Down Payment Assistance and Homeownership for Heroes Could Make Homeownership Closer Than You Think
One of the most common things we hear from first-time homebuyers is:
“I’d love to buy a house, but I don’t have enough saved for the down payment and closing costs.”
Before you decide that homeownership isn’t possible, you should know about the programs offered through the Tennessee Housing Development Agency (THDA).
THDA offers fixed-rate mortgage programs and down payment assistance designed to help qualified Tennessee homebuyers overcome some of the biggest financial barriers to purchasing a home.
You May Not Need 20% Down
The idea that you have to save 20% before purchasing a home keeps many potential buyers renting longer than necessary.
Depending on the loan program you qualify for, your required down payment could be significantly lower.
THDA’s Great Choice program can work with several mortgage types, and qualified buyers may be able to pair their mortgage with Great Choice Plus Down Payment Assistance.
How Much Down Payment Assistance Is Available?
THDA currently offers several DPA structures for qualified borrowers.
One option provides assistance of up to 5% of the home’s purchase price, with a maximum of $15,000, through an amortizing second mortgage.
THDA also offers deferred assistance options of up to $6,000 or $10,000, depending on program qualifications. These carry 0% interest and can be forgiven at the end of the 10-year term, although repayment is required if the home is sold or refinanced before that term ends.
For qualifying newly built or proposed-construction homes, THDA currently lists an assistance option of up to $25,000, structured as a 15-year, 0% second mortgage.
That’s why it’s important to speak with a THDA-approved lender rather than assuming you don’t have enough cash to buy.
Who Is Considered a First-Time Homebuyer?
Here’s another misconception:
“First-time homebuyer” doesn’t necessarily mean you’ve never owned a home.
Under THDA’s general eligibility rules, a first-time homebuyer is someone who has not occupied a home they owned as their principal residence during the previous three years. Certain exceptions and targeted-area rules can also apply.
So even if you owned a home years ago, it’s worth asking whether you qualify.
And There’s Something Special for Tennessee’s Heroes
THDA’s Homeownership for Heroes program provides additional benefits for qualified Tennessee public servants.
Eligible groups currently include:
- Active-duty military, National Guard members and veterans
- Firefighters
- EMTs and paramedics
- State and local law-enforcement officers
- Full-time K–12 classroom teachers employed by Tennessee public or private schools
And teachers are a particularly exciting addition: THDA expanded Homeownership for Heroes to include Tennessee teachers in May 2026.
What’s the Benefit?
Homeownership for Heroes offers qualified borrowers a reduced interest rate compared with THDA’s standard Great Choice rate.
THDA states that eligible Heroes participants can receive up to a 0.50 percentage-point interest-rate reduction. Because mortgage rates can change, buyers should verify the current rate with a THDA-approved lender before making a purchase decision.
That lower rate can translate into meaningful monthly savings over the life of a mortgage.
You May Be Closer Than You Think
Here’s the important part:
Don’t decide whether you can buy a home before you know your options.
Maybe you need more time to save.
Maybe you need to work on your credit.
Maybe there’s a financing program that changes the entire picture.
You won’t know until you run the numbers.
At Harney Homes, we can help you understand the homebuying process, connect you with an appropriate THDA-approved lender, explore available homes in Murfreesboro and Middle Tennessee, and help you build a realistic path toward homeownership.
Your first conversation doesn’t have to be:
“I’m ready to buy.”
It can simply be:
“I’d like to know what it would take.”
And that’s a great place to start.
THDA programs, interest rates, income limits, purchase-price limits and eligibility requirements are subject to change. Financing information is for educational purposes and should be verified with a THDA-approved participating lender.