What down payment assistance is available in Memphis TN?

Memphis buyers have access to 5 tracked programs. THDA Great Choice Plus provides $6,000 as a 0% deferred second mortgage for first-time buyers with a 640 credit score. THDA Great Choice Plus 15K provides $15,000 at 2% interest over 10 years. THDA Heroes provides a 0.5% rate reduction for military, veterans, teachers, first responders, and healthcare workers. The Memphis and Shelby County Office of Housing and Community Development administers city and county programs for buyers at 80% AMI or below. Pathway Lending serves buyers who do not qualify for THDA. Stack THDA with local programs for up to $20,000 or more in combined assistance.

What is THDA Great Choice Plus?

THDA Great Choice Plus is a $6,000 second mortgage at 0% interest, deferred until you sell, refinance, or pay off the first mortgage. No monthly payment during the deferral period. On a $215,000 FHA purchase in Memphis, the 3.5% down payment is $7,525. The $6,000 covers 80% of that requirement, leaving approximately $1,525 in additional down payment funds needed plus closing costs. Must use a THDA-approved lender. First-time buyer requirement applies; check targeted area exceptions.

What is THDA Great Choice Plus 15K?

THDA Great Choice Plus 15K provides $15,000 in down payment assistance at 2% interest over a 10-year term, resulting in approximately $138 per month. On a $215,000 Memphis purchase, the $15,000 covers the full 3.5% FHA down payment ($7,525) and most closing costs, leaving the buyer with minimal cash to close. The trade-off versus the $6,000 option is the $138 monthly payment added to your housing cost. Buyers should model both options to determine which produces the better overall cash position.

What is the THDA Heroes program?

THDA Heroes provides a 0.5% reduction on the first mortgage interest rate for eligible borrowers: active military, veterans, law enforcement, firefighters, EMTs, teachers, and healthcare workers. This is stacked on top of the THDA Great Choice first mortgage. Combined with Great Choice Plus DPA, eligible heroes can access below-market rate financing plus $6,000 to $15,000 in down payment assistance. Memphis has a significant military presence through Naval Support Activity Mid-South in Millington and a large healthcare workforce through Methodist Le Bonheur, Baptist Memorial, and Regional One Health.

Can I stack THDA with city or county programs in Memphis?

Yes, in many cases. The Memphis and Shelby County Office of Housing and Community Development administers programs using HUD CDBG and HOME funds for buyers at 80% AMI (approximately $62,400 for a family of four in Shelby County). Shelby County Community Services separately funds homebuyer assistance. Stacking THDA Great Choice Plus $6,000 with a local $8,000 to $10,000 program can bring combined assistance to $14,000 to $16,000, covering the full cash needed to close on a $215,000 FHA purchase. Confirm current stacking rules with your THDA-approved lender.

Do I have to be a first-time buyer for Memphis DPA?

THDA Great Choice Plus requires first-time buyer status, defined as no ownership interest in a primary residence in the last 3 years. Exceptions apply in federally designated targeted areas. Check with your THDA-approved lender whether the specific property you are purchasing qualifies for a targeted area exception. Shelby County and city programs set their own first-time buyer rules, which vary by program cycle.

What credit score do I need for DPA in Memphis?

THDA Great Choice programs require a 640 minimum credit score. Some local Memphis and Shelby County programs accept 580. Pathway Lending, a CDFI serving Tennessee, works with buyers who do not qualify for THDA and sets its own credit standards. The practical floor for THDA access is 640.

What is the FHA loan limit in Memphis (Shelby County)?

The FHA loan limit for Shelby County is $472,030 for a single-family home in 2026. Memphis's median home price of approximately $215,000 is well below this limit, meaning all FHA-based DPA programs apply to virtually every purchase in the metro area. The affordability of Memphis prices is what makes DPA so powerful here.

What are the income limits for THDA programs in Memphis?

