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Tennessee First-Time Home Buyer Programs

First-time buyers in Tennessee have access to several programs that can reduce the down payment, lower the interest rate, or provide closing cost assistance. Understanding which programs you qualify for — and how to combine them — is the starting point for any first-time purchase in Tennessee.

What "first-time buyer" means for program eligibility

Most first-time buyer programs define "first-time buyer" as someone who has not owned a primary residence in the past three years — not necessarily someone who has never owned a home. This means buyers who previously owned a home but have been renting for three or more years may qualify for first-time buyer programs.

Some programs have exceptions for buyers in federally designated targeted areas, divorced individuals, and other circumstances. Verify your specific eligibility with Morgan Hardy.

Tennessee-specific programs

THDA Great Choice Home Loan

Below-market 30-year fixed rate for qualifying first-time buyers. Available with FHA, VA, USDA, or conventional. Income and purchase price limits apply by county.

THDA Great Choice Plus

Second mortgage providing down payment and closing cost assistance. Paired with Great Choice first mortgage. Deferred repayment — no monthly payments, repaid on sale or refinance.

Homeownership for Heroes

Reduced rate for military, veterans, and first responders. Does not require first-time buyer status.

Federal programs available in Tennessee

FHA (3.5% down)

The most widely used first-time buyer program nationally. 3.5% down with a 580+ credit score. Flexible qualification. Available statewide. Can be paired with THDA Great Choice for a below-market rate.

USDA (0% down)

Zero-down financing for eligible rural properties. Tennessee has significant USDA-eligible areas. Income limits apply. Can be paired with THDA Great Choice.

VA (0% down)

Zero-down for eligible veterans and active-duty military. No PMI. Can be paired with THDA Homeownership for Heroes.

Conventional 3% down (HomeReady / Home Possible)

Fannie Mae and Freddie Mac programs for first-time buyers or those at/below area median income. Cancellable PMI is an advantage over FHA for buyers who build equity quickly.

How to combine programs

The most powerful combinations for Tennessee first-time buyers:

  • Great Choice + FHA + Great Choice Plus: Below-market rate FHA loan with down payment assistance. Reduces both the rate and the upfront cash needed.
  • Great Choice + USDA: Zero-down with a below-market rate in eligible rural areas.
  • Homeownership for Heroes + VA: Zero-down with a reduced rate for eligible military and veterans.

Find the right combination for your situation

Morgan Hardy is a THDA-approved lender and can identify which programs you qualify for and how to combine them for the best outcome in your specific county and price range.

Contact Morgan Hardy