Down Payment Assistance
Down Payment Assistance in Tennessee (2026)
Tennessee homebuyers can access up to $7,500 in down payment assistance through the Tennessee Housing Development Agency (THDA). On the state's $313,544 median home price, that covers roughly 12% of a standard 20% down payment. Tennessee has 2 state DPA programs total.
Max Assistance
$7,500
Max Great Choice Plus DPA award, per Tennessee Housing Development Agency (THDA)New to this? Quick definitions
- DPA —
- down payment assistance. Money — as a grant or loan — that helps cover the upfront cash you'd otherwise need to buy a home.
- Grant vs. loan —
- a grant is money you never repay. A loan (forgivable, deferred, or repayable) can come with strings attached, even at 0% interest.
- Forgivable loan —
- the balance is wiped out over time if you stay in the home — but it's still a real loan until then, and selling or refinancing early can trigger repayment.
- Deferred loan (silent second) —
- a second loan on your home with no monthly payments, often called a "silent second" because you won't notice it until you sell, refinance, or pay off your first mortgage — that's when it comes due.
- AMI —
- Area Median Income. The midpoint household income for your county, used to set eligibility — programs list limits as a percentage of AMI (e.g. 80% of AMI).
- Income limit —
- the maximum household income you can earn and still qualify, based on where you live and how many people are in your household.
- Purchase price cap —
- the maximum home price a program will help you buy — homes priced above the cap don't qualify, even if your income does.
Do you likely qualify?
The Great Choice Plus DPA requires household income at or below 80% of Area Median Income for your county — many buyers qualify without realizing it, since this is often higher than expected.
Primary Program: Great Choice Plus DPA
maximum assistance
0% interest, no monthly payments. Repaid when you sell, refinance, or pay off the first mortgage — this is sometimes called a "silent second" because you won't notice it until then.
- Administering Agency
- Tennessee Housing Development Agency (THDA)
- Income Limit
- 80% of Area Median Income
- Purchase Price Cap
- $481,176
Additional Tennessee DPA Programs
Hardest Hit Fund (HHF) Targeted Areas
Forgivable Loan$15,000
Forgiven over time if you remain in the home as your primary residence (the home you actually live in, not a rental or second home).
Apply / Learn MoreHow Down Payment Assistance Works
Most state DPA programs are layered on top of a first mortgage — you apply through an approved lender who originates both the primary loan and the DPA second lien at the same closing. The DPA funds reduce the cash you need upfront.
Grants
Free money — no repayment ever. Typically the smallest amounts but highest value.
Forgivable Loans
Balance forgiven after a set period (usually 3–15 years) if you stay in the home. Selling early triggers repayment.
Deferred Loans
No monthly payments. Balance due when you sell, refinance, or pay off your mortgage.
Mistakes first-time buyers make
- Assuming you don't qualify without actually checking the income limit for your county and household size.
- Treating a "forgivable" loan as free money — it can still come due in full if you sell or refinance before the forgiveness term ends.
- Stacking programs incorrectly, or assuming state and local programs combine automatically without confirming with your lender.
- Skipping the required homebuyer education course, which can delay or disqualify your application at closing.
Pro tips
- Talk to a HUD-approved housing counselor first — it's free and they know every program you may qualify for, not just the state's.
- Apply for mortgage pre-approval alongside your DPA program application; most DPA funds are disbursed through an approved lender at the same closing.
- Check local city and county programs in addition to the state program above — many are stackable and cover different costs.
- Ask exactly what triggers repayment on any loan-based assistance before you sign, not after.
Down Payment Calculator
Down Payment Planner
Tennessee median pre-loaded
Your Savings Plan
Timeline
10.5 yrs
saving $500/mo
No PMI at 20% down
20% or more avoids private mortgage insurance entirely.
Estimate only — does not include investment returns on savings.
Full Calculator →What the Assistance Does on a $313,544 Tennessee Home
A worked example at Tennessee's median home price (Zillow Home Value Index, April 2026), using the same payment model as the Tennessee salary page: a 7.03% 30-year fixed rate (Freddie Mac PMMS, week of September 24, 2026), PMI from the National MI rate card on the 10%-down case, the state's effective property-tax rate and homeowners premium, and principal, interest, tax and insurance held to 28% of gross income.
How much of the down payment it covers
A 10% down payment on a $313,544 home is $31,354, and 20% is $62,709. The $7,500 Great Choice Plus DPA maximum covers 24% of the first and 12% of the second, leaving $23,854 of a 10% down payment to come from savings, before any closing costs.
