THDA Loan Guide: Great Choice and Down Payment Help for Middle Tennessee Buyers

If you're buying your first home in Middle Tennessee, a THDA loan is one of the first things I bring up. The Tennessee Housing Development Agency runs the Great Choice Home Loan, a 30-year fixed-rate mortgage, and pairs it with down payment assistance that can cover a real chunk of your cash to close.

I've walked a lot of buyers through this program in my 15 years in real estate. Here's how it works in plain English, with every number linked back to THDA's own pages as I read them in November 2026.

What Is a THDA Loan?

THDA is Tennessee's state housing finance agency. Its Great Choice Home Loan page (viewed November 2026) describes the program as built to make homeownership "available and affordable" for Tennesseans of moderate income.

The basics, per that THDA page:

• 30-year term with a fixed interest rate that never changes over the life of the loan.
• Credit score of at least 640 for everyone on the loan application.
• Most loans are insured by FHA or USDA-RD, so you may borrow up to 96.5% of the purchase price (a 3.5% minimum down payment), and down payment assistance can help cover that.
• Off-site (manufactured) homes are eligible.

THDA doesn't lend to you directly. You apply through a THDA-approved lender, which I'll cover below.

Great Choice Plus: THDA Loan Down Payment Assistance

Great Choice Plus is the down payment assistance that rides along with a Great Choice Home Loan. According to THDA's Down Payment Assistance page (viewed November 2026), it can be used for your down payment, your closing costs, or both. You must qualify for the Great Choice first mortgage to get it.

There are two versions:

Source: THDA Down Payment Assistance and Advantages of Great Choice Home Loans, both viewed November 2026. THDA does not list an effective date on these pages.

The deferred option keeps your monthly payment lower. The amortizing option gives you more cash up front but adds a second payment. Which one makes sense depends on your budget and how long you plan to stay, so I always have buyers run both with their lender.

One caution THDA spells out: you have to follow the terms of both loans. Violations can trigger penalties, including immediate repayment.

Homeownership for the Brave Is Now Homeownership for Heroes

If you've heard of Homeownership for the Brave, here's the update. A 2024 THDA submission to the National Council of State Housing Agencies explains that Homeownership for the Brave started as a 2011 pilot for military members, veterans and their spouses, and was renamed and expanded as Homeownership for Heroes on March 1, 2023.

THDA's Homeownership for Heroes page (viewed November 2026) lists these benefits:

• An interest rate reduced by half a percentage point (0.5%) on the Great Choice loan.
• Eligibility for active duty military, National Guard and veterans; state and local law enforcement officers; EMTs and paramedics; and firefighters.
• The option to add Great Choice Plus down payment assistance.
• Qualified military members and veterans can skip the first-time homebuyer requirement anywhere in Tennessee.

On May 5, 2026, THDA announced that full-time classroom teachers are now eligible too. THDA estimated the discount saves buyers about $125 a month.

For veterans, THDA's advantages page notes you'll need a DD-214 showing honorable discharge, or a DD-4 re-enlistment form.

THDA Loan Eligibility Requirements

First-Time Homebuyer Rules

The Great Choice loan is aimed at first-time buyers. THDA's Repeat Homebuyers page (viewed November 2026) says you can still qualify if any of these apply:

• You have not lived in a home you own for at least three years.
• You're buying in one of THDA's 43 targeted counties, or in designated areas within 15 more counties.
• You're a qualified military member and/or spouse.

None of the nine counties I serve is fully targeted. But THDA's targeted areas list (page last updated October 2025) does include specific census tracts in Davidson, Rutherford, Maury and Robertson counties. Williamson, Sumner, Wilson, Cheatham and Dickson have no listed tracts. If you've owned before, ask me or your lender to check the exact address.

Credit Score Minimum

Everyone on the application needs a credit score of at least 640, per THDA's FAQ (viewed November 2026). If you're short, THDA says a THDA-approved counselor can help you work on it.

