TENNESSEE Down Payment Assistance in 2026: What Actually Qualifies You
Last reviewed: September 2026
Tennessee homebuyers don’t necessarily need a 20% down payment. The Tennessee Housing Development Agency (THDA) runs the primary statewide assistance through its Great Choice loan program, with additional Memphis and Nashville-area local programs.
What Down Payment Assistance Programs Are Available in Tennessee in 2026?
Great Choice Plus provides a second mortgage of either $6,000 (deferred, 0% interest) or up to 5% of the sales price (capped at $15,000, amortizing). THDA also offers an HHF-DPA option providing $15,000 in targeted ZIP codes, layered on top of Great Choice.
Can FHA Be Combined With Tennessee DPA?
Yes — Great Choice Plus pairs with FHA, VA, USDA, and conventional first mortgages through THDA-approved lenders.
Are There Local Tennessee Down Payment Assistance Programs?
Yes:
• Nashville Industry Fund (NIF) — grant, up to $6,000
• The Housing Fund (Nashville area) — FHA, VA, conventional
• Shelby County DPA (Memphis area) — repayable second lien, max $6,000
• City of Memphis — conventional and FHA
FHA, Conventional, VA, USDA, or DPA — How Do They Compare?
Option | Typical Down Payment | Best Starting Fit | Key Tradeoff |
FHA | 3.5% | Limited savings or flexible credit needs | Upfront and annual mortgage insurance |
Conventional | As low as 3% for qualifying buyers | Stronger credit, lower long-term PMI | More credit-sensitive qualification |
VA | Often 0% | Eligible veterans, service members, spouses | Entitlement and COE required |
USDA | Often 0% | Eligible rural/suburban Tennessee properties | Property location and income limits |
FHA/Conventional + THDA or local DPA | Reduced by assistance amount | Buyers short on cash who qualify for the loan | Deferred vs. amortizing structure changes real cost |
Can Repeat Buyers Get Down Payment Assistance in Tennessee?
Generally Great Choice requires first-time-buyer status (3-year rule), with carve-outs for veterans and targeted-area purchases. It’s not a broad repeat-buyer program — check eligibility carefully if you’ve owned before.
What Cash Might You Still Need at Closing?
Especially in an HHF-eligible ZIP code, assistance can cover most of the down payment — but earnest money, inspection, and appraisal costs still typically apply.
Who Specializes in Down Payment Assistance in Tennessee?
Tennessee buyers should look for a THDA-approved mortgage professional who understands Great Choice Plus and the HHF-DPA overlay, plus applicable Memphis and Nashville-area local programs.
I’m Mike Belfor, Branch Manager and Mortgage Loan Originator with American Pacific Mortgage, NMLS #264700, licensed to originate mortgages in Tennessee. My broader mortgage career includes more than 23 years of lending experience, approximately 578 first-time-homebuyer transactions, and approximately 115 transactions involving down payment assistance. Those are career-wide figures, not Tennessee-specific production numbers.
Ready to See What You Qualify For?
Reach out and I’ll run your numbers against what’s actually available in your county.
Mike Belfor | Branch Manager – Loan Originator | American Pacific Mortgage | NMLS #264700 | Licensed in Tennessee | mikebelfor.com
Program guidelines, rates, income limits, and funding availability are subject to change. Not all borrowers or properties qualify. Information is educational and should be confirmed against current program and underwriting guidelines.
Official Sources - THDA — Great Choice Home Loan
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