The Great Choice Loan Program is designed to help first-time homebuyers overcome one of the greatest obstacles in the homeownership process, by helping to provide the money to cover the down payment and closing costs. 

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November 19, 2017
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Great Choice Loan Program

Financial Assistance for Homebuyers in Tennessee

Tennessee Housing Development Agency (THDA)’s Great Choice Loan Program is designed to help first-time homebuyers overcome one of the greatest obstacles in the homeownership process, by helping to provide the money to cover the down payment and closing costs. The Great Choice Loan Program provides qualified applicants up to 4 percent down payment assistance to be used with either FHA, VA, USDA-Rural Development or uninsured conventional loans.

There are two parts to THDA’s program, the Great Choice and Great Choice Plus.
  • Great Choice is the 30-year, fixed rate mortgage loan referenced above.
  • Great Choice Plus is a 15-year, zero percent interest, deferred, second mortgage to provide homebuyers with down payment assistance up to 4 percent of the purchase price of the home.
Great Choice Plus is a zero percent interest, non-amortizing, deferred loan, with no monthly payments. The term of the loan is 15 years with a forgiveness feature that begins after the tenth year, and is fully forgiven at the end of the fifteenth year. The amount must be repaid only if the borrower chooses to sell the property before the 15 years are up, refinances the home.

The THDA requires that the following criteria be met to become eligible for the Great Choice Loan Program:
  • The THDA currently requires that applicants have a minimum credit score of 640. If a borrower’s score is lower than 640, THDA’s homebuyer education counselors can help you with strategies to raise their credit score
  • Great Choice Loans are designed for low to moderate income Tennesseans, therefore it is exclusive to household that fall under the set income limits, which are based on the size of household and county in which the home is being purchased.
  • Additionally, the Great Choice Loan Program is meant for modest homes, therefore maximum purchase price limits are set and vary by county.
  • THDA’s purpose is also to help applicants become long-term, successful homeowners, therefore it requires applicants to take a homebuyer education course before they can qualify for down payment assistance.

Down Payment Grants in Tennessee

The Great Choice Loan Program is designed to help first-time homebuyers overcome one of the greatest obstacles in the homeownership process, by helping to provide the money to cover the down payment and closing costs.