Quick answer
Tennessee first-time homebuyer programs include THDA’s Great Choice Home Loan, Great Choice Plus down payment assistance, FHA, VA, USDA, and 3%-down conventional loans. THDA can help eligible buyers with a fixed-rate mortgage and assistance toward their down payment or closing costs.
To qualify for most THDA options, buyers generally need a 640 credit score, homebuyer education, income within their county limit, and a home price at or below THDA’s current acquisition-cost limit. Confirm current requirements with THDA and your lender before applying.
Program details were verified in . Eligibility, income limits, loan terms, and assistance amounts can change. See the current THDA program rules before applying.
At a glance: THDA eligibility
- Credit score: 640 minimum for THDA programs
- First-time buyer rule: You generally cannot have owned and lived in a home during the past 3 years, with exceptions for veterans and certain targeted areas
- Homebuyer education: Required for THDA loans
- Income limits: Vary by county and household size
- Purchase-price limit: $500,000 statewide
- Assistance: Great Choice Plus may help with down payment and closing costs
What first-time homebuyer programs are available in Tennessee?
Tennessee buyers choose from two layers: a first mortgage, and optional down payment assistance on top of it. Statewide assistance comes from the Tennessee Housing Development Agency (THDA). The federal loan programs below are open to first-time and repeat buyers alike.
| Program | Administrator | Minimum down | Mortgage insurance | THDA assistance? | Who it fits |
|---|---|---|---|---|---|
| THDA Great Choice Home Loan | THDA (statewide) | 3.5% on FHA; 0% on VA or USDA | Follows the loan type (FHA, VA or USDA rules) | Yes, Great Choice Plus | First-time buyers, repeat buyers in targeted areas, veterans |
| THDA Great Choice Plus | THDA (statewide) | Covers part or all of the down payment and closing costs | None on the second mortgage | This is the assistance | Anyone approved for a Great Choice loan |
| THDA Freddie Mac HFA Advantage | THDA with Freddie Mac | 3% (conventional) | Private MI under 20% down; can be cancelled at 20% equity | Yes, Great Choice Plus | Buyers under the income limit; no first-time rule |
| FHA loan | HUD | 3.5% with a 580+ score | Upfront 1.75% plus annual MIP (0.55% on most loans), per HUD; lasts the life of the loan with under 10% down | Only as a THDA Great Choice loan | Buyers with smaller savings or past credit issues |
| VA loan | U.S. Dept. of Veterans Affairs | 0% | No monthly MI; one-time funding fee (2.15% on first use with 0% down) unless exempt | Only as a THDA Great Choice loan (closing costs) | Eligible veterans, service members, surviving spouses |
| USDA guaranteed loan | USDA Rural Development | 0% | Guarantee fee: 1% upfront plus 0.35% annual | Only as a THDA Great Choice loan (closing costs) | Buyers under the county income cap in an eligible area |
| Conventional 97, HomeReady, Home Possible | Fannie Mae / Freddie Mac | 3% | Private MI under 20% down; can be cancelled at 20% equity | Not on an outside loan; THDA’s version is HFA Advantage | Buyers with 620+ credit |
Sources: THDA program pages, HUD, VA and USDA (linked above), retrieved October 11, 2026. Mortgage insurance explained by the CFPB. Eligibility, limits and fees change; confirm current rules with the official program source and your lender before you rely on any figure. Program terms and eligibility are subject to THDA, agency and lender guidelines and may change.
Who qualifies as a first-time homebuyer in Tennessee?
For THDA, you count as a first-time buyer if you have not lived in a home you owned for at least three years. That means a past owner can qualify again. THDA also waives the requirement in three cases:
- Targeted counties. You buy in one of THDA’s 43 targeted counties, such as Cannon, Trousdale, Gibson or Hawkins.
- Targeted census tracts. You buy in a designated tract of another county marked on THDA’s limits chart, such as Davidson, Rutherford, Robertson, Knox, Hamilton, Shelby and Montgomery. This is decided by the property address, not the county.
