First-time home buyer programs in Tennessee and Nashville

What THDA’s Great Choice Home Loan requires

THDA created the Great Choice Home Loan for Tennesseans of middle and moderate income. According to THDA’s program page:

• The loan has a 30-year term and a fixed interest rate.
• Everyone on the application needs a credit score of at least 640.
• Most Great Choice loans are insured by FHA or USDA Rural Development, so you can borrow up to 96.5% of the price and need at least 3.5% down. (See our guide to FHA loans.)
• Income and purchase price limits vary by county.
• A conventional option with down payment help, the Freddie Mac HFA Advantage, is also offered.

First-time buyer rule. The program is built for first-time buyers, but THDA says repeat buyers can take part if they have not lived in a home they own for at least three years, buy in one of 43 targeted counties or in designated areas of 15 more counties, or are qualified military and spouses.

Homebuyer education. THDA requires every homebuyer to complete a homebuyer education course. The certificate of completion is valid for 12 months and goes to your loan officer with the application. The course is required for down payment assistance.

Down payment assistance: Great Choice Plus

If you qualify for a Great Choice loan, you can add a second loan from Great Choice Plus for your down payment and closing costs. THDA lists these options:

Source: THDA, “Down Payment Assistance”. You must keep complying with the terms of both loans, or penalties may apply, including immediate repayment.

THDA also runs Homeownership for Heroes on FHA, USDA and VA loans, with a reduced interest rate and the first-time buyer requirement waived for qualified military and veterans, EMTs and paramedics, firefighters, full-time K-12 teachers and principals, state and local law enforcement officers and public safety dispatchers.

Limits that apply in Nashville (Davidson County)

THDA’s county table, dated August 1, 2026, lists for Davidson County:

Source: THDA, “Great Choice & HFA Advantage Mortgage Loan Programs: Acquisition Cost & Income Limits by County”, effective August 1, 2026. Neighboring counties such as Williamson, Wilson, Sumner, Rutherford and Robertson show the same income limits.

The 2024 Census median value of a home in the city of Nashville is $438,800 (see Tennessee home prices), which is under the $500,000 cap. That median is an owner’s estimate, not a sale price, but it suggests many Nashville homes fall within the program’s price limit.

An illustrative example

For a $438,800 purchase with an FHA-insured Great Choice loan, 3.5% down is $15,358 and the loan is about $423,442 (96.5%). The amortizing Great Choice Plus option would be 5% of the price, $21,940, but THDA caps it at $15,000. This is an example of how the limits interact, not a quote: your lender confirms your rate, mortgage insurance and eligibility.

Help in Nashville

• Metro Nashville. The Barnes Housing Trust Fund makes competitive grants to nonprofit housing developers, not to individual buyers. The Metro Housing Division’s page says the next funding round (Round 17) will be announced in 2027. The Metropolitan Development and Housing Agency (MDHA) administers the federal block grants that Nashville receives from HUD. We did not find a Metro program on these pages that pays down payment help directly to buyers.

How to apply

1. Take a THDA-approved homebuyer education course. Online courses must be followed by a session with an approved housing counselor. THDA lists the regular price of its online course at $100, or $30 for employees of employers in its STEP In program.
2. Ask a THDA-approved lender to run your numbers. THDA lists approved lenders and REALTORS on its website.
3. Apply for the Great Choice loan, and add Great Choice Plus if you want down payment help.
4. Compare the total cost with a standard loan. Our guides on closing costs and private mortgage insurance explain the other costs.

See also closing costs in Tennessee and our page on buying a home in Nashville.