What down payment assistance programs are available in Nashville?

Nashville buyers have access to 5 programs. THDA Great Choice Plus provides either $6,000 (deferred, 0% interest) or $15,000 (amortizing at 2%, ~$138/month) for first-time buyers with a 640 credit score. The Housing Fund provides up to $35,000 as a deferred second mortgage for buyers with 600+ credit. The THDA Heroes Program provides a 0.5% interest rate reduction for military, veterans, first responders, teachers, and healthcare workers. Metro Nashville's Barnes Housing Trust Fund offers city-funded programs that vary year to year. USDA loans eliminate the down payment entirely for eligible properties in outer Davidson County and surrounding areas.

What is THDA Great Choice Plus?

THDA Great Choice Plus is the down payment assistance layer attached to THDA's Great Choice Home Loan. Buyers choose between two options: the $6,000 deferred second mortgage (0% interest, due on sale, refinance, or payoff of the first mortgage) or the $15,000 amortizing second mortgage (2% interest, 10-year repayment at approximately $138 per month). Buyers cannot take both. The $6,000 deferred option is better for buyers prioritizing cash flow. The $15,000 option provides more upfront assistance but adds a monthly payment. Both require a 640 minimum credit score and first-time buyer status (exceptions apply in federally targeted areas).

What is The Housing Fund and how much does it provide?

The Housing Fund is a Nashville-area Community Development Financial Institution (CDFI) that provides up to $35,000 in down payment assistance as a deferred second mortgage. The income limit is 120% of Area Median Income. The minimum credit score is 600, which is lower than THDA's 640 requirement. This makes The Housing Fund the primary option for Nashville buyers with credit scores between 600 and 639 who do not qualify for THDA programs. Verify current availability and program terms at housingfundtn.org.

What is the THDA Heroes Program?

The THDA Heroes Program provides a 0.5% below-market interest rate reduction on the first mortgage for eligible public servants: active military, veterans, law enforcement, firefighters, EMTs, teachers, and healthcare workers. It is not a cash grant but reduces the long-term cost of the loan. On a $450,000 loan, a 0.5% rate reduction saves approximately $2,250 per year. The Heroes Program can be combined with Great Choice Plus DPA for both cash assistance and a reduced rate.

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

THDA Great Choice programs require first-time buyer status, defined as not having owned a primary residence in the past three years. Exceptions apply in federally targeted areas, where repeat buyers may qualify. Ask your lender about specific addresses. The Housing Fund does not require first-time buyer status. USDA loans have no first-time buyer requirement. Veterans using VA loans also have no first-time restriction.

What is the FHA loan limit in Nashville (Davidson County)?

The FHA loan limit for Davidson County is $694,600 for a single-family home in 2026. Nashville's median home price of approximately $530,000 is below this limit, meaning FHA financing is available for most purchases in the city. Buyers looking in Williamson County (Franklin, Brentwood, Spring Hill) have an even higher FHA limit of $1,029,250, which accommodates the higher price points in that suburban market.

Can I use USDA loans near Nashville to avoid a down payment?

Yes. Many properties in outer Davidson County and in surrounding counties including Rutherford, Sumner, Wilson, and Robertson qualify for USDA loans, which require 0% down. The income limit is 115% of AMI, approximately $107,000 for a family of four in the Nashville MSA. USDA is not technically a DPA program but eliminates the down payment requirement entirely. Check property eligibility at usda.gov/eligibility.

What credit score do I need for Nashville DPA programs?

THDA Great Choice Plus requires a 640 minimum credit score. The Housing Fund accepts 600 and above, making it the most accessible option for buyers with lower credit. VA loans for veterans typically require 580 to 620 depending on the lender. USDA loans generally require 640. Buyers with credit scores between 600 and 639 should contact The Housing Fund directly.

Should I take the $6,000 deferred or the $15,000 THDA Great Choice Plus?

The $6,000 deferred option adds no monthly payment and is due only when you sell, refinance, or pay off the first mortgage. The $15,000 option provides $9,000 more upfront but requires approximately $138 per month for 10 years. Choose the $6,000 deferred if you are cash flow sensitive or plan to refinance within a few years. Choose the $15,000 if you need maximum cash at closing and can absorb the added monthly payment. You cannot take both. The Housing Fund's $35,000 option may eliminate the choice entirely for qualifying buyers.

What income limits apply for Nashville DPA programs?

Nashville MSA Area Median Income is approximately $93,000 for a family of four. THDA Great Choice income limits for Davidson County range from approximately $93,000 to $112,000 depending on household size (limits are higher for larger households). The Housing Fund caps at 120% AMI, approximately $111,600 for a family of four. USDA caps at 115% AMI, approximately $107,000. Exact limits vary by household size and are updated annually. Confirm with a THDA-approved lender for your specific situation.

Down Payment Assistance Nashville TN 2026 | THDA Great Choice, $35K Housing Fund, Heroes Rate

Last updated: April 2026 · Program availability changes frequently

Down Payment Assistance in Nashville: Overview

Nashville's median home price was roughly $300,000 in 2019. Today it sits above $530,000. That $230,000 price increase happened faster than most buyers could save. A buyer who had $15,000 saved in 2022 and thought they were close to ready woke up $30,000 to $50,000 short. The problem is not laziness or bad credit. The math changed. THDA and The Housing Fund exist specifically to close that gap.

