Tennessee First-Time Homebuyers Just Got a BIG Boost: THDA’s New & Improved Down Payment Assistance Options

If you’ve been waiting to buy a home in Tennessee because you don’t think you have enough money saved for the down payment or closing costs, this could be the news you’ve been waiting for.

$6,000	$10,000	Up to $15,000
Deferred • 0% interest • No monthly payment	Deferred • 0% interest • No monthly payment	Amortizing • Up to 5% of sales price

The Tennessee Housing Development Agency (THDA) has expanded its Great Choice Plus Down Payment Assistance options, giving qualified Tennessee homebuyers more flexibility when it comes to one of the biggest obstacles to buying a home: cash to close.

Qualified buyers may now be able to explore three different levels of assistance: up to $6,000, up to $10,000, or up to $15,000 depending on the option and program eligibility.

And these funds may be used toward eligible down payment and/or closing costs. That’s a meaningful improvement for Tennessee homebuyers – and it creates more ways to build a financing strategy around the buyer instead of forcing every buyer into the same box.

What Is THDA’s Great Choice Home Loan?

The Tennessee Housing Development Agency’s Great Choice Home Loan was created to make homeownership more attainable for qualified Tennesseans.

Great Choice provides eligible buyers with a 30-year, fixed-rate mortgage, and borrowers who qualify may also be able to combine their first mortgage with Great Choice Plus Down Payment Assistance.

The assistance can be used for eligible loan-related expenses, including the buyer’s down payment and/or closing costs.

That last part matters because one of the biggest misconceptions I hear from first-time buyers is: ‘I can probably afford the mortgage payment. I just don’t have enough money saved to buy the house.’ THDA’s Great Choice Plus program is designed to help address that problem.

Option #1: Up to $6,000 – With No Monthly Payment

Let’s start with the original deferred assistance option.

Qualified borrowers may receive up to $6,000 in down payment and/or closing cost assistance through a forgivable second mortgage.

The loan carries a 0% interest rate, requires no monthly payment, and is forgiven at the end of the 10-year term if program requirements are satisfied. If the home is sold or refinanced before the end of the 10-year term, the loan is due in full.

This option may be a great fit for a buyer who is already close to having enough money to purchase but needs a little extra help bridging the gap. Sometimes $6,000 is the difference between ‘almost ready’ and ‘ready.’

Option #2: Up to $10,000 – Also With No Monthly Payment

THDA’s newer deferred assistance level gives qualified borrowers access to up to $10,000 in assistance.

Like the $6,000 option, it features 0% interest, no monthly payment, and forgiveness at the end of the 10-year term if program requirements are satisfied. If the home is sold or refinanced before the end of that term, the assistance is due in full.

For the right buyer, the additional $4,000 compared with the $6,000 option could make a meaningful difference – whether that’s helping with the down payment, eligible closing costs, or preserving more cash after closing.

Getting into the house is important. Having money left after you get the keys is important too.

Option #3: Up to $15,000 in Assistance

What if you need more help upfront? That’s where THDA’s amortizing option becomes especially interesting.

Qualified borrowers may receive assistance equal to up to 5% of the home’s sales price, with a maximum assistance amount of $15,000.

Unlike the $6,000 and $10,000 deferred options, this assistance is structured as a 30-year amortizing second mortgage with a monthly payment. The interest rate is the same as the first mortgage.

This option may work well for buyers who need more assistance upfront and are comfortable including the second-mortgage payment in their monthly budget.

$6,000 vs. $10,000 vs. $15,000: Which THDA Option Is Best?

The goal shouldn’t simply be: ‘Which program gives me the most money?’

The better question is: ‘Which program puts me in the strongest financial position before and after I buy the home?’

A buyer who is almost ready may find the $6,000 deferred option is enough. A buyer who wants to preserve more savings may benefit from exploring the $10,000 deferred option. A buyer whose biggest obstacle is cash to close may want to compare the up-to-$15,000 amortizing option.

Three buyers. Three different financial situations. Three different strategies. That’s exactly why having more options matters.

Don’t Forget: THDA Assistance Can Help With Closing Costs Too

THDA states that Great Choice Plus assistance can be used for eligible loan-related expenses, including down payment and/or closing costs.

