Pairing Tennessee down payment assistance with a VA loan
VA loans don't require a down payment, so why add Tennessee down payment assistance? One reason: closing costs and prepaids. THDA assistance can cover most of what a VA buyer still brings to the table.
Note that THDA assistance is delivered with a THDA Great Choice first mortgage. If you take a VA-guaranteed first mortgage instead, you generally use THDA's assistance with THDA's own first loan rather than layering it onto a separate VA first; we will tell you which structure is actually cheaper for your situation.
What THDA assistance is
The Tennessee Housing Development Agency (THDA) pairs a fixed-rate Great Choice Home Loan with down payment and closing-cost assistance called Great Choice Plus.
| Program | Assistance |
|---|---|
| Great Choice Plus (flat) | $6,000 as a forgivable second mortgage (forgiven at the end of 30 years; due if you sell or refinance earlier) |
| Great Choice Plus (percentage) | Up to 5% of the sales price (maximum $15,000) as a 30-year amortizing second mortgage at the first-mortgage rate |
| Homeownership for Heroes | A Great Choice option for military and Veterans: 0.5% rate reduction and the first-time-buyer requirement waived statewide |
How it works for a Veteran buyer
For a full-entitlement Veteran, a VA loan already delivers $0 down and no monthly mortgage insurance — often the cheapest path on its own. THDA's value for a Veteran is usually the Homeownership for Heroes rate reduction on a Great Choice loan, or Great Choice Plus assistance when you want help with closing costs. We compare the VA-only path against the THDA path and show you the real numbers.
Only one down payment assistance program applies per transaction.
Things to watch
- Forgivable vs repayable. The $6,000 option is forgiven after 30 years; the percentage option is a repayable second that adds a payment.
- Education is required. THDA requires a homebuyer education course before closing.
- Limits. THDA sets income and purchase-price limits by county; plan on about a 640 credit score.
- Structure. THDA assistance rides with a THDA first mortgage; we confirm whether VA-only or THDA is cheaper for you.
Frequently asked questions
What down payment assistance is available for Veterans in Tennessee?
Tennessee's THDA offers Great Choice Plus down payment assistance, either a $6,000 forgivable second or up to 5% of the price (maximum $15,000), plus Homeownership for Heroes, which cuts the rate 0.5% and waives the first-time-buyer requirement for military and Veterans.
Can I combine THDA assistance with a VA loan?
THDA assistance is designed to ride with a THDA Great Choice first mortgage. For a full-entitlement Veteran, VA-only is often cheaper; when THDA helps, it is usually the Homeownership for Heroes rate reduction. We run both ways.
What is Homeownership for Heroes?
It is a THDA Great Choice option for active military and Veterans that cuts the interest rate by 0.5% and waives the first-time-buyer requirement anywhere in Tennessee.
Is THDA assistance a grant I don't pay back?
The $6,000 Great Choice Plus option is a forgivable second, forgiven after 30 years (repaid if you sell or refinance sooner). The percentage option is a repayable second mortgage. We confirm which you are getting.
What do I need to qualify for THDA?
Plan on about a 640 credit score, meeting THDA's county income and purchase-price limits, and completing a homebuyer education course before closing.