First-Time Homebuyer Memphis & Nashville TN 2026: THDA Programs + Best Lenders Ranked
THDA Great Choice: 5.75% rate + 4% DPA grant · Memphis HOPE $20K · Nashville Housing Fund $25K · $0 down possible
No TN state income tax · FHA · VA · Conventional · USDA · THDA-approved lenders
🎸 Tennessee First-Time Buyer 2026 — Quick Answer
THDA Great Choice gives you a below-market rate (5.75% vs 6.15%) PLUS up to 4% DPA as a forgivable grant — forgiven after 10 years. On a $185K Memphis home with FHA (3.5% = $6,475), THDA gives $7,400 — covering your entire down payment. On a $435K Nashville home, THDA gives $17,400 + Nashville Housing Fund up to $25,000. Tennessee has no state income tax, boosting affordability 10-15% vs high-tax states. Top TN lender: Rocket Mortgage (5.85%, 21-day close). Compare Tennessee lenders →
🎸 Tennessee Mortgage Market Snapshot (July 2026)
$185,000
Memphis Median
$435,000
Nashville Median
5.75%
THDA Rate
$25,000
Max DPA (Nashville)
Memphis vs Nashville: Which Tennessee City Is Right for You?
| Factor | Memphis | Nashville |
|---|---|---|
| Median Home Price | $185,000 | $435,000 |
| Year-over-Year Change | +2.1% | +3.5% |
| Property Tax Rate | 1.67% (higher) | 0.75% (moderate) |
| THDA DPA (4% of loan) | $7,400 | $17,400 |
| City DPA Program | Memphis HOPE: $20K | Nashville Housing Fund: $25K |
| Job Market | Logistics, healthcare, FedEx HQ | Healthcare, tech, music, tourism |
| No State Income Tax | Yes ✓ | Yes ✓ |
| FHA 3.5% Down | $6,475 | $15,225 |
| Net Out-of-Pocket (FHA+DPA) | $0 | $0 |
Both cities benefit from Tennessee's no state income tax. Memphis is one of the most affordable US cities; Nashville has stronger appreciation. Compare rates for both cities →
Top 8 Tennessee Mortgage Lenders Compared (July 2026)
| Lender | Best For | Rate (30-Yr) | Min Credit | Close Time |
|---|---|---|---|---|
| 🥇 Rocket Mortgage | Fast digital close | 5.85% (FHA) | 580 | 21 days |
| 🥈 Guild Mortgage | THDA DPA specialist | 6.00% (FHA) | 580 | 28 days |
| 🥉 First Horizon Bank | Local Memphis bank | 6.00% (FHA) | 620 | 30 days |
| Regions Bank | Local Nashville bank | 6.05% (FHA) | 620 | 30 days |
| Veterans United | TN veterans (Fort Campbell) | 5.25% (VA) | 620 | 30 days |
| Churchill Mortgage | Self-employed / manual UW | 6.10% | 620 | 30 days |
| New American Funding | Bilingual / flexible | 5.95% (FHA) | 580 | 25 days |
| Freedom Mortgage | #1 FHA by volume | 5.90% (FHA) | 580 | 30 days |
THDA & Tennessee Down Payment Assistance 2026
Tennessee offers 4 major DPA programs for first-time buyers. THDA Great Choice is the flagship — below-market rate + forgivable DPA. Memphis and Nashville have additional city programs. Check your TN DPA eligibility →
THDA Great Choice (4% DPA)
Amount: Up to 4% of loan
Type: Forgivable grant (10-yr)
Income Limit: ≤$104,450 (most TN)
Below-market rate (5.75%) + DPA — statewide
THDA Great Choice Plus
Amount: Up to 5.5% of loan
Type: Deferred (0%)
Income Limit: ≤$104,450
Higher DPA as deferred second mortgage
Memphis HOPE Program
Amount: Up to $20,000
Type: Forgivable (5-yr)
Income Limit: ≤80% AMI (~$42K)
City of Memphis first-time buyers
Nashville Housing Fund
Amount: Up to $25,000
Type: Forgivable (10-yr)
Income Limit: ≤120% AMI (~$88K)
Nashville residents, first-time buyers
💡 Pro Tip: Stack THDA Great Choice + FHA = $0 Down
On a $185K Memphis home: FHA 3.5% down = $6,475. THDA Great Choice 4% DPA = $7,400 grant. The grant covers your entire down payment + $925 toward closing costs. After 10 years, the grant is 100% forgiven — you never repay it. Net out-of-pocket: $0. Apply for THDA Great Choice →
Tennessee-Specific Home Buying Tips for 2026
💰 No Tennessee State Income Tax
Tennessee has no state income tax on wages (Hall tax on investment income was repealed in 2021). On a $75K salary, you keep ~$3,500-$5,000 more per year vs. Georgia or North Carolina. This boosts your mortgage affordability — lenders calculate DTI on gross income.
