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THDA Homebuyer Assistance: Qualified Tennessee Buyers May Receive Up to $25,000 for a New Home

October 19, 2026

For many future homeowners, the biggest obstacle to buying a new home is not necessarily the monthly mortgage payment. It is the amount of money needed upfront.

A down payment, closing costs, and other expenses associated with purchasing a home can add up quickly. For qualified Tennessee homebuyers, a new Tennessee Housing Development Agency homebuying assistance option could help make those upfront costs more manageable.

Eligible buyers purchasing qualifying new-construction homes may be able to receive up to $25,000 in 0% interest assistance toward down payment and closing costs, subject to program requirements.

For first-time homebuyers, veterans, and other eligible Tennessee buyers considering a new Ole South home, the program may open up a path to homeownership that once felt out of reach.

What Is the New THDA Homebuyer Assistance Program?

The Tennessee Housing Development Agency, commonly known as THDA, offers mortgage and homebuyer-assistance programs designed to help eligible Tennesseans purchase a primary residence.

For qualifying new-construction purchases, THDA's new assistance option may provide up to $25,000 toward down payment and closing costs.

The statewide maximum sales price for an eligible home is currently $500,000.

This assistance is not automatically available to every buyer or every property. Income limits, credit requirements, occupancy requirements, property eligibility, and other program conditions apply. Buyers must work with an approved participating lender to determine whether they and the home they are considering meet current THDA requirements.

Who May Qualify for Up to $25,000 in THDA Assistance?

THDA currently identifies several pathways that may allow a buyer to qualify for its new-construction assistance.

Eligible buyers may include:

• First-time homebuyers
• U.S. military veterans
• Buyers purchasing in certain THDA-designated targeted areas or census tracts

Additional financial and program requirements apply. THDA currently lists a minimum credit score of 640 for borrowers using the program, along with household-income requirements.

The home must also be used as the buyer's primary residence, and approved homebuyer education is required.

Being part of one of the eligible buyer groups does not guarantee approval. A participating lender will need to evaluate the buyer, proposed financing, and property under the complete program guidelines.

What Is the $500,000 Home Price Limit?

The new-construction program currently has a statewide purchase-price limit of $500,000.

That means the contract price of the home generally cannot exceed $500,000 for a buyer to use this particular THDA assistance option.

For Ole South buyers, that could make the program relevant to a number of new-home options throughout Middle Tennessee, depending on current pricing, property eligibility, and the buyer's individual qualifications.

A preferred lender can help determine whether a specific Ole South home meets the applicable THDA requirements before a buyer moves forward.

Military Members, Teachers and First Responders May Have Another THDA Benefit

Some homebuyers may qualify for an additional THDA benefit through Homeownership for Heroes, the program formerly known as Homeownership for the Brave.

Homeownership for Heroes is designed for eligible Tennesseans who serve their communities, including qualified:

• Veterans and active-duty military members
• National Guard members
• Firefighters
• EMTs and paramedics
• State and local law enforcement officers
• Full-time K-12 classroom teachers employed by Tennessee public or private schools

Qualified participants may receive a reduced interest rate on an eligible THDA Great Choice Home Loan. THDA currently describes the Homeownership for Heroes benefit as a 0.50 percentage-point reduction from the applicable Great Choice program rate.

Program rates and requirements can change, so buyers should speak directly with a THDA-approved lender about the rate available when they apply.

Can First-Time Homebuyers Use THDA Assistance for a New Ole South Home?

First-time homebuyers are one of the groups THDA identifies as potentially eligible for the new-construction assistance program. Veterans may also qualify without meeting the standard first-time-buyer requirement in certain THDA programs.

The important step is determining eligibility before assuming the assistance will be available.

Ole South partners with First Community Mortgage as a lending partner. A mortgage professional familiar with Ole South communities and THDA programs can review your circumstances, explain the current requirements, and help determine whether a home you are considering is eligible.

Start by Exploring Your Financing Options

If upfront costs have made buying a home feel farther away than you expected, it may be worth finding out which homebuying programs are available to you.

Qualified buyers may be eligible for up to $25,000 in THDA new-construction assistance, while qualifying military members, teachers, and first responders may also have access to a reduced program rate through Homeownership for Heroes.

Eligibility, assistance amounts, interest rates, repayment terms, income limits, credit requirements, and property requirements are subject to THDA guidelines and may change. Program availability is not guaranteed, and buyers should consult an approved lender for complete and current details.

Ready to explore your options? Visit Ole South's Financing Center to connect with a preferred lender and learn more about financing an eligible new home.