Tennessee calculates property tax from appraised value, a state-set assessment ratio, assessed value, and the local tax rate. Residential and farm property are assessed at 25 percent of appraised value, and commercial or industrial property at 40 percent of that value.

The Comptroller of the Treasury's "How to Calculate Your Tax Bill" page walks through the arithmetic, and it is the reason two houses with the same appraised value can have very different bills if one is classed as commercial or sits in a city with a higher rate.

The four parts of the bill

The Comptroller lists four components. First is appraised value, which the county property assessor determines for each taxable property. That figure is the assessor's opinion of value for tax purposes. It is not automatically the price you paid last month, and it is not automatically the amount a bank's appraisal used for a loan, though a recent arm's-length sale can be useful evidence if you appeal.

Second is the assessment ratio, which state law sets by class of property: 25 percent of appraised value for residential and farm property, and 40 percent for commercial or industrial property. Classification matters. A property that is used as a home is not taxed on 100 percent of the appraised value, but a change in classification can move the ratio from 25 percent to 40 percent and raise the bill even if the appraised value does not change. If you think the classification is wrong, that issue can be raised in the same appeal process used for value.

Third is assessed value, which is the appraised value multiplied by the assessment ratio. Fourth is the tax rate, set by the county commission based on the budget for services. City taxes, if the property is inside a municipality, are a separate rate collected by the city collecting official or, in some places, by the county trustee. Rates vary with the level of services and the size of the tax base.

The Comptroller's worked example is straightforward. Assume a house with an appraised value of $400,000. The assessed value is $100,000, which is 25 percent of $400,000. If the county tax rate is $2.50 per hundred dollars of assessed value, divide $100,000 by 100, then multiply by $2.50, for a county tax of $2,500. If a city rate also applies, that calculation is done the same way with the city's rate and added to the county amount.

You can use the same steps with your own notice. Take the appraised value, confirm the classification and the 25 percent or 40 percent ratio, compute assessed value, then apply each tax rate shown on the bill. If the notice already shows assessed value, you can go straight to the rate. If a number does not match the official formula, call the assessor or the trustee and ask for a line-by-line explanation before the appeal deadline.

Why the bill can change, and how this ties to relief and appeals

Reappraisal, new construction, a land-use change, or a rate increase can all move the bill. An increase in appraised value after a county-wide reappraisal does not, by itself, prove the assessment is wrong, the State Board of Equalization has cautioned in its appeal materials. The question on appeal is whether the current appraisal and classification are correct, not simply whether the number went up.

If you qualify for property tax relief as a low-income elderly or disabled homeowner, or as a qualifying disabled veteran or surviving spouse, remember that the program is a reimbursement calculated on a statutory market-value ceiling, not a change to the assessment ratio. The 25 percent residential ratio still applies to the assessment; the relief payment is a separate process through the county trustee or city collector.

If you believe the appraised value or the classification is wrong, the usual path is an appeal to the county board of equalization, which generally begins its regular session on June 1, with county-specific exceptions. A further appeal to the State Board is due by August 1 or within 45 days after the county board's notice, whichever is later. While an appeal is pending, pay at least the undisputed portion of the tax before the delinquency date.

When you are buying a home, ask the assessor's office or the trustee for the current appraised value, classification, assessed value, and the latest county and city rates, then run the Comptroller's formula. A listing's "estimated taxes" can be stale or can omit a city rate. A licensed local real estate agent can help you collect those figures, but the official calculation is the one the Comptroller publishes.

FAQ

What assessment ratio applies to a typical Tennessee house?

Residential and farm property are assessed at 25 percent of appraised value, according to the Comptroller. Commercial or industrial property is assessed at 40 percent.

How do I compute the tax from an appraised value?

Multiply appraised value by the assessment ratio to get assessed value, divide assessed value by 100, then multiply by the tax rate per hundred dollars. Add any city tax calculated the same way.

Does the 25 percent ratio mean I pay tax on only a quarter of the value I paid for the home?

You pay the local rate on 25 percent of the assessor's appraised value for a residential or farm classification. The appraised value may differ from the purchase price, and city and county rates both may apply.

Can a classification change raise my bill without a new appraisal?

Yes. Moving from a 25 percent residential or farm ratio to a 40 percent commercial or industrial ratio increases assessed value even if appraised value stays the same.