- Veterans and military. Veterans with a DD-214 (honorable discharge) and qualified service members do not need to be first-time buyers anywhere in Tennessee.
THDA’s HFA Advantage conventional loan has no first-time requirement. FHA, VA, USDA and standard conventional loans have none either. Program terms and eligibility are subject to THDA and lender guidelines and may change.
What is THDA, and how does it help Tennessee homebuyers?
THDA is the Tennessee Housing Development Agency, the state’s housing finance agency, based in Nashville. It does not lend to you directly. Instead, it sets program rules and buys loans that THDA-approved lenders originate. Its homebuyer help comes in four pieces:
- Great Choice Home Loan: a 30-year fixed-rate first mortgage, usually FHA or USDA-insured, with VA and conventional options.
- Great Choice Plus: a down payment assistance second mortgage that can also pay closing costs.
- Homeownership for Heroes: a reduced interest rate for veterans, active-duty military, National Guard, reservists, surviving spouses, firefighters, law enforcement, EMTs and paramedics, emergency dispatchers, and full-time K-12 teachers and principals.
- Homebuyer education: low-cost classes taught by THDA-approved counselors.
All four run statewide, from Memphis to Johnson City. Program terms and eligibility are subject to THDA and lender guidelines and may change. (THDA Great Choice Loan Advantages)
How much down payment assistance can Tennessee buyers receive?
THDA’s Great Choice Plus pays up to $15,000, or up to $25,000 on new construction. It is a second mortgage, not a grant. You choose one of three structures:
Great Choice Plus is not a single benefit amount. The available assistance depends on the THDA first-mortgage product, whether the home is new construction, and whether you choose deferred or amortizing assistance.
| Option | Amount | Rate and term | When it is repaid |
|---|---|---|---|
| Deferred | $6,000 or $10,000, depending on the 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, max $15,000 | 30 years, same 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, retrieved October 11, 2026. On THDA’s HFA Advantage conventional loan, the deferred option is $6,000. Program terms and eligibility are subject to THDA and lender guidelines and may change.
Robertson County example, $350,000 home, FHA first mortgage. FHA needs 3.5% down, or $12,250. The $6,000 deferred option leaves $6,250 for the buyer to bring. The amortizing option allows up to $15,000, which covers the full $12,250 and leaves $2,750 for closing costs, but adds a second monthly payment.
Illustrative example only. Actual interest rates and APRs vary based on loan program, borrower qualifications, property, market conditions and other factors.
What credit score do you need for a THDA loan?
THDA requires a 640 credit score for everyone on the loan application, per THDA. If one co-borrower is at 620, the file does not qualify, even if the other is at 780. Program terms and eligibility are subject to THDA and lender guidelines and may change.
| Program | Minimum score | Set by |
|---|---|---|
| THDA Great Choice / Great Choice Plus / HFA Advantage | 640, every borrower | THDA |
| FHA | 580 for 3.5% down; 500–579 requires 10% down | HUD Handbook 4000.1, plus lender overlays |
| Conventional 3% down | 620 | Fannie Mae / Freddie Mac |
| USDA guaranteed | No published minimum; 640+ for automated approval | USDA Rural Development, plus lender overlays |
| VA | No VA minimum; most lenders use 580–620 | Lender overlay |
Below 640? THDA-approved counselors can help you work on your score, and FHA or VA may work while you rebuild. The CFPB’s housing counselor search lists HUD-approved counselors near you.
What are the income limits for Tennessee first-time homebuyer programs?
