Overview
Tennessee's housing market offers opportunities for first-time buyers, with a median home price of approximately $310,000. The Tennessee Housing Development Agency (THDA) provides the primary state-level assistance through mortgage programs and down payment assistance for qualifying buyers.
The Great Choice Home Loan is a tennessee housing development agency's key offering for first-time buyers, providing below-market rate 30-year fixed mortgage with up to $6,000 in dpa. This program is designed to reduce the upfront cost barrier that prevents many qualified buyers from purchasing a home. Buyers must complete a HUD-approved homebuyer education course and work with an approved lender.
State Programs
Great Choice Home Loan
Below-market rate mortgage with DPAHomeownership for the Brave
Down payment assistance for veteransFederal Programs Available in Tennessee
These nationwide programs can be combined with Tennessee state assistance for maximum benefit.
FHA Loan Program
Low down payment mortgageVA Home Loan
Zero down payment mortgageUSDA Rural Development Loan
Zero down payment mortgageTips for First-Time Buyers in Tennessee
The Homeownership for the Brave extends additional support through up to $6,000 in forgivable dpa for veterans and active military. Tennessee has no state income tax (the Hall Tax was eliminated in 2021). Property taxes average about 0.64%. Combined with affordable home prices and THDA assistance, Tennessee offers strong value for buyers.
Federal programs complement state offerings in Tennessee. FHA loans require just 3.5% down with flexible credit requirements. VA loans provide zero-down-payment financing for veterans and active-duty military, particularly relevant near Fort Campbell, Arnold Air Force Base. USDA loans offer zero-down-payment options in eligible rural areas, which cover significant portions of Tennessee.
Prospective buyers should compare all available options, as combining state and federal programs can dramatically reduce out-of-pocket costs. Working with a HUD-approved housing counselor can help navigate the application process and identify the best program combination for your situation.
Frequently Asked Questions
For educational purposes only -- not financial or tax advice. Program details, eligibility requirements, and benefit amounts are subject to change. Verify all information directly with the administering agency before applying. Last verified: March 30, 2026.