First-Time Homebuyer Memphis & Nashville TN 2026: THDA Programs + Best Lenders Ranked
THDA Great Choice: below-market 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 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 (Sept 2026)
$185,000
Memphis Median
$435,000
Nashville Median
Below-market
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 (Sept 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 + 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 ~$1,150 at THDA's below-market 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 a below-market rate + 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 a below-market rate (posted daily at thda.org, typically ~0.5% under market) 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: below-market rate + 4% DPA. Memphis HOPE $20K. Nashville $25K. Top 8 TN lenders. $0 down possible. 2 minutes, no obligation.
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