HUD Articles
TENNESSEE THDA 5% DOWN PAYMENT ASSISTANCE PROGRAM
January 02, 2019
1. Great Choice Plus
Anywhere in Tennessee, all homebuyers who qualify for a Great Choice Home Loan can also apply for down payment assistance in the form of a Great Choice Plus second loan worth a maximum of 5% of the home's purchase price.
In 2017, approved homebuyers received an average of $7,144 in down payment assistance through the Great Choice Plus program.
If you qualify for a Great Choice Home Loan, you can apply for financial assistance with your down payment and/or closing costs.
Financial assistance comes in the form of a second mortgage loan on your home. This Great Choice Plussecond loan has no monthly payments and no interest for as long as you own and live in your home. Here's what that means:
No Monthly Payments
You don't have to pay back a penny on this secondary loan until you decide to sell, move out of, or refinance your home.
No Interest
When you decide to sell, move out of, or refinance your home, you'll only pay back exactly what you borrowed--not a penny more.
THDA executive director Ralph Perrey explains it like this: “Under this program, we allow qualified homebuyers to borrow money at no interest to cover some of their down payment and closing costs, but we do require them to return the money when they sell, refinance or move out of the home.”
Homebuyer Education
To qualify for down payment assistance, you must complete a pre-purchase Homebuyer Education course from a THDA-approved instructor. You can take this course online or in a classroom with other homebuyers like yourself.
To learn more or to enroll in one of these courses, click here.
Get approved
If Great Choice Plus sounds like a great choice to you, check out your options:
You must continue to comply with the terms and conditions of your primary Great Choice Home Loan and secondary Great Choice Plus loan or penalties may apply, including immediate repayment.
If you qualify for a Great Choice Home Loan, you can apply for financial assistance with your down payment and/or closing costs.
Financial assistance comes in the form of a second mortgage loan on your home. This Great Choice Plussecond loan has no monthly payments and no interest for as long as you own and live in your home. Here's what that means:
No Monthly Payments
You don't have to pay back a penny on this secondary loan until you decide to sell, move out of, or refinance your home.
No Interest
When you decide to sell, move out of, or refinance your home, you'll only pay back exactly what you borrowed--not a penny more.
THDA executive director Ralph Perrey explains it like this: “Under this program, we allow qualified homebuyers to borrow money at no interest to cover some of their down payment and closing costs, but we do require them to return the money when they sell, refinance or move out of the home.”
Homebuyer Education
To qualify for down payment assistance, you must complete a pre-purchase Homebuyer Education course from a THDA-approved instructor. You can take this course online or in a classroom with other homebuyers like yourself.
To learn more or to enroll in one of these courses, click here.
Get approved
If Great Choice Plus sounds like a great choice to you, check out your options:
You must continue to comply with the terms and conditions of your primary Great Choice Home Loan and secondary Great Choice Plus loan or penalties may apply, including immediate repayment.
First-time Homebuyers
Getting Started
The Great Choice Home Loan program was designed to help first-time homebuyers overcome these common obstacles:
- Not enough savings for a down payment
- Uncertain how the home-buying process works
- Worried you won’t qualify for a home loan
- Concerned about high-risk, “gimmick” mortgages
Get Help with Your Down Payment
Most Great Choice Home Loans are insured by FHA or USDA-RD, which means you can borrow up 96.5% of the total price of the home you’re buying.
This means you need a minimum of3.5% for a down payment—and financial assistance is available to every approved homebuyer! You can use your financial assistance for any loan-related costs, including down payment and closing costs.
Act with Confidence
THDA manages a network of approved homeownership counselors who teach homebuyer education classes. Signing up for one of these classes is the first thing you should do when you start your housing search.
A homebuyer education class can teach you:
- What makes a home right for you
- What questions to ask when looking at a home
- How to qualify for a home loan
- What’s involved in maintaining a home once you’re a homeowner
This class is required if you plan to apply for down payment assistance.
Consistent, Reliable Home Loans
As a state agency, THDA designed the Great Choice Home Loan program so that lenders are able to say “yes” to more first-time homebuyers. Responsible lending is our top priority. We only offer 30-year, fixed interest rate home loans, and we’ve never offered anything else.
If a Great Choice Home Loan sounds like it might be right for you, we encourage you to contact a lender and REALTOR® who are trained and approved for the Great Choice Home Loan program.
Find an approved lender in your area.
Find an approved REALTOR in your area.
When you choose a Great Choice Home Loan, your monthly payments help fund home repairs for the elderly, ramp installations for people with disabilities, emergency services for the homeless, and other state housing programs.
Find out why Great Choice Home Loans are the Mortgage with Heart.
https://thda.org/homebuyers/down-payment-assistance
