First-Time Homebuyer Loan Programs in Tennessee

Buying your first home can feel like a huge step, but the good news is there are loan programs designed specifically to make it easier to get started. In Tennessee, first-time buyers may have more flexibility than they realize, including some that can get you into a home with little or even no money down.

THDA Down Payment Assistance (Zero Down)

The Tennessee Housing Development Agency (THDA) offers a down payment assistance program that can be combined with a standard mortgage. It’s designed to help qualified first-time buyers purchase a home with zero down payment. You will need to go through a THDA-approved lender to utilize their programs.

Here’s how it works: you receive a second loan from THDA to cover your required down payment and, in many cases, part of your closing costs. That means you can become a homeowner without needing thousands saved upfront.

Every lender who receives your information through Home Loan Locals is approved to offer THDA loans, so you’ll be connected with someone who can walk you through the income limits, credit requirements, and property eligibility.

Other 3% Down Conventional Options

If your income or purchase price exceeds THDA’s limits, there are also Conventional first-time buyer programs that allow as little as 3% down. These are great options for buyers with solid credit who may not qualify for THDA assistance but still want to keep cash reserves for moving expenses or home updates.

These programs often come with reduced mortgage insurance and more flexible guidelines than standard Conventional loans, making them an attractive middle ground.

When a Standard Conventional Loan Makes More Sense

If you already have a larger down payment (say, 20% or more) and strong credit, a standard Conventional loan will usually offer the best long-term value. You’ll avoid mortgage insurance altogether and benefit from the lowest available rates.

In short, THDA is ideal for buyers who need help with their down payment, 3% down Conventional programs are great for those who earn a little more but still want flexibility, and a standard Conventional loan fits best for those with more savings and stronger credit.

The Bottom Line

There’s no one-size-fits-all loan program for first-time buyers—but the right local guidance makes it easy to find what fits you best.

Visit HomeLoanLocals.com to connect with one or two trusted Tennessee lenders who offer all of these options. It’s free, it’s local, and unlike the big national sites, your info won’t be sold to a dozen companies. You’ll get clear answers, real options, and no spam.