Next step

Use the Comptroller's formula on your assessment notice or on a property you are buying, then ask a licensed local real estate agent or the county assessor to confirm the classification, the 25 percent or 40 percent ratio, and the current county and city rates.

Sources: Comptroller of the Treasury, How to Calculate Your Tax Bill; Comptroller of the Treasury, Appealing to the State Board of Equalization; Comptroller of the Treasury, Property Tax Relief.

A disputed Tennessee property assessment is generally appealed first to the county board of equalization, which typically begins its regular session on June 1. A further appeal to the State Board of Equalization is due by August 1 of the tax year, or within 45 days after the county board's action notice was sent, whichever is later.

Those steps come from the Comptroller of the Treasury's county-board and value-appeals pages, and missing the first deadline can cut off the rest of the process.

Start with the county board of equalization

County boards of equalization are authorized to hear appeals of the current-year assessments fixed by the county assessor of property. In general, an assessment must be appealed to the county board to preserve the taxpayer's right to further appeal. The Comptroller's county-board page says a board generally convenes its regular session on June 1 of each year, or the next business day if June 1 falls on a Saturday or Sunday, and remains in session as necessary for the maximum number of days allowed under Tenn. Code Ann. § 67-1-404.

Counties can do this differently. A county may have an extended session, a special session, or an alternate time set by resolution or ordinance. Shelby County, for example, meets each year on May 1, or the next business day, and meets as few as 30 days during an annual session. For the time, place, and current-year filing deadline in your county, contact the assessor's office. Do not rely on a neighboring county's calendar.

Some assessors also offer an informal review. The State Board's value-appeals page says informal review is not an appeal. If you want to preserve further rights, you still have to appeal to the county board. Use informal review if it is offered, and file the formal county appeal by the local deadline as well.

The county board is a panel of five or more persons that can hear a taxpayer's complaint and make certain changes to a disputed assessment. Notice of the board's decision is sent to the taxpayer, who may accept it or appeal. Bring what you can to the county hearing: the assessment notice, a description of the property, and, if you have them, sales of comparable homes, photos of condition problems, and a short written statement of the value you believe is correct. County evidence is not automatically in the record later, so keep copies.

If you continue to the State Board of Equalization

Appeals to the State Board of Equalization from a local board must be filed on or before August 1 of the tax year, or within 45 days of the date the local board action notice was sent, whichever is later. File through the State Board's online appeal filing service, and have your property information ready. The Tennessee Property Assessment Database is the official place the Board points to for that information. Staff will review the filing for required information, attachments, and the filing fee. The Board cannot accept filings beyond the statutory deadlines.

With limited exceptions, you must go to the county board first. Direct appeals to the State Board are allowed in narrow cases, including when the taxpayer was not duly notified of an assessment or classification change as provided in Tenn. Code Ann. § 67-5-508, when that notice was sent later than 10 days before the local board adjourned, when the taxpayer can show reasonable cause for missing the county board, when the appeal concerns a correction made or refused by the assessor, or when the local assessor has given written consent for a direct appeal of industrial and commercial classified property under § 67-5-1412(b). The State Board also does not have jurisdiction to accept an appeal after March 1 of the year after the time for appeal to the state board began to run.

A State Board appeal is first heard by an administrative judge. A notice of hearing is emailed and mailed at least 60 days before the hearing. The judge issues an Initial Decision and Order within 90 days of the hearing. That order becomes the final decision if no additional appeal is made. A party may ask the Board to review the judge's decision, but that review is discretionary. Judicial review of a final State Board action is filed in chancery court, in the county where the assessment was made or in an appropriate chancery court, within 60 days after the order becomes final.

You must show, by a preponderance of the evidence, what the correct assessment should be. The judge does not independently investigate the property. The best evidence for a residence is generally sales of comparable properties, with differences explained. While an appeal is pending, pay at least the undisputed portion of the taxes before the delinquency date, and pay any delinquent taxes for prior years, as explained in Tenn. Code Ann. § 67-5-1512(b) and on the value-appeals page.

FAQ

When does a county board of equalization usually meet?

In general, the regular session begins June 1, or the next business day. Some counties set a different date. Confirm the current-year deadline with the county assessor.

What is the deadline to appeal a county decision to the State Board?

On or before August 1 of the tax year, or within 45 days of the date the local board action notice was sent, whichever is later.