The First Mortgage and Closing Taxes This Assistance Has to Cover in Tennessee
Realty Transfer Tax (part of the Recordation Tax)
Tennessee charges a realty transfer tax of $0.37 per $100 (0.37%) on the greater of consideration or property value. It is collected by the county register of deeds, and the grantee (buyer) is responsible for paying it. (Tenn. Code Ann. § 67-4-409(a)). (Tennessee Department of Revenue, retrieved 2026-09-14) Under that schedule a $313,544 sale owes $1,160, which the statute puts on the buyer.
Indebtedness Tax (Mortgage Tax, part of the Recordation Tax)
Tennessee imposes a state indebtedness (mortgage) tax of $0.115 per $100 of the loan amount above the first $2,000, paid by the debtor when the mortgage or deed of trust is recorded. (Tenn. Code Ann. § 67-4-409(b)). (Tennessee Department of Revenue, retrieved 2026-09-14) On the $250,835 loan that comes with 20% down on this home, that is $288; with 10% down the loan is $282,190 and the tax is $325. It is paid once, at recording, and is not part of the monthly payment above.
Tennessee Housing Development Agency (THDA): Great Choice Home Loan
Great Choice Home Loan is the first-mortgage programme run by Tennessee Housing Development Agency (THDA). (Tennessee Housing Development Agency, retrieved 2026-09-14) Its purchase-price limit is $500,000 (acquisition cost limit, all 95 counties (Great Choice & HFA Advantage, chart dated 08.01.2026)), so a $313,544 home is within it. (Tennessee Housing Development Agency, retrieved 2026-09-14) Income limits: Varies by county, for 1-2 person households: $94,900 (e.g. Benton, Coffee) to $139,320 (Davidson, Williamson, Rutherford and other Nashville-area counties); 3+ persons $109,200 to $162,540. Targeted counties (T) waive the first-time homebuyer requirement.. (Tennessee Housing Development Agency, retrieved 2026-09-14) Down payment help comes through Great Choice Plus: Forgivable option: up to $6,000 or up to $10,000 as a second mortgage forgiven at the end of a 10-year term. Amortizing option: up to 5% of the sales price (maximum $15,000), or up to $25,000 for newly built/proposed construction.. (Tennessee Housing Development Agency, retrieved 2026-09-14) Minimum credit score: 640. (Tennessee Housing Development Agency, retrieved 2026-09-14)
Frequently Asked Questions
What down payment assistance is available in Tennessee?
Tennessee's primary DPA program is the Great Choice Plus DPA, administered by the Tennessee Housing Development Agency (THDA). It provides up to $7,500 as a deferred loan. 0% interest, no monthly payments. Repaid when you sell, refinance, or pay off the first mortgage — this is sometimes called a "silent second" because you won't notice it until then. Additional programs include Hardest Hit Fund (HHF) Targeted Areas.
How much down payment do I need in Tennessee after using DPA?
On a $313,544 home (Tennessee median), a 20% down payment is $62,709. With the Great Choice Plus DPA covering $7,500, your remaining gap would be $55,209. Many buyers combine DPA with a 3–5% conventional or FHA loan to reduce their cash needed further.
Do I have to repay Tennessee down payment assistance?
0% interest, no monthly payments. Repaid when you sell, refinance, or pay off the first mortgage — this is sometimes called a "silent second" because you won't notice it until then.
Can I combine Tennessee DPA with other assistance programs?
Yes — Tennessee's DPA programs can generally be combined ("stacked") with local city and county assistance programs, employer homebuyer benefits, and federal programs. Check with an approved lender or HUD-approved counselor to identify all programs you qualify for.
What are the income limits for Tennessee down payment assistance?
The Great Choice Plus DPA requires income at or below 80% of the Area Median Income (AMI) for your county. AMI limits vary by location and household size. Your lender or the Tennessee Housing Development Agency (THDA) can confirm the exact limit for your area.
Related Calculators
Home Affordability Calculator
See how much home you can afford in Tennessee
PMI Calculator
Estimate private mortgage insurance on lower down payments
Tennessee First-Time Buyer Programs
State mortgage programs with low rates and low down payments
Mortgage Payments by Price
See full PITI costs for 8 home prices in Tennessee, from $200K to $750K
What to do next
Down payment assistance is one piece of the puzzle. Here's where to go depending on where you are in the process.
Not sure if you qualify?
Check the Tennessee Housing Development Agency (THDA) income limits above before ruling yourself out — many buyers qualify without realizing it.
Want the full true cost picture?
DPA covers the down payment, not your ongoing costs. See the true cost of owning a home in Tennessee for the full monthly picture.
Ready to apply?
Most DPA funds are disbursed through an approved lender at closing — get pre-approved and ask specifically about Great Choice Plus DPA when you apply.