Shelby County THDA income limits are approximately $78,000 to $93,600 depending on household size, based on the Memphis MSA AMI of approximately $78,000. These limits are lower than Davidson County (Nashville) because the Memphis AMI is lower. Confirm exact current limits at thda.org or with a THDA-approved lender, as limits are updated annually.

What is Pathway Lending and who should use it?

Pathway Lending is a Community Development Financial Institution (CDFI) serving Tennessee. It provides affordable mortgage products for buyers who do not qualify for THDA programs due to credit or income. If your credit score is below 640 or you exceed THDA income limits, Pathway Lending is the alternative path. Visit pathwaylending.org for current program details and eligibility.

Do Memphis buyers in Mississippi or Arkansas qualify for THDA?

No. THDA is a Tennessee state program. Memphis borders both Mississippi and Arkansas, and some buyers purchase homes just across state lines in DeSoto County (MS) or Crittenden County (AR). Those buyers do not qualify for THDA. Buyers must purchase in Tennessee to access THDA Great Choice programs. Buyers in Mississippi may be eligible for Mississippi Home Corporation programs, and Arkansas buyers for ADFA programs, but neither is the same as THDA.

Down Payment Assistance Memphis TN 2026 | THDA Great Choice, Up to $20K+ Combined

Last updated: April 2026 · Program availability changes frequently

Down Payment Assistance in Memphis: Overview

Memphis has a median home price around $215,000, one of the lowest of any major metro in the country. At that price, the FHA minimum down payment is $7,525. THDA Great Choice Plus provides $6,000 as a 0% deferred second mortgage. That single program covers 80% of the entire FHA down payment requirement. Stack it with a Shelby County or city program and a buyer at 80% AMI can approach the closing table with near-zero cash out of pocket. The opportunity in Memphis is significant precisely because prices are low enough that modest assistance solves the whole problem.

For buyers who need more, THDA Great Choice Plus 15K provides $15,000 at 2% interest over 10 years, approximately $138 per month. On a $215,000 FHA purchase with $7,525 down and $4,500 to $6,000 in closing costs, $15,000 covers the entire amount needed with buffer remaining. The trade-off is a $138 monthly addition to housing costs. Buyers with minimal cash savings who can absorb a modest payment increase will find the 15K option eliminates the cash-to-close barrier entirely.

THDA Heroes gives teachers, healthcare workers, law enforcement, firefighters, EMTs, and military personnel a 0.5% rate reduction on the first mortgage. Memphis has a large healthcare workforce anchored by Methodist Le Bonheur Healthcare, Baptist Memorial Health Care, and Regional One Health. Naval Support Activity Mid-South in Millington, roughly 20 miles north, brings significant military and veteran activity into the market. A healthcare worker using THDA Great Choice with Heroes rate reduction and Great Choice Plus DPA is accessing below-market financing plus $6,000 toward closing costs simultaneously.

The Memphis and Shelby County Office of Housing and Community Development administers separate city and county programs using HUD CDBG and HOME funds. These programs target buyers at 80% AMI (approximately $62,400 for a family of four in Shelby County). Stacked against THDA, a buyer at that income level can access $14,000 to $20,000 or more in combined assistance on a $215,000 home where total cash needed is $12,000 to $13,500. The math closes completely at this price point with the right program stack.

Quick Answer

Yes. Memphis buyers have access to THDA statewide programs plus Shelby County and city-level assistance. Combined, these can cover the full cash needed to close on a median-priced Memphis home.

THDA Great Choice Plus: $6,000 at 0% deferred, first-time buyers, 640 credit. THDA Great Choice Plus 15K: $15,000 at 2% interest over 10 years. THDA Heroes: 0.5% rate reduction for eligible workers. Memphis/Shelby County HCD: additional funds at 80% AMI. On a $215,000 FHA purchase, THDA $6,000 plus a local $8,000-$10,000 covers the full $12,000-$13,500 cash needed at closing.

All THDA programs require a THDA-approved lender. The property must be in Tennessee, not Mississippi or Arkansas.