THDA’s income limits run from $94,900 to $139,320 for a one- or two-person household, and from $109,200 to $162,540 for three or more. The limit depends on the county. Nashville-area counties sit at the top; most targeted rural counties are at $113,880 / $132,860.
| County (largest city) | 1–2 persons | 3+ persons |
|---|---|---|
| Davidson (Nashville), Rutherford, Williamson, Wilson, Sumner, Robertson, Cheatham, Dickson | $139,320 | $162,540 |
| Maury (Columbia) | $124,320 | $145,040 |
| Knox (Knoxville), Blount, Anderson | $103,700 | $119,255 |
| Shelby (Memphis) | $102,794 | $118,214 |
| Montgomery (Clarksville) | $102,574 | $117,961 |
| Hamilton (Chattanooga) | $101,854 | $117,133 |
| Sullivan (Kingsport) | $98,160 | $114,520 |
| Washington (Johnson City) | $96,720 | $112,840 |
| Madison (Jackson) | $95,400 | $111,300 |
| Targeted counties (most, e.g. Gibson, Lincoln, Hawkins) | $113,880 | $132,860 |
Source: THDA Acquisition Cost & Income Limits by County, Great Choice and HFA Advantage programs, effective August 1, 2026. Program terms and eligibility are subject to THDA and lender guidelines and may change.
Two details matter. THDA counts all household income for Great Choice, not just the borrowers’. For HFA Advantage, only the borrowers’ qualifying income counts, and the 3+ person limit applies to every household size. USDA has separate caps; Robertson County’s is $133,550 for a 1–4 person household as of September 2026.
Can I use down payment assistance with an FHA, VA, USDA, or conventional loan?
Yes, all four, as long as the first mortgage is a THDA loan. Great Choice Plus only attaches to a Great Choice first mortgage or THDA’s HFA Advantage loan. You cannot add it to an outside FHA or conventional loan.
| First mortgage | Down payment required | What THDA assistance covers |
|---|---|---|
| FHA (Great Choice) | 3.5% | Part or all of the 3.5%, plus closing costs |
| VA (Great Choice, veterans and military) | 0% | Closing costs and prepaids |
| USDA guaranteed (Great Choice) | 0% | Closing costs and prepaids |
| Conventional (Freddie Mac HFA Advantage) | 3% | Part or all of the 3%, plus closing costs |
VA and USDA already finance 100%, so the assistance goes to closing costs. Gifts from family are allowed on all four. Program terms and eligibility are subject to THDA, agency and lender guidelines and may change.
What are the home price limits for THDA programs?
The THDA price limit is $500,000 in every Tennessee county. THDA calls it the “acquisition cost limit.” It does not vary by household size or by targeted status. Source: THDA Acquisition Cost & Income Limits by County, effective August 1, 2026. Program terms and eligibility are subject to THDA and lender guidelines and may change.
The federal loan underneath has its own ceiling. The 2026 FHA and conforming limit for a one-unit home in the Nashville metro is $1,029,250 (HUD, CY2026), so the THDA cap is the one that binds.
Do I need to take a homebuyer education class in Tennessee?
Yes, for any THDA loan. THDA requires homebuyer education for every borrower, so everyone on the loan completes it. FHA, VA and standard conventional loans do not require it, though some 3%-down conventional loans do. For the wider process, see the CFPB’s homebuying guide. Per THDA’s education FAQ:
| Format | Cost per household | Length | Notes |
|---|---|---|---|
| In-person or virtual class | $25–$100, set by the agency | 6–8 hours, instructor-led | Spanish-speaking counselors available |
| Online (eHome America) | $100 | Self-paced, then a counseling session | Counseling must happen within 7 business days of finishing the course |
The certificate is valid for 12 months. THDA recommends taking the class first, and no later than four weeks before closing. CreditSmart, HomeReady and FrameWorks certificates are not accepted. Program terms are subject to THDA guidelines and may change.
How do I apply for THDA down payment assistance?
You don’t apply to THDA directly. THDA loans are made through THDA-approved lenders, and a mortgage broker like Valor Mortgage can submit your file to a wholesale investor that is THDA-approved. You get one point of contact, and the first mortgage and the assistance go on one application.
- Take the homebuyer education class. Start it first; the certificate is good for 12 months.