That creates some interesting planning opportunities. A buyer may already have enough money saved for the required down payment but may not want to empty a savings account paying closing costs and prepaid expenses.

Depending on the loan type and transaction, we may also be able to explore seller-paid closing costs as part of the overall strategy, subject to applicable loan-program limits and guidelines.

Instead of asking only, ‘What’s the minimum down payment?’ I want buyers asking, ‘What’s the smartest way to structure all of the money involved in buying this home?’

THDA Isn’t Just About Getting You Into the House

Being able to buy the home and being financially comfortable after buying the home are two different things.

Moving expenses, furniture, appliances, blinds, repairs, lawn equipment and the inevitable first trip to the home-improvement store can add up quickly.

That’s why preserving cash can matter. If a qualified buyer can strategically use THDA assistance instead of exhausting savings, they may enter homeownership with a stronger financial cushion.

Is THDA Available Across Tennessee?

Yes. THDA’s Great Choice program serves eligible homebuyers throughout the state of Tennessee, subject to program guidelines.

That means qualified buyers throughout Middle Tennessee, East Tennessee and West Tennessee may have options available – from Nashville, Franklin, Murfreesboro, Spring Hill and Clarksville to Chattanooga, Knoxville, Memphis, Jackson and communities in between.

Income limits, purchase-price limits and other eligibility requirements apply, so the best next step is to review the actual buyer and property rather than assuming a program will or will not work.

Who Can Qualify for a THDA Great Choice Loan?

THDA publishes eligibility requirements for Great Choice loans, and homebuyer education is required when using down payment assistance.

Income limits, purchase-price limits, occupancy requirements, credit standards and other underwriting guidelines apply. Program requirements can also vary based on loan type and borrower profile.

Great Choice is built with first-time homebuyers in mind, while THDA also provides certain pathways for eligible repeat buyers, buyers in targeted areas, and qualified military or veteran households.

The takeaway: don’t disqualify yourself before you have your situation reviewed.

Tennessee First-Time Buyers: Don’t Let the Down Payment Stop the Conversation

One of the biggest mistakes a potential buyer can make is deciding they can’t buy a home before ever talking with a lender.

I’ve heard some version of this countless times: ‘I’m going to wait until I save another $10,000.’ But what if you didn’t need to? What if the financing strategy included $6,000 in assistance? Or $10,000 with no monthly payment? Or as much as $15,000 in assistance?

Would that change the conversation? Maybe. And that’s the entire point.

You don’t have to decide whether you’re ready before you know what’s possible.

Realtors: This Is a Great Reason to Revisit Your Database

If you’re a Tennessee Realtor, think about every buyer who told you: ‘I don’t have enough money saved,’ ‘I’m going to wait until next year,’ or ‘The payment works, but the cash to close doesn’t.’

Those aren’t necessarily dead leads. They may simply be buyers who haven’t seen the right financing strategy yet.

A simple conversation starter is: ‘THDA recently expanded its down payment assistance options for qualified Tennessee buyers. Depending on your situation, you may have access to $6,000, $10,000 or as much as $15,000 in assistance. Before you decide to keep waiting, would it make sense to have Jeramy run the numbers and see whether one of these options changes anything for you?’

That’s not just a sales pitch. It’s bringing someone new information that could potentially solve the exact problem keeping them from buying.

You May Be Closer to Buying a Home Than You Think

If you’ve been sitting on the sidelines because of your down payment or closing costs, this is worth exploring.

Qualified Tennessee homebuyers may now have several Great Choice Plus strategies available: up to $6,000 with 0% interest and no monthly payment; up to $10,000 with 0% interest and no monthly payment; or up to 5% of the sales price, capped at $15,000, through a 30-year amortizing second mortgage.

The best option isn’t necessarily the one that provides the most money. It’s the one that best supports your overall homeownership strategy.

Want to Know Which THDA Option You Could Qualify For?

Let’s find out.

At The Williams Group at Fairway Home Mortgage, we’ll help you look beyond simply getting ‘approved.’ We’ll evaluate your income, credit, savings, purchase price, monthly payment, cash to close and available THDA assistance, then help you compare the options and build a mortgage strategy around your goals.

Because you may discover something pretty exciting: you don’t need another year to get ready. You may just need a better strategy. Let’s build your custom mortgage strategy and find out how close you really are to owning a home in Tennessee.