# Buying Your First Home in Tennessee: A Simple THDA Guide By Autumn Lane (@autumnlane) · Published 2026-10-12 Canonical: https://voce.com/@autumnlane/tennessee-buying-first-home-simple-thda-guide-ekkvwi --- If you're ready to buy your first home in Tennessee, the biggest hurdle might not be the monthly payment — it might be the money you need upfront. Tennessee Housing Development Agency (THDA), the state's housing agency, exists to close that gap. The Great Choice loan pairs a 30-year fixed-rate mortgage with up to **$15,000 in down payment assistance**, and, in most cases, you can borrow enough to make a full 100% of your purchase — all through local approved lenders like Fairway Home Mortgage. Here's how it works, in plain English. I'm Autumn Lane, a Mortgage Advisor and Branch Manager at Fairway Home Mortgage in Knoxville. I've walked dozens of Tennessee buyers through their first purchase, and I can tell you the same thing every time: government-backed programs like THDA sound intimidating, but they're built for regular people — and they're often the difference between renting and owning. #### Key Takeaways - THDA's Great Choice loan is a 30-year fixed-rate mortgage for low-to-moderate-income Tennessee buyers - Great Choice Plus down payment assistance can cover up to $15,000 of your upfront costs - Heroes, veterans, teachers, and first responders can qualify for a reduced interest rate with THDA - You don't have to be a first time buyer to qualify for all THDA programs - You must use a THDA-approved lender, like Fairway Home Mortgage - Housing Education is required ## What exactly is THDA, and what does it do? THDA stands for the **Tennessee Housing Development Agency**. THDA is a state government agency available for Tennesseans of moderate income, helping to educate home buyers on the buying process, and offering assistance to homebuyers to help get into homeownership for little to no cost. It doesn't lend you money directly. Instead, it works through a network of approved lenders across the state — including Fairway Home Mortgage — who originate the loans under THDA's guidelines. This means your application, your credit check, and your closing all happen with your local lender. THDA's job is to make that loan more affordable by wrapping it in a state program that adds below-market, fixed interest rates along with the assistance. ## How much down payment help can you actually get? The star of the THDA lineup is called **Great Choice Plus**, and it's the part that puts real cash in your corner. Down payment assistance (DPA) is money applied toward your down payment and closing costs so you don't have to hand over a huge chunk of savings on day one. Great Choice Plus offers a few different assistance options as follows: - **Deferred option:** up to **$6,000** toward your down payment and closing costs. This is a second loan at **0% interest** with **no monthly payments**. After the term ends, the remaining balance is forgiven — if you stay in the home, you may never pay it back. - **Amortizing option:** up to **5% of the purchase price**, capped at **$15,000**. This one carries a small monthly payment alongside your mortgage, so it's best for buyers who need more cash to get in the door and can handle the extra monthly cost. - **New construction option:** up to **$25,000** at **0% interest** for qualifying newly built homes. ## Do you actually qualify? The honest checklist The good news: qualifying for a THDA Great Choice loan is more within reach than what you might expect. Here are the boxes we need to check ([THDA Great Choice 2026 guide](https://jonsmithrealtor.com/thda-great-choice-loan-program-2026-guide)): - **Credit score:** at least **640** for every borrower on the loan. That's a touch above the 580 minimum for a standard FHA loan, but THDA's below-market rates and down payment help make up for it. - **Income:** your total household income must fall under the limit for your county. **Visit** [THDA.ORG](http://THDA.ORG) to look up your county. - **Purchase price:** the home can't cost more than your county's acquisition limit — **Visit** [**THDA.ORG**](http://THDA.ORG) to search acquisition costs for your county - **First-time buyer:** you must not have owned a primary residence in the past three years — Some eligible counties and census tracts across the state, along with the Homeownership for Heroes program, eliminate the first time buyer requirement. - **Occupancy:** the home must be where you live, not an investment or vacation property. - **Education:** you complete a short homebuyer education course before closing, which covers budgeting and the real costs of owning a home. ## Community Heroes make the sacrifice and get more benefits THDA offers a unique, special program for people who serve their communities known as **Homeownership for Heroes** (formerly called Homeownership for the Brave). This program is available to active-duty military, veterans, National Guard members, firefighters, EMTs, law enforcement officers, and full-time K-12 teachers in Tennessee schools. Qualifying heroes get two perks on top of the standard program: a **reduced interest rate** — roughly **half a percentage point** below the Great Choice rate — and the first time buyer guideline is **waived**. The same 640 credit score, income limits, and education requirements will still apply. ## Why not just get a regular FHA loan instead? It's a fair question: if THDA loans are backed by FHA, VA, or USDA anyway, why add the extra step? Here are some benefits: - **A better rate.