- Get pre-approved. Your loan officer checks your credit score, household income and your county’s limits, and confirms which deferred amount you qualify for.
- Choose the assistance structure. Deferred or amortizing, based on how much cash you have and how long you plan to stay.
- Find a home under $500,000 and sign a contract.
- Your loan is submitted to a THDA-approved investor, which reserves the THDA funds, underwrites the file and sends it to THDA for its compliance review.
- Close. The THDA second mortgage closes the same day as the first.
What documents do I need to apply for a first-time homebuyer loan?
Most lenders ask for the same core set. THDA loans add proof of household income and the education certificate. Use this as a checklist:
- Government photo ID for each borrower
- Pay stubs covering the last 30 days
- W-2s for the last two years
- Federal tax returns for the last two years (all pages), especially if self-employed or paid commission
- Bank statements for the last two months (all pages)
- Gift letter and donor’s bank statement, if family is helping
- Signed purchase contract, once you have one
- THDA: homebuyer education certificate
- THDA: income for every adult in the household, including people not on the loan
- THDA: prior-year tax returns, used to confirm you have not owned a home in three years
- VA: Certificate of Eligibility or DD-214
- Divorce or child support: the decree or court order
Your lender may ask for more, depending on your file.
Which Tennessee first-time homebuyer program is right for me?
The right program depends on four things: military service, the property’s address, your credit score and your savings. Start with the first row that describes you.
| If you… | Look first at | Why |
|---|---|---|
| Are a veteran, service member or surviving spouse | VA loan, alone or through THDA Homeownership for Heroes | 0% down, no monthly mortgage insurance; THDA adds a reduced rate and closing-cost help |
| Are a teacher, firefighter, police officer, EMT or dispatcher | THDA Homeownership for Heroes | Reduced rate plus Great Choice Plus assistance |
| Are buying in a USDA-eligible area under the income cap | USDA guaranteed loan, with or without THDA | 0% down; THDA assistance can pay closing costs |
| Have a 640+ score, little savings, and plan to stay 10+ years | FHA + THDA Great Choice Plus, deferred | Assistance is forgiven after 10 years |
| Need the full down payment covered and can carry a second payment | FHA + THDA Great Choice Plus, amortizing | Up to $15,000, repaid over 30 years |
| Have a 680+ score, or have owned a home recently | Conventional 3% down or THDA HFA Advantage | Mortgage insurance can be cancelled at 20% equity; no first-time rule on HFA Advantage |
| Have a score of 580–639 | FHA without THDA | 3.5% down; THDA’s 640 floor does not apply |
| Are buying over $500,000 or earn over the county limit | FHA, VA or conventional without THDA | THDA’s caps do not apply |
Compare total cost, not just cash to close. The deferred assistance is due in full if you sell or refinance within 10 years. Mortgage insurance costs vary by loan type, credit score and loan amount (see the CFPB’s mortgage insurance guide). Program terms and eligibility are subject to THDA, agency and lender guidelines and may change.
Tennessee first-time homebuyer FAQ
Can first-time homebuyers get down payment assistance in Tennessee?
Yes. THDA’s Great Choice Plus is statewide down payment assistance for buyers using a THDA Great Choice or HFA Advantage first mortgage. It is a second mortgage that can cover down payment and closing costs. Buyers need a 640 credit score, homebuyer education, income under the county limit and a price of $500,000 or less. Program terms and eligibility are subject to THDA and lender guidelines and may change.
Is THDA down payment assistance a grant or a loan?
A loan. Great Choice Plus is a second mortgage, not a grant. The deferred option ($6,000 or $10,000, depending on the first-mortgage product) has 0% interest and no monthly payment, and is forgiven after 10 years, but is due in full if you sell or refinance sooner. The amortizing options are repaid monthly. Program terms and eligibility are subject to THDA and lender guidelines and may change.
What credit score is required for a THDA loan?
