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If you’re a homebuyer looking to purchase in Tennessee, have you checked out the Tennessee Housing Development Agency (THDA)? Created in 1973 by the state’s General Assembly, the THDA provides support and programs to homebuyers, homeowners and renters throughout the state.
THDA offers Mortgages With Heart. First Mortgages may be combined with THDA’s second mortgage, which assists with the cost of down payment and closing cost assistance for very low income, elderly, and disabled Tennesseans who are struggling to hold onto their homes or find a safe place to live.
Below we explain more about the THDA, how it can help you and how you can help others in Tennessee by working with the agency.
What is the THDA?
When it was first created in 1973, the initial goal of the THDA was to create more affordable housing units for Tennesseans who earned very low to moderate incomes.
The agency creates new housing and also promotes the rehab and preservation of existing housing. Along with administering housing programs, the THDA also helps to create financing support for veterans and first-time homebuyers.
What is a THDA Loan?
THDA offers first mortgage programs called Great Choice Home Loans and Homeownership for the Brave. THDA itself doesn’t make the loans directly, but instead purchases qualified mortgages made through private lenders. Mortgages made as part of the Great Choice Home Loan and Homeownership for the Brave programs are for 30 years and have a fixed interest rate. Homeownership for the Brave offers a reduced rate to eligible Active Duty Military/Veterans. These programs are available to people who:
- have a minimum credit score of at least 640,
- whose household income is below the annual limit, and
- have not owned a home for the past three years, although there are some exceptions to this requirement.
THDA also offers a second mortgage that is available with either of the first mortgage programs. This second offers down-payment assistance to aid in payment of down payment and/or closing costs.
- Great Choice Plus is a second mortgage that is designed to help people pay their down payment or closing costs. This is a 0% interest rate, 30-year loan with no monthly payments. It is fully forgiven at the end of the 30-year loan term.
- Great Choice Plus HHF-DPA is a second mortgage available for designated eligible zip codes in Tennessee that is designed to help people pay their down payment or closing costs. This program offers a second $15,000, 10-year loan with a 0% interest rate and no monthly payments. The balance is forgiven at 20% per year in years 6-10. This program has limited funds remaining.
If you’re interested in the down-payment assistance program, you need to participate in a homebuyer education program, either online or in-person.
How Does the THDA Mortgage With Heart Program Work?
Unlike the Great Choice and Great Choice Plus home loan programs, the Mortgage With Heart program isn’t designed for buyers or homeowners. Instead, it’s a way for the THDA to show residents and homeowners how their mortgage payments make a difference.
When people who have a Great Choice Mortgage make payments on their loans, the THDA uses a portion of those proceeds to provide support and assistance to local agencies and non-profits that benefit people in need.
For example, the THDA might provide a grant to an organization that helps people living on a low, fixed income maintain their homes or it might donate to an agency that helps people with disabilities make their homes accessible.
A THDA loan can help you, as a resident of Tennessee, make your dreams of homeownership reality. It also allows you to support your neighbors and strengthen your community. Contact the lenders at Mortgage Investors Group if you would like more information on the advantages of a THDA loan.