** THDA finances its loan pool with tax-exempt bonds, which lets it offer rates at or below standard market FHA rates. Even a quarter-point difference on a $250,000 loan saves roughly **$40 a month**, or about **$14,400 over 30 years**. - **Down payment help attached.** A standard FHA lender doesn't come with $6,000–$15,000 in down payment assistance built in. That's THDA's unique advantage — especially for buyers with solid income and credit who simply haven't had time to save a big lump sum. - **Built-in preparation.** The required homebuyer education course means you walk into closing actually understanding your mortgage. THDA's default rates are historically lower than standard FHA — the preparation works. The (small) tradeoff might be process time: THDA adds a layer between you and closing, so your lender submits the loan to the agency for review. Buyers who start the process early, complete their education, submit lender docs as soon as possible, rarely have to wait longer to closer on a THDA loan. It is important to work with a lender who is familiar with the THDA processes, guidelines, and timelines, to provide a seamless experience from start to finish. ![Home keys held in hand, symbolizing first-time homeownership](https://convex.voce.com/api/storage/a7ad9043-b042-481a-8cd5-ae44035fd1e4) ## The practical steps to get started today Buying with THDA follows a clear path. Here's the order of operations ([THDA Great Choice 2026 guide](https://jonsmithrealtor.com/thda-great-choice-loan-program-2026-guide)): 1. **Check your eligibility** — confirm your credit score clears 640, your household income fits your county's limits, and you meet the first-time-buyer rule (or qualify for a Heroes exception). 2. **Work with a THDA-approved lender** — not every lender participates, so ask upfront. Fairway Home Mortgage is approved to originate THDA loans and can guide you through. 3. **Complete homebuyer education** — it's required before closing and can be done online in a few hours. Doing it early keeps your timeline smooth. 4. **Get pre-approved** — your lender runs your full application and issues a pre-approval letter that tells sellers you're a serious, funded buyer. 5. **Find your home and make an offer** — with your financing locked, you can shop with confidence. 6. **Close** — your lender finalizes everything, and THDA's assistance is applied at the closing table. ?Frequently Asked Questions6 questions 1What credit score do I need for a THDA loan? You'll need a credit score of at least 640 for everyone on the loan, household income within your county's limits, and a home priced under the acquisition cap A THDA-approved lender like Autumn Lane and Fairway Home Mortgage can confirm your exact numbers. 2Do I need a big down payment saved up? Not necessarily. Down payment assistance (DPA) is money THDA applies toward your down payment and closing costs. The deferred option can reduce what you owe to just a few thousand dollars, and heroes or USDA-eligible buyers may be able to finance up to 100% of the purchase price. 3Do I apply to THDA directly? THDA is a state agency, not a lender. You apply through a THDA-approved mortgage company, like Fairway Home Mortgage, which originates the loan under THDA's guidelines. Your lender handles the application, credit check, and closing for you. 4Can I use THDA if I've owned a home before? Yes, with a caveat. The first-time-buyer rule requires that you not have owned a primary residence in the past three years. In some THDA-designated areas that rule is waived for repeat buyers, and heroes, veterans, teachers, and first responders can skip it entirely. 5Can I use a THDA loan to purchase a manufactured home? Yes, THDA allows for the purchase of a double wide manufactured home on a permanent foundation. 6Which THDA Great Choice Down Payment assistance repayment option is best for me? This will depend on your needs and goals. You can speak with Fairway Home Mortgage to discuss the features of each option and you can work together to pick the right one for you! #### Ready to start your home search? Ready to see whether a THDA loan fits your situation? Autumn Lane and Fairway Home Mortgage in Knoxville can walk you through your options and get you pre-approved. Reach out to start the conversation today. [Talk to Fairway Home Mortgage](/@autumnlane)