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Did you know: Was Tennessee the fifth most popular destination for U-Haul customers in 2024? Despite its growing popularity, Tennessee homes are fairly affordable, with the median selling price as of February 2025 at just $380,700, down below the national median.
If you’re the first timer exploring your options in the state, Tennessee Housing Development Agency (THDA) It may help you make your movement more affordable. The agency works with banks, credit unions and mortgage lenders to make homeownership a reality First-time home buyer.
Tennessee’s first home buyer program
THDA Great Choice Home Loan
The Tennessee Housing Development Agency provides first-time home buyers and repeat home buyers who belong to the military or are purchasing in the covered area. You can qualify for a great choice with an FHA, VA, or USDA loan or a traditional loan, but you will need to pay a 22% down payment. These are 30-year fixed-rate loans.
THDA HFA Advantage
If you prefer to use traditional loans but can’t afford to pay a large down payment, you can qualify for the HFA Advantage Program. With THDA support, you can cover your down payment. Although the requirements are very similar to the requirements for selection, it should be noted that income eligibility is calculated based solely on the borrower, not on the home.
THDA Home Ownership for Heroes
THDA’s Home Ownership for Heroes offers the benefits of the Great Choice Program to military or veterans, state and local law enforcement officers, emergency medical technicians (EMT), paramedics, firefighters and even eligible members with a 0.5% mortgage rate discount. Please note that unless you are affiliated with the military, you will need to meet the requirements of your first-time buyer.
Tennessee Down Payment Support and Grants
Thda Great Choice Plus
If you qualify for a good elective loan through THDA, it can be combined with assistance that will help you cover your down payment and closing costs. There are two options.
- Amortization: Up to 5% of the selling price (up to $15,000) is packaged as a 30-year loan at the same rate as your first mortgage.
- Postponed: Up to $6,000 in the form of a profit-free loan that is permitted at the end of the first mortgage term.
If you receive an HFA Advantage loan, you are eligible for a down payment assistance program called HFA Advantage Plus, which has the same structure and advantages as Great Choice Plus.
Housing Fund Down Payment Support
The Housing Fund offers loans of up to $35,000 to help Tennessees cover down payments, prepaid fees and closing costs. All loans have a 5% interest rate and are repaid over 10 or 15 years.
City-specific Home Buyer Support Program
Chattanooga Neighborhood Enterprises
Through Chattanooga Neighborhood Loans, Chattanooga Neighborhood Enterprises offers mortgages that include ITIN loans and multiple down payment assistance programs. One option offers eligible buyers up to $25,000 as a 15-year, 2-second loan with the same interest rate as the first mortgage.
Memphis city
Memphis sponsors a number of home buyer assistance and incentive programs, including home coupon holders, police department members, firefighters, educators and buyers in eligible areas. It also offers a widely available programme for first-time Memphis home buyers. Qualified buyers can receive up to $25,000 (10% of the sale price) for down payment and closing costs in the form of generous deferred pay loans. Depending on the amount of support, if the home remains your primary residence for five or ten years, assistance is permitted.
Other Tennessee First Home Buyer Loans
Tennessees can also take advantage of national programs for first-time home buyers. These include:
- FHA loan: Loans insured by the Federal Housing Administration (FHA) have more generous financial requirements than other loans. If you have a low credit score of 580, you can qualify for an FHA loan with a down payment of 3.5%.
- VA loan: For qualified active duty veterans, veterans and surviving spouses, loans guaranteed by the U.S. Veteran Affairs Agency (VA) are a great option. These loans usually come with low interest rates and do not require a down payment.
- USDA loan: The USDA guaranteed loans also do not require a down payment, but must be purchased in designated rural areas to meet region-specific income requirements.
- Possible Home Ready and Home loans: HomeReady and Home are loan programs created by government-sponsored companies Fannie Mae and Freddie Mac. They are especially for First-time home buyerrequires only 3% and has more flexible income requirements.
Let’s get started
To find out if you are eligible for an affordable mortgage or down payment assistance in Tennessee, first Check your credit score Ensure that the program’s minimum value is met.
Be sure to shop Best Mortgage Lendersand spend time making sure you’re researching Mortgage fees Available.
If you’ve researched your first HomeBuyer Assistance options, read on Buy a house in Tennessee and Tennessee Housing Market. Last but not least, is it important? Set a budget that includes all costs of homeownership, including expenses like Homeowner Insurance.
