The 2026 Tennessee Down Payment Assistance Guide.
Everything a Tennessee buyer needs to understand THDA down payment assistance, in one read. No jargon, no outdated numbers, just how Great Choice Plus works, who qualifies, and how to use it.
The short version
Tennessee down payment assistance runs through THDA, the Tennessee Housing Development Agency. You take a THDA Great Choice first mortgage (FHA, VA, or USDA) and add Great Choice Plus, a second lien for your down payment and closing costs. It comes two ways: a forgivable option (up to $6,000 or $10,000 at 0%, forgiven after 10 years) or an amortizing option (up to 5% of the price, max $15,000, repaid monthly). You need a 640 credit score, a home priced at $500,000 or less, income under your county's limit, and a homebuyer education course.
Step 1: the first mortgage (Great Choice)
Great Choice is a 30-year fixed first mortgage funded through THDA. It's built on an FHA, VA, or USDA/Rural Development loan, so the underlying rules follow those programs, and THDA layers on its own income and price limits. The conventional alternative is Freddie Mac HFA Advantage. If you serve the public, military, first responders, teachers, ask about Homeownership for Heroes, which shaves 0.5% off the rate.
Step 2: the assistance (Great Choice Plus)
Great Choice Plus is where the down payment help comes from. Two structures:
- Forgivable (no payment): up to $6,000 or $10,000 at 0% interest, no monthly payment. It's forgiven at the end of 10 years. Sell or refinance before then and you repay the balance from your proceeds, otherwise it disappears.
- Amortizing (with payment): up to 5% of the sales price, max $15,000, at the same rate as your first mortgage, repaid monthly over 30 years. A bigger amount up front in exchange for a small second payment.
Most buyers who plan to stay put take the forgivable option. The full Great Choice Plus breakdown is here.
Step 3: do you qualify?
The THDA floors are the same statewide: a 640 credit score, a 45% maximum debt-to-income ratio, and a $500,000 purchase-price cap. The one number that changes by county is income, from about $94,900 in rural counties to $162,540 in the Nashville metro for larger households. You'll also complete a homebuyer education course and move in within 60 days. If you owned a home in the last three years, you can still qualify in a THDA targeted county or as a veteran. Check your county's income limit here.
Step 4: how to apply
You apply through a THDA-approved participating lender, that's Cornerstone. We confirm your county limit, pick the forgivable or amortizing option with you, and originate the Great Choice first mortgage and the Great Choice Plus second so they close together. The whole thing starts with a 20-minute call.
One honest note. Down payment assistance is funded by a slightly higher first-mortgage rate. If you already have most of your down payment, a loan without assistance can cost less over time. We'll run both and tell you which actually wins for your numbers.