First-Time Home Buyer Programs in Tennessee
Buying your first home in Tennessee? The Tennessee Housing Development Agency runs the state's flagship program — THDA Great Choice Home Loan — and it stacks with federal loans and local DPA. Here's the full picture, plus how to qualify.
THDA Great Choice Home Loan
Below-market first mortgage from THDA paired with down payment and closing-cost assistance, plus an optional MCC tax credit. Available to qualified Tennessee first-time buyers meeting income and purchase-price caps.
How first-time homebuyer programs work in Tennessee
"First-time buyer" in Tennessee usually means you haven't owned a principal residence in the past three years — a wider net than most people expect. THDA programs typically pair a competitive first mortgage with down payment and closing-cost assistance, often as a forgivable second lien or grant, plus an optional Mortgage Credit Certificate (MCC) that converts a portion of mortgage interest into a federal tax credit for the life of the loan.
Eligibility hinges on three inputs: your credit score (typically 620–640 for conventional, 580 for FHA), your household income relative to program caps that vary by county in Tennessee, and the purchase price of the home. Completing a HUD-approved homebuyer education course is required before closing on most THDA products.
The best part: Tennessee first-time buyer programs stack with FHA, VA, USDA, and conventional first mortgages, so an FHA borrower with a 620 score can still access THDA DPA. And city or county programs in Tennessee often layer on top for even larger totals — see the Grant Finder for your ZIP-specific total.
How to qualify: Tennessee first-time buyer steps
- 1
Check your credit for TN program eligibility
Most Tennessee first-time buyer programs require a minimum credit score (typically 620–640 for conventional, 580 for FHA). Pull your score for free with a soft inquiry so you know where you stand before applying.
- 2
Confirm Tennessee first-time buyer status
THDA defines "first-time buyer" as someone who hasn't owned a principal residence in the past three years. Some Tennessee targeted areas waive this rule.
- 3
Take a TN approved homebuyer education course
THDA requires a HUD-approved homebuyer education course before closing on most first-time programs. Most run 6–8 hours and can be completed online.
- 4
Apply through a THDA-approved lender
THDA Great Choice Home Loan is originated by participating TN lenders, not by the HFA directly. Your loan officer submits the DPA package alongside your main mortgage application.
- 5
Close on your Tennessee home
First mortgage funds and DPA come to closing together. Keep documentation of the assistance terms — some Tennessee DPA is forgivable after a residency period.
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Start my TN readiness checkTennessee first-time buyer programs: FAQ
What is the flagship first-time buyer program in Tennessee?▾
THDA Great Choice Home Loan is the headline first-time homebuyer product from the Tennessee Housing Development Agency (THDA). Below-market first mortgage from THDA paired with down payment and closing-cost assistance, plus an optional MCC tax credit. Available to qualified Tennessee first-time buyers meeting income and purchase-price caps.
What credit score do I need for Tennessee first-time buyer programs?▾
Most Tennessee first-time buyer programs require a minimum credit score of typically 620–640 for conventional, 580 for FHA. Higher scores unlock better interest rates and more DPA options. If your score is below the floor, use HomeApproach's Credit Readiness tool to see the fastest path to qualifying.
Do Tennessee first-time buyer programs work with FHA or VA loans?▾
Yes. THDA Great Choice Home Loan and most THDA products layer on top of FHA, VA, USDA, and conventional first mortgages. Your lender submits the DPA application alongside your first mortgage — no separate credit pull required.
Can I stack Tennessee first-time buyer programs with local city or county DPA?▾
In most cases, yes. Tennessee buyers regularly combine THDA state assistance with city or county DPA and federal loans. Home Approach's Grant Finder waterfalls through all four layers by ZIP to show your specific total.
Do I have to be a Tennessee resident to qualify?▾
THDA Great Choice Home Loan requires the home you're buying to be in Tennessee and to become your primary residence. You do not typically need to be a current Tennessee resident to apply, but check program-specific residency rules.