THDA requires a minimum 640 credit score for every borrower on the application, not only the primary borrower. If any co-borrower is below 640, the loan does not qualify for THDA. Buyers between 580 and 639 may still qualify for an FHA loan without THDA assistance, subject to lender requirements. Program terms and eligibility are subject to THDA and lender guidelines and may change.
Can repeat buyers use THDA programs?
Yes, in several cases. THDA treats you as a first-time buyer if you have not lived in a home you owned in the past three years. The rule is waived in THDA’s 43 targeted counties, in targeted census tracts, and for eligible veterans and service members. THDA’s Freddie Mac HFA Advantage loan has no first-time rule. Program terms and eligibility are subject to THDA and lender guidelines and may change.
Can VA and USDA borrowers use THDA assistance?
Yes, when the VA or USDA loan is made as a THDA Great Choice loan. Because VA and USDA loans can finance 100% of the price, Great Choice Plus generally goes toward closing costs and prepaid items rather than a down payment. It cannot be added to a VA or USDA loan made outside THDA. Program terms and eligibility are subject to THDA, agency and lender guidelines and may change.
How much money should a first-time buyer save before buying a home in Tennessee?
It depends on the loan, the price and any assistance. Plan for the minimum down payment (0% VA or USDA, 3% conventional, 3.5% FHA), closing costs, prepaid items, earnest money and an inspection, plus savings left after closing. On an illustrative $350,000 FHA purchase, 3.5% down is $12,250; budget roughly $6,000 to $10,000 more in closing costs and prepaids, though actual costs vary by lender, county, and loan type. THDA assistance or seller credits may cover part of the total. Your Loan Estimate will itemize every charge.
Where these figures come from
| Figure | Source | As of |
|---|---|---|
| Great Choice Plus amounts and terms | THDA, Down Payment Assistance | Retrieved Oct 11, 2026 |
| 640 score, Homeownership for Heroes, loan types | THDA, Great Choice Home Loan | Retrieved Oct 11, 2026 |
| First-time definition, targeted areas | THDA, Repeat Homebuyers | Retrieved Oct 11, 2026 |
| HFA Advantage terms | THDA, Freddie Mac HFA Advantage | Retrieved Oct 11, 2026 |
| Income and $500,000 acquisition limits | THDA Acquisition Cost & Income Limits by County | Effective Aug 1, 2026 |
| Homebuyer education cost, format, validity | THDA, Homebuyer Education FAQs | Retrieved Oct 11, 2026 |
| FHA score tiers | HUD Single Family Housing Policy Handbook 4000.1 | Current handbook |
| 2026 FHA and conforming limits | HUD FHA Mortgage Limits, CY2026 | Revised Jan 1, 2026 |
| USDA income cap (Robertson County) | USDA Income and Property Eligibility site | Retrieved Sept 11, 2026 |
| FHA upfront and annual mortgage insurance premiums | HUD Mortgagee Letter 2023-05 | Effective Mar 20, 2023 |
| VA funding fee | VA, Funding Fee and Closing Costs | Retrieved Oct 11, 2026 |
| USDA guarantee fee, program rules | USDA Rural Development, Single Family Housing Guaranteed Loan Program | Retrieved Oct 11, 2026 |
| How mortgage insurance works; housing counselors | CFPB, Mortgage Insurance · CFPB, Find a Housing Counselor | Retrieved Oct 11, 2026 |
Related guides
- Down payment assistance, FHA loans, VA loans and USDA loans program pages.
- Can you buy a home with no down payment in Tennessee?
- Robertson County mortgage guide: county THDA, USDA and loan limits.
- How to buy your first home.
- About Christopher Armantrout, the licensed originator who wrote and reviews this page.
Call me at (615) 671-9178. That’s the fastest way to get a straight answer on what you’d qualify for and which Tennessee program fits you.
If it’s after hours, grab a time on my calendar. Pick a slot that works and I’ll call you then.
If your life is too chaotic for a phone call right now — I understand — 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.