Forgivable, no payment
THDA's Great Choice Plus "no-payment" second, up to $6,000 or $10,000 at 0%. No monthly payment, and it's forgiven at the end of 10 years. Repaid only if you sell or refinance early.
Tennessee Down Payment Assistance Programs
Down payment assistance in Tennessee. THDA can cover your down payment so you don't wait years to save.
Tennessee's help runs through one agency: THDA, the Tennessee Housing Development Agency. Take a THDA Great Choice home loan and you can add Great Choice Plus, a second lien that puts up to $10,000 toward your down payment and closing costs, with no monthly payment and forgiveness after 10 years. There's also a larger amortizing option worth up to 5% of the price. Which one fits depends on your county, your income, and how long you'll stay in the home. We'll help you find it.
$15KMax THDA assistance (5% option)
640Minimum credit score
$500KStatewide purchase-price cap
Licensed in Tennessee · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender
What down payment assistance is available in Tennessee?
Tennessee down payment assistance is delivered through THDA's Great Choice Plus program. Unlike states with a dozen competing city and county grants, Tennessee centers on one well-run agency, which makes it simpler: you qualify for a THDA Great Choice first mortgage, then add Great Choice Plus as a second lien for your down payment and closing costs. It comes in two shapes, a 0% forgivable option up to $10,000, or a larger amortizing option up to 5% of the price. Both cap the purchase price at $500,000 and require a 640 credit score.
What is down payment assistance, in plain English?
Down payment assistance (DPA) is a second loan that covers your down payment, your closing costs, or both, delivered here through THDA and originated by a participating lender (us). It sits behind your main mortgage as a second lien.
Amortizing, with payment
The larger option, up to 5% of the sales price, max $15,000. You repay it monthly over 30 years at the same rate as your first mortgage. More money up front, a small second payment.
Your first mortgage
Great Choice Plus attaches to a THDA Great Choice first mortgage. FHA, VA, or USDA/Rural Development. The conventional path uses Freddie Mac HFA Advantage instead.
The honest tradeoff. DPA programs are funded by a slightly higher rate on the first mortgage, that premium is what pays for the assistance. If you already have most of your down payment saved, a loan without DPA can cost less over time. We'll tell you when down payment assistance isn't the right move for your numbers. See how the two options really compare →
Programs at a glance
THDA programs in Tennessee
THDA runs one first-mortgage family with a matching down payment assistance second. Here's what Cornerstone originates across the state.
| Program | What it is | Loan types |
|---|---|---|
| Great Choice | The THDA first mortgage (Mortgage Revenue Bond) | FHA, VA, USDA/RD |
| Great Choice Plus | Down payment/closing-cost second, $6k or $10k forgivable, or up to 5% (max $15k) amortizing | Pairs with Great Choice |
| Homeownership for Heroes | Great Choice with a 0.5% rate reduction for military, first responders, and K-12 teachers | FHA, VA, USDA/RD |
| Homeownership for Heroes Plus | The DPA second for Heroes buyers | Conventional |
| Freddie Mac HFA Advantage | The conventional first-mortgage path (up to 105% CLTV with the Plus second) | Conventional |
Program terms are set by THDA and change periodically. Your eligibility depends on credit, income, county, and loan type. THDA interest rates are posted on the THDA website; we don't quote rates here.
Great Choice Plus, the two DPA options
| Option | Amount | Rate | Term & repayment |
|---|---|---|---|
| No-payment (forgivable) | Up to $6,000 or $10,000 | 0% | 10-year term, no monthly payment; forgiven at year 10 (due in full only if sold/refinanced before then) |
| Amortizing (with payment) | Up to 5% of price, max $15,000 | Same as first mortgage | 30-year amortizing, monthly payment; not forgiven |
Most Tennessee buyers who plan to stay put pick the forgivable option, you keep the home 10 years and the assistance costs you nothing. The 5% amortizing option makes sense when you need the larger amount up front and can carry a small second payment. We walk through the real math on the Great Choice Plus page.
Who qualifies
Who qualifies for THDA down payment assistance in Tennessee?
THDA sets clear floors: a 640 credit score, a 45% maximum debt-to-income ratio, a purchase price of $500,000 or less, and household income under your county's limit. You'll also complete a homebuyer education course and occupy the home within 60 days of closing. Eligible properties include single-family 1–4 unit homes (one unit owner-occupied), condos, PUDs, townhomes, and HUD-approved manufactured homes.
Income limits by Tennessee county
THDA income limits run by county and household size and are effective August 1, 2026. Rural counties sit near $94,900 for 1–2 people; the Nashville metro. Davidson, Williamson, Sumner, Wilson, Rutherford, Cheatham, Dickson, and Robertson, runs up to $139,320 for 1–2 people and $162,540 for households of three or more. Middle-tier metros like Knoxville (Knox), Chattanooga (Hamilton), and Memphis (Shelby) land in between. See the full county income table and check yours →
Do you have to be a first-time buyer?
