Tennessee's main first-time homebuyer resource is the Tennessee Housing Development Agency (THDA), which offers the Great Choice Home Loan program paired with down payment assistance, plus a Mortgage Credit Certificate for eligible buyers. Those programs work alongside standard low-down-payment options like FHA (3.5% down), VA (0% down for eligible veterans), and conventional loans (as low as 3% down).
Tennessee doesn't leave first-time buyers to figure out financing entirely on their own — the state runs one of the more useful state housing agency programs in the country through THDA, and it's specifically designed to work alongside, not instead of, standard mortgage programs.
THDA Great Choice Home Loan is the agency's flagship first-time buyer product: a 30-year fixed-rate mortgage with income and purchase price limits by county, available to first-time buyers and repeat buyers in certain targeted areas. Full eligibility rules and current program details are on THDA's Great Choice Home Loan page.
THDA Great Choice Plus (down payment assistance) pairs with the Great Choice loan to help cover your down payment and closing costs, either as a deferred loan forgiven over time or a low-interest amortizing second mortgage. See THDA's down payment assistance page for current loan amounts.
Mortgage Credit Certificate (MCC): for eligible buyers, THDA also offers an MCC, which lets you claim a federal tax credit on a portion of the mortgage interest you pay each year — a direct dollar-for-dollar reduction in your federal tax bill, not just a deduction.
Tennessee's mortgage industry is regulated by the Tennessee Department of Financial Institutions (TDFI), which licenses mortgage brokers, lenders, and loan originators operating in the state — including Heathrow Mortgage and myself. You can see TDFI's oversight of mortgage lending and licensing at their Mortgage, Consumer Lending & Money Transmission page.
How these stack with federal programs: a THDA loan is typically originated as an FHA, VA, USDA, or conventional loan underneath the THDA wrapper — it's not a separate loan type on its own. That means the federal program's underwriting rules still apply, but the THDA layer adds income limits, a purchase price cap, and (often) a homebuyer education course requirement in exchange for the down payment help.
A real Williamson County example: a first-time buyer purchasing a $310,000 home who qualifies for THDA Great Choice paired with an FHA loan and Great Choice Plus assistance could realistically bring closing-table cash down to just a few thousand dollars — a completely different starting point than saving 10–20% on their own. I help buyers figure out early whether they fall under THDA's income and purchase-price limits for their specific county, since that determines the whole financing strategy from the start.
