Tennessee’s homebuyer assistance ecosystem is anchored by the Tennessee Housing Development Agency (THDA) — a state agency
established in 1973 that has helped hundreds of thousands of
Tennesseans achieve homeownership through affordable loans, down payment assistance, and homebuyer education. THDA’s programs are among the most straightforward in the South, with two well-structured paths: the Great Choice Home Loan and its DPA companion Great Choice Plus, plus the special Homeownership for Heroes track for military and first responders.
The Bookspan Baker Team at Guild Mortgage is an approved THDA lender with deep experience helping Tennessee buyers navigate every available program.
THDA programs are delivered through an approved lender network — including the Bookspan Baker Team — and require completion of a homebuyer education course. Minimum credit score 640 for most programs. Income and purchase price limits apply by county.
Down Payment Assistance programs compress that timeline dramatically. By receiving grant funds to cover some or all of the down payment and closing costs, eligible buyers can purchase a home sooner, stop paying rent sooner, and begin building equity sooner — often without any meaningful trade-off in monthly payment.
THDA’s flagship mortgage product — a 30-year fixed-rate loan primarily insured by FHA or USDA Rural Development, designed for first-time homebuyers with low to moderate incomes.
First-time homebuyers (no home ownership in the past 3 years); veterans and buyers in THDA targeted areas may qualify regardless of prior ownership
FHA, USDA, VA (through Homeownership for Heroes), or conventional (through HFA Advantage)
Competitive fixed 30-year rate set by THDA
FHA requires minimum 3.5%; USDA/VA may require less
Apply and vary by county
640
Required
Buyers who qualify for a Great Choice Home Loan can also apply for Great Choice Plus down payment assistance. Two distinct structures:
Amount: $6,000
Interest Rate: 0%
Monthly Payments: None
Forgiveness: Forgiven at the end of the 30-year loan term
Repayment: If you sell, refinance, or pay off the first mortgage before 30 years, the $6,000 is due in full
Best for: Buyers who want the lowest possible monthly payment and plan to stay in the home long-term
Amount: Up to 5% of the purchase price, maximum $15,000
Interest Rate: Same rate as the first mortgage
Monthly Payments: Paid over 30 years alongside the first mortgage
Best for: Buyers who need more DPA upfront and can absorb a modest second payment
Example: On a $250,000 home, Option 1 provides $6,000 (partially covering FHA’s $8,750 down payment). Option 2 provides $12,500 — more than covering FHA’s full 3.5% down requirement, with remaining funds for closing costs.
Key features:
Available to: First-time AND repeat buyers
Down Payment: 3% minimum
Mortgage Insurance: Reduced PMI rates vs. standard conventional PMI
DPA: Compatible with HFA Advantage Plus using the same $6,000 deferred or up to $15,000 amortizing structure
Income Limits: Apply by county
Minimum Credit Score: 640
THDA’s Homeownership for Heroes adds meaningful benefits for
Tennessee’s essential workers.
Eligible professions:
Active duty military (all branches)
National Guard and Reserve members (including inactive ready reserve)
Veterans
State and local law enforcement officers
Firefighters
Emergency medical technicians (EMTs)
Paramedics
Key features:
Interest Rate Discount: 0.5% below the standard Great Choice interest rate
First-Time Buyer Waiver for Military/Veterans: Active duty military, Guard/Reserve members, and veterans can use this program without meeting the first-time homebuyer requirement, statewide
DPA Compatible: All Great Choice Plus DPA options are available alongside the Heroes rate discount
Military/VA Note: For veterans using a VA Loan, the rate discount applies. VA requires no down payment; DPA can cover closing costs.
For Fort Campbell veterans and Clarksville first responders: VA loan + Homeownership for Heroes rate discount + DPA for closing costs represents one of the most favorable financing packages available to any buyer anywhere in the country.
Memphis — City of Memphis DPA: Up to $25,000 (or 10% of the sale price, whichever is lower) for income-eligible first-time buyers within Memphis city limits. Income at or below 80% AMI, sale price up to $300,000, HUD-certified housing counseling required, minimum 1% buyer contribution.
Clarksville — City of Clarksville DPA: Up to $25,000 in down payment and closing cost assistance for low-income first-time homebuyers within Clarksville city limits. Highly relevant for service members transitioning to civilian homeownership near Fort Campbell.
Nashville — The Housing Fund: Nashville’s primary community
development financial institution, offering DPA programs for
affordable homeownership in the Nashville area. Income limits and purchase price caps apply.
Chattanooga — Chattanooga Neighborhood Enterprise: Up to $15,000 in down payment and closing cost assistance, with an interest rate half a percentage point below the first mortgage.
Provides eligible first-time buyers with a federal income tax credit on a portion of annual mortgage interest paid — reducing federal income taxes owed dollar for dollar, each year for the life of the loan. Given that Tennessee already has no state income tax, the MCC’s federal tax credit benefit is particularly clean and unencumbered for Tennessee buyers.
$6,000 at 0% interest with no monthly payments, forgiven at the end of the 30-year loan term. If you sell, refinance, or pay off the first mortgage before 30 years, the $6,000 is due in full.
Up to 5% of the purchase price (maximum $15,000) as a second loan with monthly payments over 30 years at the same interest rate as the first mortgage.
Yes. THDA’s Homeownership for Heroes waives the first-time buyer requirement statewide for active duty military, Guard/Reserve members, and veterans.
Yes. The City of Clarksville offers up to $25,000 for low-income first-time buyers. THDA’s statewide programs are also available in Montgomery County.
Income limits vary by county and household size. Your Bookspan Baker loan officer will confirm the current limit for your specific county.