Not necessarily. THDA's Great Choice programs use a 36-month rule, you can't have owned a primary residence in the last three years. But that rule is waived in THDA targeted counties (many Tennessee counties are fully or partially targeted) and for qualifying veterans under the Veteran Exemption. If you owned before, don't assume you're out; a lot of repeat buyers still qualify depending on where they're buying.
Tennessee metros we serve
We originate THDA loans statewide, the biggest buyer markets are Nashville (Davidson & the surrounding metro counties), Memphis (Shelby), Knoxville (Knox), Chattanooga (Hamilton), and Clarksville (Montgomery). Income limits and targeted-area status vary by county, so the right THDA setup in Nashville can look different from the one in a rural West Tennessee county. That's the part we sort out on the call.
Why work with us
A THDA-approved lender, not a referral site.
Cornerstone First Mortgage originates your THDA Great Choice first mortgage directly. We're an approved participating lender for the THDA programs on this site, this isn't a directory we curate from the outside. When you have a question about how Great Choice Plus actually works at the underwriting desk, we're the people answering it.
- THDA-approved participating lender.
- In-house underwriting on the first mortgage.
- Honest tradeoff explanations, we'll tell you when DPA isn't the right call.
- Equal Housing Lender.
I figured I needed 20% down and was years out. Mike ran the THDA numbers and we closed on a place near Knoxville with the forgivable assistance covering most of what I owed at the table, a few hundred dollars of my own money instead of tens of thousands.
D.H.. Knox County, TN · First-time buyer
FAQ
Tennessee DPA questions, answered straight
How do I get down payment assistance in Tennessee?
Tennessee down payment assistance comes through THDA. You take a THDA Great Choice first mortgage and pair it with Great Choice Plus, a second lien toward your down payment and closing costs. You apply through a THDA-approved participating lender, need a 640 credit score, a purchase price of $500,000 or less, income under your county limit, and a homebuyer education course. We handle the application and match the right option to your numbers.
Do you have to pay back THDA down payment assistance?
Usually no. The Great Choice Plus no-payment option (up to $6,000 or $10,000 at 0%) is forgiven at the end of a 10-year term, you only repay it if you sell or refinance before year 10. There's also an amortizing option worth up to 5% of the sales price (max $15,000) that you repay monthly at the same rate as your first mortgage; that one is not forgiven.
Is the $10,000 THDA down payment assistance forgivable?
Yes. Both the $6,000 and the $10,000 Great Choice Plus no-payment options are forgiven at the end of the 10-year term at 0% interest, with no monthly payment. The balance only becomes due if you sell or refinance before the 10 years are up. Some older summaries call it simply repayable, the current THDA program forgives it at year 10.
How much down payment assistance can I get in Tennessee?
THDA Great Choice Plus offers two structures. The no-payment forgivable option is up to $6,000 or up to $10,000 at 0%, forgiven after 10 years. The amortizing option is up to 5% of the sales price with a maximum of $15,000, repaid monthly at the same rate as your first mortgage. You pick one, and it must pair with a THDA Great Choice first mortgage.
What credit score do I need for THDA in Tennessee?
THDA's Great Choice, Great Choice Plus, and Homeownership for Heroes programs require a minimum 640 credit score and a maximum 45% debt-to-income ratio. The Freddie Mac HFA Advantage path follows Freddie Mac credit guidelines instead. FHA on its own allows 580, but THDA assistance sets the 640 floor.
What are the income limits for THDA down payment assistance?
THDA income limits vary by county and household size, from about $94,900 in rural counties up to $139,320 for 1–2 people or $162,540 for three or more in the Nashville metro (Davidson, Williamson, Sumner, Wilson, Rutherford and neighbors). The purchase price cap is $500,000 statewide. These figures are effective August 1, 2026 and change annually.
Do I have to be a first-time homebuyer in Tennessee?
Not always. THDA's Great Choice programs use a first-time buyer rule, no ownership interest in a primary residence within the last 36 months, but that rule is waived in THDA targeted counties and for qualifying veterans under the Veteran Exemption. Many Tennessee counties are fully or partially targeted, so a large share of repeat buyers still qualify.
What is THDA Homeownership for Heroes?
Homeownership for Heroes applies a 0.5% (50 basis point) interest-rate reduction to the Great Choice loan for qualifying members of the military, National Guard, veterans and eligible spouses, state and local law enforcement, EMTs and paramedics, firefighters, and K-12 teachers. It pairs with the same Great Choice Plus down payment assistance options.
Does THDA down payment assistance work with FHA, VA, or USDA loans?
Yes. The THDA Great Choice first mortgage and its Great Choice Plus assistance are available on FHA, VA, and USDA/Rural Development loans. The Freddie Mac HFA Advantage path is conventional. FHA is the most common pairing because its 3.5% down is small enough for the assistance to cover most or all of it.
Do I need a homebuyer education course for THDA?
Yes. THDA requires homebuyer education for its Great Choice and down payment assistance programs. The course is typically online, takes a few hours, and we point you to the specific THDA-approved course that satisfies your program so you complete it once and it counts.
Not ready to talk yet?
Ready to find out which THDA option fits?
20 minutes on the phone. We'll check your county's limits, run the forgivable and amortizing options against your real numbers, and tell you the best path.