⚠️ Memphis Property Taxes Are High
Memphis property taxes: 1.67% average (among highest in TN). On a $185K home, ~$3,090/year ($258/month). Factor this into affordability. Nashville is lower at 0.75% ($3,263/year on $435K). Apply for TN Greenbelt if buying rural/agricultural property — reduces property taxes.
🎸 Nashville Boom = Act Fast
Nashville is one of the fastest-growing US cities — 3.5% annual price appreciation. Healthcare HQs (HCA, Vanderbilt), tech (Amazon East Hub), and tourism drive demand. Get pre-approved BEFORE house hunting — competition is fierce. Get pre-approved for Nashville →
📊 Memphis = Most Affordable Major US City
Memphis median home price $185K is one of the lowest among major US cities. With THDA DPA, you can buy with $0 out of pocket. Strong rental market (FedEx, St. Jude, healthcare) = good investment potential. Just factor in higher property taxes and some neighborhood crime variation.
Real Example: Buy a $185K Memphis Home with $0 Down
| Item | Amount | Who Pays |
|---|---|---|
| Home Price | $185,000 | — |
| FHA Down Payment (3.5%) | $6,475 | You (or DPA) |
| THDA Great Choice DPA (4%) | -$7,400 | THDA (forgivable after 10 yr) |
| Closing Costs (~3%) | $5,550 | Seller concessions (up to 6%) |
| YOUR Out of Pocket | $0 | THDA + seller concessions |
Monthly payment: ~$1,580 (P&I $1,085 at 5.75% THDA rate + tax $258 + insurance $95 + MIP $142). With 640+ credit and THDA, you buy a Memphis home with $0 out of pocket. The $7,400 grant is forgiven after 10 years. See if you qualify →
Compare 5+ Tennessee Lenders in 2 Minutes
Same borrower, different lenders = up to 0.40% rate gap = $15,200 over 30 years on a $380K loan. Soft pull only — no SSN needed.
Tennessee First-Time Homebuyer FAQs 2026
What are the best first-time homebuyer programs in Tennessee 2026?
Tennessee first-time buyer programs 2026: (1) THDA Great Choice — 30-year fixed at below-market rate (5.75% vs 6.15% market) + up to 4% DPA as forgivable grant. (2) THDA Great Choice Plus — 5.5% DPA as deferred second mortgage (0% interest). (3) THDA Hardest Hit Fund — up to $15,000 for unemployed/underemployed buyers. (4) Memphis HOPE — up to $20,000 for Memphis first-time buyers ≤80% AMI. (5) Nashville Housing Fund — up to $25,000 for Nashville residents. All stackable with FHA/VA/Conventional. Check TN DPA eligibility →
What are the best mortgage lenders in Memphis TN?
Top Memphis mortgage lenders 2026: (1) Rocket Mortgage — 5.85% FHA, 21-day close, 580 credit. (2) Guild Mortgage — best for THDA programs, Memphis office. (3) First Horizon Bank — best local Memphis bank, THDA-approved, 6.00% FHA. (4) Veterans United — best for Memphis veterans (Naval Support Activity Memphis), 5.25% VA. (5) New American Funding — bilingual, flexible underwriting. (6) Freedom Mortgage — #1 FHA by volume. Compare Memphis lenders →
What are the best mortgage lenders in Nashville TN?