Memphis Market Context

Memphis is the largest city in Tennessee by population and the economic hub of the Mid-South region. At a median home price of approximately $215,000, it is one of the most affordable major metros in the Southeast. That affordability is the core advantage for DPA-assisted buyers: a small grant eliminates the entire barrier.

Major Employers

FedEx global headquarters employs thousands of white-collar workers. The healthcare sector is massive: Methodist Le Bonheur Healthcare, Baptist Memorial Health Care, and Regional One Health are among the largest employers in the region. St. Jude Children's Research Hospital anchors the Memphis Medical District. Memphis also has significant logistics, manufacturing, and distribution infrastructure given its position as a major transportation hub.

Neighborhoods and Counties

Midtown Memphis and Cooper-Young are popular urban neighborhoods with strong walkability and character. Germantown and Collierville are eastern Shelby County suburbs with higher price points and strong school systems. Binghampton, Frayser, and Whitehaven offer affordable housing stock where DPA assistance has the most impact. All locations in Shelby County qualify for both THDA statewide and Shelby County local programs.

State Line Consideration

Memphis borders both Mississippi (DeSoto County) and Arkansas (Crittenden County). Some buyers purchase just across state lines for commuting access. Buyers in DeSoto County or Crittenden County do not qualify for THDA. They would need Mississippi Home Corporation or Arkansas Development Finance Authority programs respectively. Confirm the property's Tennessee location before planning around THDA.

Military Population

Naval Support Activity Mid-South is located in Millington, approximately 20 miles north of downtown Memphis. It generates significant military and veteran buyer activity in Shelby County. Active duty, veterans, and their families qualify for THDA Heroes rate reduction plus VA loan benefits. Combining VA financing with THDA Heroes creates an exceptional stack for this buyer segment.

How DPA Programs Work in Memphis

Deferred Second Mortgages (Great Choice Plus $6K)

The $6,000 sits as a silent second lien at 0% interest. No monthly payment. The balance is due when you sell, refinance, or pay off the first mortgage. The deferral makes it invisible to your monthly budget for as long as you hold the home. When you eventually sell, the $6,000 comes out of your proceeds. On a $215,000 home that appreciates to $265,000 in seven years, repaying $6,000 from $50,000 in equity is straightforward. For buyers with minimal savings, this is the cleanest DPA structure available.

Amortizing Second Mortgages (Great Choice Plus 15K)

The $15,000 is repaid over 10 years at 2% interest, approximately $138 per month. This adds to your total housing payment but eliminates the cash-to-close barrier entirely. Best for buyers who have stable income but minimal savings. If the $138 monthly payment fits the debt-to-income ratio and the buyer has no cash reserves, the 15K option often makes more sense than trying to patch together smaller grants. Model both scenarios with your lender before deciding.

Rate Reduction Programs (Heroes)

The THDA Heroes benefit is not a cash grant. It reduces the interest rate on the first mortgage by 0.5 percentage points. On a $215,000 FHA loan, a 0.5% rate reduction saves approximately $65 to $75 per month depending on the base rate. Over 30 years, that is $23,000 to $27,000 in total interest savings. Stack it with Great Choice Plus DPA and eligible buyers get both upfront cash and lifetime rate savings simultaneously.

Local CDBG and HOME Grants

The city and county programs funded through HUD CDBG and HOME allocations typically operate as grants or forgivable loans for buyers below 80% AMI. Program structure varies by funding cycle. Some years offer larger amounts; others run out of funds mid-year. Contact the Memphis and Shelby County Office of Housing and Community Development at (901) 636-6500 to confirm current availability before planning a purchase timeline around these funds.

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This guide is for informational purposes only and is not a commitment to lend. Program availability, terms, and eligibility requirements change frequently. All program details should be verified directly with the administering agency or an approved lender before making financial decisions. DownPaymentScout is an independent resource and is not affiliated with any government agency or lending institution. Information is believed accurate as of the date shown but is not guaranteed. Last updated April 2026. Program availability changes frequently.

Down Payment Assistance in Memphis, Tennessee