Franklin, Tenn. — October 1, 2026

For many Middle Tennessee households, the hardest step into ownership is not qualifying for a first mortgage but assembling cash for the down payment and closing costs. The Tennessee Housing Development Agency’s Great Choice Home Loan program, paired with Great Choice Plus down-payment assistance, is built for that gap: a 30-year fixed first mortgage with a second mortgage that can cover down payment, closing costs, or both—subject to county income and purchase-price limits, credit standards, and required homebuyer education.

Great Choice targets middle- and moderate-income Tennesseans. Every person on the loan application must have a credit score of at least 640. Household income and purchase-price ceilings vary by county, so limits in Williamson will not match Rutherford, Maury, or Davidson. Most Great Choice loans are insured by FHA or guaranteed by USDA Rural Development, which can allow borrowing up to 96.5 percent of the purchase price—a minimum 3.5 percent down payment that Great Choice Plus may help fund. A conventional path is also available through Freddie Mac’s HFA Advantage product. Off-site manufactured housing can be purchased with a Great Choice loan when other program rules are met.

THDA’s first-time homebuyer definition is specific. Generally, a first-time buyer has not occupied a home they owned as a principal residence during the past three years. All borrowers obligated on the loan must meet that test unless the property sits in a county or census tract designated as a Targeted area, where the first-time requirement is waived. THDA loans are for principal residences onlynot investment property, second homes, or business-use real estate. A property may include up to four units if the borrower occupies one as a principal residence; rental income from the other units counts toward the household income limit.

Repeat buyers are not automatically excluded. THDA allows participation if the purchase is in one of 43 targeted counties, in designated areas within 15 additional counties, or if the buyer is qualified military and/or a spouse. Those exceptions matter for movers within Middle Tennessee who already owned elsewhere but still need structured assistance.

Great Choice Plus offers three assistance structures. The Deferred Option provides up to $6,000 or up to $10,000 as a forgivable second mortgage at zero percent interest. The second loan is forgiven at the end of a 10-year term; if the home is sold or refinanced before then, the assistance is due in full. For buyers who plan to stay and need a smaller cash bridge, the deferred path adds no monthly payment during the forgiveness period—provided they understand the early-exit repayment rule.

The Amortizing Option works differently. Assistance can reach up to 5 percent of the sales price, capped at $15,000, as a second mortgage that amortizes over 30 years at the same interest rate as the Great Choice first mortgage. Buyers take on an additional monthly payment but can access a larger amount than the deferred caps allow when the purchase price supports it.

A third path applies to newly built or proposed construction: down-payment assistance up to $25,000 as a second mortgage with a 15-year amortizing term and a zero percent interest rate on the second. For households looking at new construction in growing Middle Tennessee corridors, that higher cap and interest-free second can change cash needed at closing—again subject to first-mortgage eligibility and any lender overlays.

Homebuyer education and counseling are required on Great Choice, Great Choice Plus, and Homeownership for Heroes loans. THDA manages a network of approved counselors who teach and certify the courses. Borrowers must continue to comply with both the primary and secondary loans, or penalties—including immediate repaymentmay apply.

Homeownership for Heroes sits alongside the core stack for people who serve their communities. Eligible participants include active-duty military, National Guard members, and veterans; EMTs and paramedics; firefighters; kindergarten through 12th-grade teachers and principals employed full time in a Tennessee public or private school; state and local law enforcement officers; and state and local public safety emergency dispatchers. Available on FHA, USDA, and VA loans, the program offers a reduced interest rate and waives the first-time homebuyer requirement statewide for qualified military members and veterans. Financing can reach up to 100 percent of the purchase price with VA or USDA-RD, or up to 96.5 percent with FHA.

Two conditions apply across THDA mortgages. All mortgages are for 30-year terms at fixed rates; borrowers may not buy down the rate by paying discount points. All mortgages are subject to federal recapture provisions if the home is sold within the first nine years. Whether any recapture amount is owed depends on income, gain, and holding period at sale; buyers should ask their tax adviser and a THDA-approved lender how the rule could apply to their facts.

County charts, Targeted-area maps, and insurer overlays can tighten credit, reserves, or property standards beyond THDAs baseline. Great Choice Plus is secondary financing—borrowers must qualify for both liens and keep both current. For Middle Tennessee shoppers comparing Franklin, Spring Hill, Murfreesboro, or Nashville addresses, the practical next step is to confirm the property’s county limits, Targeted-area status if claiming a first-time waiver, and whether Heroes eligibility applies, then complete required education before locking a contract that depends on assistance closing on time.

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