Top Nashville lenders 2026: (1) Rocket Mortgage — 5.85% FHA, 21-day close. (2) Guild Mortgage — THDA specialist, Nashville office. (3) Regions Bank — best local Nashville bank, THDA-approved. (4) Veterans United — best for Fort Campbell veterans, 5.25% VA. (5) Churchill Mortgage — Nashville-based, manual underwriting for self-employed. (6) Better.com — $0 origination, fully digital. Compare Nashville lenders →
How much down payment do I need to buy a house in Memphis or Nashville?
Memphis (median $185K): FHA 3.5% = $6,475. Conventional 3% = $5,550. VA $0 down. THDA Great Choice + 4% DPA = $7,400 grant (covers entire down payment + closing costs). Nashville (median $435K): FHA 3.5% = $15,225. Conventional 3% = $13,050. VA $0 down. THDA + 4% DPA = $17,400 grant. Nashville Housing Fund: up to $25,000. Get TN DPA →
What is the THDA Great Choice program?
THDA Great Choice is Tennessee's flagship first-time buyer program: 30-year fixed mortgage at below-market rate (5.75% vs 6.15% market in July 2026) PLUS up to 4% of loan amount as DPA. The DPA is a forgivable grant — forgiven after 10 years of living in the home. Requirements: 640+ credit, income ≤$104,450 (most TN areas), first-time buyer OR buying in targeted county, primary residence. Must use a THDA-approved lender. Apply for THDA Great Choice →
Is Memphis or Nashville a good place to buy a house in 2026?
Memphis: median $185K (one of the most affordable US cities), no state income tax, strong rental market. Property taxes higher (1.67%). Nashville: median $435K (up 3.5% YoY), booming job market (healthcare, tech, music), no state income tax, property taxes moderate (0.75%). Both cities benefit from Tennessee's no state income tax — boosts affordability 10-15% vs high-tax states. Get pre-approved →
Can I buy a house in Tennessee with no money down?
Yes! Three paths to $0 down in Tennessee: (1) VA loan — $0 down for veterans (5.25%, Fort Campbell/NSA Memphis). (2) USDA loan — $0 down in eligible rural TN areas. (3) FHA + THDA Great Choice — 3.5% down covered by 4% THDA DPA grant = $0 net out-of-pocket. On a $185K Memphis home: FHA down $6,475, THDA grant $7,400 = $0 out of pocket. On a $435K Nashville home: FHA down $15,225, THDA + Nashville Housing Fund = up to $42,400 in DPA. See if you qualify for $0 down →
Related Tennessee & First-Time Buyer Guides
Down Payment Assistance 2026 (All States)
Find $5K-$25K free grants in YOUR state
Best FHA Lenders 2026: Top 10 Ranked
580 credit, 3.5% down — nationwide comparison
Best VA Loan Lenders 2026
$0 down, 5.25% rate — Fort Campbell veterans
First-Time Buyer Programs 2026
Every state program compared — find yours
Ready to Buy in Tennessee? Get THDA DPA + Compare Rates
THDA Great Choice: 5.75% + 4% DPA. Memphis HOPE $20K. Nashville $25K. Top 8 TN lenders. $0 down possible. 2 minutes, no obligation.
Meet Sarah
Senior Mortgage Advisor & VA Loan Specialist
Sarah Mitchell brings over 12 years of mortgage industry expertise, specializing in VA loans and first-time homebuyer programs. As a certified NMLS professional, she has helped thousands of veterans and military families achieve homeownership through specialized loan programs. Her deep understanding of VA benefits and down payment assistance programs makes her a trusted advisor for service members transitioning to civilian life.
EXPERTISE:
KEY ACHIEVEMENT:
Helped 2,500+ veterans secure home loans