Tennessee Housing Development Agency (THDA) runs the Great Choice Home Loan statewide. Attached to it is Great Choice Plus DPA: a choice between a $6,000 deferred second mortgage at 0% interest or a $15,000 amortizing second at 2% with roughly $138 per month for 10 years. Neither option covers 100% of the cash a Nashville buyer needs on a $530,000 median home. But Nashville buyers are not buying at the median. They are buying where they can afford, and these programs are designed for purchases up to $500,000.

The Housing Fund fills the gap THDA cannot. This Nashville-area CDFI provides up to $35,000 as a deferred second mortgage for buyers with 600+ credit and incomes up to 120% AMI. On a $480,000 purchase with $16,800 FHA down and $10,000 in closing costs, The Housing Fund's $35,000 covers the entire cash requirement. The buyer puts in zero. That is the program Nashville buyers with 600 to 639 credit scores should know about first.

Veterans and public servants get an additional layer: the THDA Heroes Program reduces the first mortgage rate by 0.5%. On a $450,000 loan that is $2,250 per year in savings. Stack it with Great Choice Plus DPA and you get both cash assistance and a lower rate on the same transaction. Nashville has a large veteran population tied to the Nashville VA Medical Center. Many of those buyers are using VA loans at 0% down and do not know THDA's Heroes rate reduction is also available.

Quick Answer

Yes. Nashville buyers have access to meaningful DPA through THDA and The Housing Fund, plus USDA 0%-down options in eligible surrounding areas.

THDA Great Choice Plus: $6,000 deferred (0% interest) or $15,000 at 2% (about $138/month), for first-time buyers with 640+ credit. The Housing Fund: up to $35,000 deferred, 600+ credit, 120% AMI income limit. THDA Heroes: 0.5% rate reduction for military, veterans, first responders, teachers, and healthcare workers. USDA: 0% down for eligible properties in outer Davidson County and surrounding counties.

On a $480,000 Nashville starter home: FHA at 3.5% requires $16,800 down plus $10,000 closing costs. The Housing Fund's $35,000 covers all of it. THDA's $15,000 option covers about 56% of that cash need.

Nashville's Housing Market and the Savings Gap Problem

Nashville is one of the most dramatic appreciation stories in American real estate. The metro added nearly 100 people per day for years. Healthcare, tourism, and technology employment drove income growth, but housing supply did not keep pace. The result: prices that moved faster than any savings plan could track.

$300K

Median price, 2019

$530K+

Median price, 2026

$230K

Appreciation in 7 years

The FHA down payment on a $530,000 home is $18,550. Add $12,000 to $14,000 in closing costs and a Nashville buyer needs $30,000 to $33,000 in cash before they can close. A household earning $85,000 a year and saving aggressively at 10% of income saves $8,500 per year. At that rate, it takes nearly four years to accumulate $33,000 in savings. Meanwhile prices rose $230,000 in seven years, or roughly $33,000 per year. You cannot save your way to homeownership in a market moving at that speed. DPA is not a shortcut. It is math.

Williamson County note: Many Nashville buyers look in Franklin, Brentwood, and Spring Hill in Williamson County. The FHA loan limit there is $1,029,250, compared to $694,600 in Davidson County. THDA programs apply in both counties. Buyers priced out of Davidson should know that Williamson County is still FHA-eligible at much higher price points.

How DPA Programs Work in Nashville

Deferred Second Mortgages (THDA $6K, The Housing Fund $35K)

No monthly payment. The balance sits as a silent second lien and is due when you sell, refinance, or pay off the first mortgage. 0% interest on THDA's $6,000 option means the balance never grows. The Housing Fund's terms should be verified directly at housingfundtn.org. Best for buyers who need to minimize monthly obligations and plan to stay in the home for several years.

Amortizing Second Mortgages (THDA $15K)

Adds a monthly payment. THDA's $15,000 option at 2% over 10 years runs approximately $138 per month. The balance is paid off over time rather than deferred to sale. Once the 10-year term ends, the lien is satisfied. Best for buyers who can absorb $138/month and want to maximize cash at closing. The $15,000 provides $9,000 more upfront than the $6,000 deferred option.

Rate Reductions (THDA Heroes)

Not cash assistance. The Heroes Program reduces your first mortgage interest rate by 0.5%. This saves money every month for the life of the loan. On a $450,000 mortgage, 0.5% lower rate equals approximately $187 per month or $2,250 per year in savings. Stack with Great Choice Plus DPA to receive both the cash assistance and the rate reduction on the same transaction.

USDA Zero-Down (Eligible Rural Areas)

USDA loans eliminate the down payment entirely for eligible properties. Not a DPA program but achieves the same result. Many buyers near Nashville in Rutherford, Sumner, Wilson, and Robertson counties qualify. The income limit is 115% AMI (about $107,000 for a family of four). Check property eligibility at usda.gov/eligibility before assuming a property qualifies or does not qualify. The boundary lines are specific.

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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 Nashville, Tennessee