September 19, 2021

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Tennessee First-Time Homebuyer Assistance Programs

The pandemic has made many people think about new places to call home, and over the past year many of them have packed their bags for the same place: Tennessee. The volunteer state was the number 1 destination for U-Haul customers in 2020, according to the mover. Nashville’s downtown energy and country music charm certainly played a role in attracting new residents (the city earned a spot on Bankrate best places to live in 2021), but smaller cities like Knoxville, Bristol and Johnson City are also seeing growth.

If you are one First time buyer As you explore your options in the state, the Tennessee Housing Development Agency may be able to help make your move more affordable. The state-owned real estate finance agency works with a number of banks, credit unions, and mortgage lenders to make home buying a reality for first-time buyers.

Tennessee First Time Buyer Loan Programs

THDA Great Choice Home Loans

The Tennessee Housing Development Agency (THDA) offers first-time and repeat buyers the Great Choice Home Loan program, which can apply to a conventional loan, an FHA, a VA, or a USDA loan. These are 30 year fixed rate loans that vary by market and mortgage lender.

Borrower Requirements:

  • 3 percent down payment for conventional GC97 loan; 3.5 percent down payment for FHA or USDA loans (down payment assistance available)
  • Minimum score of 640
  • Must complete the Homebuyer training course
  • Must meet THDA Income limitswhich range from $ 66,800 to $ 115,200 depending on the state and household size

Ownership Requirements:

THDA home ownership for the brave

The THDA Homeownership for the Brave program is designed to help military personnel and their spouses by lowering the interest rate on a mortgage by half a percentage point. You don’t have to be a first-time home buyer to use this program, but you must complete a homebuyer training course to be eligible. You will also need a minimum credit value of 640 to meet the Great Choice program income and purchase price limits.

This option is available for:

  • Active soldiers, including the National Guard
  • Veterans (excluding those who have been dishonorably discharged)
  • Reservists with at least 180 days of active duty
  • Spouses and surviving spouses of qualified service members, reservists, and veterans

Tennessee Down Payment Assistance

THDA Great Choice Plus

If you are applying for Great Choice credit through THDA and need help raising the cash to meet down payment requirements and closing costs, Great Choice Plus is designed to ease that financial burden. This is a second mortgage that comes with the same interest rate as your first 30 year mortgage but has a shorter term: 15 years. You will repay the loan with monthly payments during this time. The requirements for borrowers are the same as for the Great Choice Loan program.

How Much Down Payment Help Can You Get With Great Choice Plus? It depends on the price of your home:

  • Under $ 150,000: $ 6,000
  • Over $ 150,000: $ 7,500

Other aid programs for homebuyers in Tennessee

When looking for property in specific areas of Tennessee, in addition to securing statewide support through one of the THDA programs, you can also consider other first-time homebuyer support offerings.

In Chattanooga, for example, the Chattanooga Neighborhood Enterprise offers a down payment service that covers up to 5 percent of the purchase price of a home for qualified buyers. It’s a second loan with an interest rate half a percentage point below your first mortgage.

In Memphis, certain first-time buyers could qualify for up to $ 10,000 down payment assistance from the city, available after five years.

Other first-time buyer loan programs

Outside of local and state offerings, contact Bankrate First-time buyer program guide to find out if you qualify for other forms of support available nationally.

For more home ownership programs in Tennessee, visit HUD.gov.

Getting started

To find out if you qualify for an affordable mortgage or down payment assistance in Tennessee, you should do this Check your credit score to make sure you have a 640 or higher. Then use the Tennessee Housing Development Authority (THDA). to lead to check that your income is within the boundaries of the county where you plan to buy.

Once you understand the options available, this is where you can go Compare interest rates and terms from the Mortgage lender that works with the THDA.

Learn more: