Tennessee First-Time Home Buyer Programs 2026: THDA Grants, DPA & Nashville Assistance
THDA Great Choice: below-market rate + up to 6% down payment assistance. Nashville boom buyers: $30K grants available.
640+ credit • Purchase price up to $475K (Nashville) • Statewide programs + city grants
⚡ Quick Answer: Tennessee First-Time Buyer Programs 2026
Main State Programs:
- ✅ THDA Great Choice — below-market 30-yr rate
- ✅ Great Choice Plus — up to 6% DPA ($0 monthly)
- ✅ Homeownership for the Brave — veterans only
- ✅ HHF-DPA — up to $15K targeted counties
City Programs:
- 🏙️ Nashville BSDI — up to $30,000 forgivable
- 🏙️ Memphis DAP — up to $10,000
- 🏙️ Knoxville KCDC — up to $8,000
- 🏙️ Chattanooga CDFI — up to $12,500
⚠️ ATTENTION: NOT ALL LENDERS ARE APPROVED FOR THDA PROGRAMS
Don't Waste Time with the Wrong Lender — Most Are Not THDA-Approved
The THDA Great Choice program requires you to work with a THDA-approved participating lender. Using a lender that isn't certified means your DPA grant disappears — even if you qualify. Match with a verified TN-approved lender right now:
| # | Lender | Rate | Min Credit | Close | Best For | Apply |
|---|---|---|---|---|---|---|
| #1 | Rocket Mortgage 🏆 BEST OVERALL | 6.50% | 640 | 21-30d | Best overall + fastest close | Apply → |
| #2 | FirstBank 🏦 TN LOCAL | 6.45% | 640 | 30-45d | Best TN-local THDA expert (Nashville) | Apply → |
| #3 | Veterans United 🎖️ VA SPECIALIST | 6.25% | 640 | 30-40d | Best for VA + THDA (Fort Campbell) | Apply → |
| #4 | Guild Mortgage 📋 DPA EXPERT | 6.55% | 640 | 30-40d | Best for Great Choice Plus DPA | Apply → |
| #5 | Fairway Independent ⭐ TOP RATED | 6.50% | 640 | 25-35d | Highest customer rating 4.7/5 | Apply → |
1. THDA Great Choice Loan — Tennessee's Primary First-Time Buyer Program
The Tennessee Housing Development Agency (THDA) Great Choice loan is the cornerstone of homeownership assistance in Tennessee. It offers a 30-year fixed-rate mortgage at below-market interest rates — typically 0.25% to 0.75% below conventional rates — exclusively for first-time buyers and qualifying repeat buyers in targeted areas.
| Requirement | Standard | With Great Choice Plus |
|---|---|---|
| Minimum Credit Score | 640 | 640 |
| Down Payment Required | 3.5% (FHA) / 3% (Conv.) | Can be $0 with DPA |
| DPA Amount | None | Up to 6% of purchase price |
| DPA Repayment | N/A | Deferred — due at sale/refi |
| Max Purchase Price (Nashville) | $475,000 | $475,000 |
| Homebuyer Education | Required (online OK) | Required (online OK) |
| Loan Types Accepted | FHA, VA, USDA, Conv. | FHA, VA, USDA, Conv. |
💡 Real Example: Nashville buyer, $375,000 home with FHA + Great Choice Plus: DPA = $22,500 (6%). FHA requires $13,125 down (3.5%). Net out of pocket: $0 + closing costs only (~$6,000–$9,000). Total savings vs. standard FHA: $22,500.
2. City-Specific Programs: Nashville, Memphis, Knoxville & Chattanooga
🏙️ Nashville — MDHA BSDI Program
- Amount: Up to $30,000
- Type: Forgivable after 5 years occupancy
- Income Limit: 80% AMI (~$73,000 single)
- Buyer Education: Required (MDHA-approved)
- First-Time Buyer: Required
- Contact: nashville.gov/mdha
🏙️ Memphis — City DAP
- Amount: Up to $10,000
- Type: Soft second mortgage (0%, deferred)
- Income Limit: 80% AMI
- Max Purchase Price: $250,000
- Target Areas: Priority neighborhoods
- Contact: memphistn.gov/housing
🏙️ Knoxville — KCDC DPA
- Amount: Up to $8,000
- Type: Deferred, forgiven after 10 years
- Income Limit: 80% AMI
- Max Purchase Price: $300,000
- Stackable with THDA: Yes
- Contact: kcdc.org
🏙️ Chattanooga — CDFI Program
- Amount: Up to $12,500
- Type: 0% second mortgage
- Income Limit: 120% AMI
- Max Purchase Price: $350,000
- Stackable with THDA: Yes
- Contact: chattanooga.gov/housing
3. THDA Income Limits by County (2026)
| County / Metro | 1–2 Person HH | 3+ Person HH | Max Purchase Price |
|---|---|---|---|
| Davidson (Nashville) | $115,400 | $134,633 | $475,000 |
| Williamson Co. (Franklin) | $115,400 | $134,633 | $475,000 |
| Shelby (Memphis) | $95,800 | $111,767 | $400,000 |
| Knox (Knoxville) | $98,400 | $114,800 | $415,000 |
| Hamilton (Chattanooga) | $93,200 | $108,733 | $375,000 |
| Sullivan (Tri-Cities) | $82,000 | $95,667 | $350,000 |
| Rutherford (Murfreesboro) | $115,400 | $134,633 | $475,000 |
| Rural Counties | $75,000–$85,000 | $87,500–$99,167 | $350,000 |
4. Homeownership for the Brave — Tennessee Veteran Program
THDA's Homeownership for the Brave program gives active military, veterans, and surviving spouses an exclusive rate reduction — typically 0.50% below the standard Great Choice rate. This stacks with VA loan benefits ($0 down, no PMI).
- ✅ Eligible: Active duty, veterans, National Guard/Reserve, surviving spouses
- ✅ Can be combined with VA loan ($0 down + below-market rate)
- ✅ Available with or without Great Choice Plus DPA
- ✅ No purchase price limits for VA loan combination
5. How to Apply for Tennessee First-Time Buyer Programs (Step-by-Step)
Check THDA Income & Purchase Price Limits
Visit thda.org/homebuyers and confirm your household income is below your county limit. Nashville buyers: up to $115,400 (2-person). If above limits, explore conventional loans with private DPA programs.
Take a HUD-Approved Homebuyer Education Course
Required for all THDA programs. Complete online via eHomeAmerica, Framework, or in-person with a THDA-approved counselor (~$99, takes 6–8 hours). Get your completion certificate before applying.
Choose a THDA-Approved Lender
Not all lenders offer THDA loans. Find a THDA-approved lender at thda.org. Ask specifically: "Do you offer Great Choice loans and Great Choice Plus DPA?" Major banks and local credit unions typically participate.
Get Pre-Approved
Provide: 2 years tax returns, 2 months bank statements, 2 months pay stubs, photo ID. The lender will pull your credit (640+ required). Pre-approval letter takes 24–72 hours and is valid 90 days.
Make an Offer & Apply for DPA
Once under contract, your lender applies for Great Choice Plus DPA simultaneously with your first mortgage. DPA is funded at closing — you don't receive cash directly.
Frequently Asked Questions
What are the best first-time home buyer programs in Tennessee in 2026?
The best Tennessee first-time home buyer programs in 2026 are: (1) THDA Great Choice Loan — 30-year fixed rate below market, available statewide. (2) Great Choice Plus — up to 6% of the purchase price in down payment assistance, deferred until sale or refinance. (3) Homeownership for the Brave — exclusive to veterans and active military with below-market rates. (4) Nashville (MDHA) BSDI — city-specific grants for Nashville buyers up to $30,000. (5) Memphis DAP — up to $10,000 for Memphis/Shelby County buyers. Income and purchase price limits apply. Minimum 640 credit score.Check your personalized rate →
What is the income limit for THDA Great Choice in 2026?
THDA Great Choice 2026 income limits vary by county and household size. Examples: Nashville-Davidson County: $115,400 (1-2 person), $134,633 (3+ person). Shelby County (Memphis): $95,800 (1-2 person), $111,767 (3+ person). Knox County (Knoxville): $98,400 (1-2 person), $114,800 (3+ person). Hamilton County (Chattanooga): $93,200 (1-2 person), $108,733 (3+ person). Rural counties typically have lower limits around $75,000–$85,000. Check thda.org for your specific county.Check your personalized rate →
How much down payment assistance can I get in Tennessee?
Tennessee down payment assistance in 2026: THDA Great Choice Plus — up to 6% of purchase price (max $30,000 on a $500K home). This is a deferred second mortgage at 0% interest with no monthly payments, due when you sell, refinance, or pay off your first mortgage. Nashville BSDI — up to $30,000 forgivable grant for Nashville buyers. Memphis DAP — up to $10,000 for Shelby County. Hardest Hit Fund — up to $15,000 for eligible homebuyers in targeted counties. Most programs require 3-year minimum occupancy to avoid repayment.Check your personalized rate →
What is the purchase price limit for THDA loans in Tennessee?
THDA Great Choice 2026 purchase price limits by county: Nashville and surrounding counties (Williamson, Rutherford, Wilson, Sumner, Robertson): $475,000. Shelby County (Memphis): $400,000. Knox County (Knoxville): $415,000. Hamilton County (Chattanooga): $375,000. Most rural counties: $350,000–$375,000. Note: Nashville's hot market means many homes exceed the limit — in that case, consider conventional loans with separate DPA programs or city/non-profit grants.Check your personalized rate →
Can I use THDA programs with FHA loans?
Yes. THDA Great Choice loans are available with FHA (3.5% down), VA (0% down), USDA (0% down), and conventional (3% down with PMI) loan types. The Great Choice Plus down payment assistance can be layered on top of any of these loan types to reduce or eliminate your out-of-pocket down payment. For FHA + Great Choice Plus: THDA covers the 3.5% FHA down payment requirement entirely with just 6% assistance on most home prices. This makes it possible to buy with $0 out of pocket in many Tennessee counties.Check your personalized rate →
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