amortizing, or up to $25,000 on new construction. The Housing Fund lends up to $35,000. Terms are subject to each program’s and the lender’s guidelines and may change.
Can repeat buyers get THDA assistance?
Yes, if you haven’t lived in a home you owned for three years, you buy in a targeted county or census tract, or you are a qualified veteran or service member. THDA’s HFA Advantage conventional loan has no first-time rule. Program terms and eligibility are subject to THDA and lender guidelines and may change.
How do you apply for THDA down payment assistance?
Through a THDA-approved lender, not THDA directly. As a broker, I submit your file to a THDA-approved wholesale investor, so the first mortgage and the assistance go on one application. Take homebuyer education early; THDA recommends finishing it at least four weeks before closing.
Can you use down payment assistance with a VA or USDA loan?
Yes. VA and USDA loans already finance 100%, so THDA’s assistance on a Great Choice VA or USDA loan goes to closing costs and prepaids. The Housing Fund can also be paired with VA or USDA first mortgages. Program terms are subject to THDA, agency and lender guidelines and may change.
Where these figures come from
| Figure | Source | As of |
|---|---|---|
| Great Choice Plus amounts, rates and terms | THDA, Down Payment Assistance | Checked Oct 27, 2026 |
| 640 score, loan types, Homeownership for Heroes | THDA, Great Choice Home Loan | Checked Oct 27, 2026 |
| First-time buyer waivers | THDA, Repeat Homebuyers | Checked Oct 27, 2026 |
| Income and price limits by county | THDA Acquisition Cost & Income Limits | Effective Aug 1, 2026 |
| HFA Advantage deferred amount and income rule | THDA, Freddie Mac HFA Advantage | Retrieved Oct 11, 2026 |
| The Housing Fund amount, 1% contribution, income tier | The Housing Fund, DPA; Income Guidelines | Checked Oct 27, 2026 |
| The Housing Fund credit, DTI and CLTV rules | THF DPA Underwriting Checklist | Updated Jan 2025 |
| FHA 3.5% minimum | HUD Handbook 4000.1 | Current handbook |
Related guides
- Tennessee first-time homebuyer programs, with the full THDA income-limit table.
- Can you buy a home with 0% down in Tennessee?
- FHA, VA, USDA and conventional loan pages.
- Robertson County mortgage guide.
- Buying or refinancing around Music City? See my Nashville, TN mortgage broker page.
- About Christopher Armantrout, the licensed originator who wrote this page.
Call me at (615) 671-9178. I’ll check your county’s THDA limits, tell you which assistance option fits how long you plan to stay, and show you what you’d bring to closing.
If it’s after hours, grab a time on my calendar, or start an application and I’ll review it and reach out with a plan.
Valor Mortgage, LLC · Christopher Armantrout, Mortgage Loan Originator, NMLS #1210804 · Valor Mortgage, LLC is powered by Encore Lending Group, LLC, NMLS #1249911 · Licensed in Tennessee · Equal Housing Opportunity
724 S Main St, Springfield, TN 37172 · (615) 671-9178 · christopher@valor.mortgage · NMLS Consumer Access
The dollar figures on this page are illustrative examples for general information only and are not an offer, a rate quote, or a commitment to lend. Actual interest rates and APRs vary based on loan program, borrower qualifications, property, market conditions and other factors. Program fees, limits and terms are set by the agencies named above and change without notice; all loans are subject to credit approval, income verification and property appraisal. Not all applicants will qualify.