Income and Purchase Price Limits by County

THDA caps both household income and the home's purchase price, and both "vary from county to county," according to its FAQ. THDA's Lender Notice 2025-14 raised the income limits effective June 2, 2025.

I tried to pull the current numbers for Davidson, Williamson, Rutherford, Sumner, Wilson, Maury, Robertson, Cheatham and Dickson counties, but I couldn't open THDA's limits chart to confirm them. Rather than guess, I'll point you to the source: THDA's official Acquisition Cost and Income Limits chart. Check it, or have your lender confirm, before you start shopping.

Homebuyer Education Requirement

THDA "requires homebuyer education for all THDA mortgage loan applicants," per its FAQ (viewed November 2026). Here's what THDA says about the class:

• THDA-approved counselors teach it.
• Class fees vary by agency and don't exceed $99.
• There's also a self-paced online course.
• Your certificate is good for one year.

Honestly, I'd recommend the class even if it weren't required. It covers budgeting, choosing a home, qualifying for a loan and home maintenance. Buyers who take it ask better questions.

How a THDA Loan Pairs With FHA, VA, USDA and Conventional

The Great Choice program isn't a separate kind of mortgage. It sits on top of a standard loan type. THDA's advantages page mentions FHA, VA, RD (USDA Rural Development) and conventional loans.

• FHA: Up to 96.5% financing, per THDA's Homeownership for Heroes flyer (October 2025). Great Choice Plus can help cover the 3.5% down payment.
• VA: Up to 100% financing, per the same flyer. Down payment help can still go toward closing costs.
• USDA-RD: Also up to 100% financing, per the flyer, in USDA-eligible areas. Your lender can check whether a specific address qualifies.
• Conventional: Listed by THDA as an option. Ask your lender how its terms compare with FHA for your credit and down payment.

Your lender will help you decide which base loan fits. My job is to make sure the house and the contract timeline work with whichever one you choose.

How to Apply for a THDA Loan in Middle Tennessee

1. Find a THDA-approved lender. Use THDA's Find a Lender tool. Not every bank or mortgage company offers Great Choice.
2. Get pre-approved. The lender checks your credit, income and the county limits.
3. Take homebuyer education. Pick a class through THDA's class guide.
4. Work with a REALTOR® who knows THDA. THDA lists trained agents on its Find a REALTOR® page.
5. Shop within your price limit. Make sure each home you consider fits under your county's acquisition cost limit.
6. Write the offer and close. Leave enough time in the contract for the lender to process both the first mortgage and Great Choice Plus.

Getting the lender and the education class lined up early makes the whole process smoother.

THDA Loan Frequently Asked Questions

How much down payment assistance does a THDA loan offer?

Great Choice Plus offers a deferred, 0% forgivable second mortgage of up to $6,000 or up to $10,000, forgiven after 10 years, or an amortizing 30-year second mortgage of up to 5% of the sales price with a $15,000 maximum, per THDA's Down Payment Assistance page as of November 2026.

What credit score do I need for a THDA loan?

THDA requires a credit score of at least 640 for everyone on the loan application.

Do I have to be a first-time buyer?

Generally yes, but THDA allows buyers who haven't lived in a home they own for at least three years, buyers in targeted areas, and qualified military members and veterans.

Is homebuyer education required?

Yes. THDA requires homebuyer education for all THDA mortgage applicants. Class fees don't exceed $99, and the certificate is good for one year.

What happened to Homeownership for the Brave?

It was renamed and expanded as Homeownership for Heroes in March 2023. It offers a 0.5% interest rate reduction for military members, veterans, law enforcement, firefighters, EMTs and paramedics, and, as of May 2026, full-time classroom teachers.

Let's Talk About Your THDA Loan Options

Whether you're looking in Davidson, Williamson, Rutherford, Sumner, Wilson, Maury, Robertson, Cheatham or Dickson County, I'm happy to connect you with THDA-approved lenders and help you find a home that fits the program.

Call or text me at 615-981-6272, email JasonLee@simplihom.com, or browse homes at tournashvillehomes.com.