Is an informal review by the assessor enough?

No. Informal review is not an appeal. File with the county board if you want to preserve further appeal rights.

Do I still have to pay the tax while the appeal is pending?

The law requires payment of at least the undisputed portion before the delinquency date, plus any prior-year delinquent taxes, to avoid penalties, interest, and possible delay or dismissal.

Next step

Call your county assessor for the current appeal deadline and filing method, and ask a licensed local real estate agent or a property-tax professional to help you assemble comparable sales before the county board meets.

Sources: Comptroller of the Treasury, County Boards of Equalization; Comptroller of the Treasury, Appealing to the State Board of Equalization.

Tennessee's property tax relief program reimburses part of the tax on a primary residence for qualifying low-income elderly or disabled homeowners and for qualifying disabled veterans or their surviving spouses. The tax bill still has to be paid in full.

The Comptroller of the Treasury's Property Tax Relief page and the 2026 Property Tax Relief Program brochure are clear on that point: this is a reimbursement program, not a reduction that wipes the tax off the statement before it is due.

Who can apply, and what are the 2026 figures?

The program is authorized in Tenn. Code Ann. §§ 67-5-701 through 67-5-704. It is funded by appropriations. Tax collecting officials, including county trustees, take applications from owners who may qualify. Relief is limited to one primary residence.

For the 2026 program, the Comptroller's brochure sets these elderly-homeowner rules. You must be 65 on or before December 31, 2026, own the home, and use it as your primary residence. You must provide annual income from all sources. The maximum 2025 income of the applicant, spouse, co-owner, and resident remainder is $38,470. Tax relief is calculated on a maximum market value of $33,600.

Disabled homeowners have the same income and market-value ceilings. You must be disabled on or before December 31, 2026, own the home, and use it as your primary residence, and you must provide annual income from all sources. The brochure uses the same $38,470 income figure and the same $33,600 maximum market value for the calculation.

Disabled-veteran relief is structured differently. There is no income cap listed on the 2026 brochure for that category in the same way as the elderly and disabled programs. You must own the home and use it as your primary residence, and you must complete a 2026 F-16 consent form so the U.S. Department of Veterans Affairs can release disability and income information. The veteran must meet one of the disability standards in the brochure, which include specified paralysis, legal blindness, or loss of use of two or more limbs from a service-connected cause; a 100 percent permanent total disability connected with having been a prisoner of war; or service-connected permanent and total disability as determined by the VA. Tax relief for this category is calculated on a maximum market value of $175,000.

A surviving spouse of a disabled veteran may also qualify, using form F-16S, a copy of the death certificate, and personal identification. The surviving spouse must have been married to the veteran at the time of death and must not have remarried. The veteran must have met one of the disability standards, or, as the brochure also provides, relief may be extended when the veteran's death resulted from a service-connected, combat-related cause, or when a soldier's death resulted from being deployed away from any home base of training in support of combat or peace operations. The same $175,000 maximum market value applies.

Income documentation such as a tax return, 1099, or W-2 may be required. If you are a sole owner within $100 of the income limit, or if there is a co-owner and combined income is within $200 of the limit, income documentation must be provided for all sources, the brochure says.

How and when do you apply?

Contact your county trustee to apply. If the property is inside city limits, you may also contact the city collecting official. You may apply when you receive your 2026 property tax bill or bills. The deadline to apply is 35 days after the delinquency date, and taxes must also be paid by that date. Missing the payment can put the reimbursement at risk even if you otherwise qualify.

Check application status at tncot.cc/taxrelief, using the application status search link at the bottom of the page. For questions, call the county trustee, the city collecting official, or the property tax relief office at 615-747-8871, or use the Comptroller's tax-relief website. The Property Tax Relief office is in the Cordell Hull Building in Nashville.

Because this is a reimbursement, budget for the full bill when it arrives. The state payment comes after the application is processed, and it is calculated only on the market-value ceiling that applies to your category, not necessarily on the home's full appraised value. If the home is worth more than $33,600 (or $175,000 for a qualifying disabled-veteran or surviving-spouse claim), relief is still computed only up to that cap.

If you are buying a home and hope to use this program, confirm occupancy, ownership, age or disability, and income with the trustee's office before you treat the reimbursement as part of your monthly housing budget. A licensed local real estate agent can help you ask the right office, but eligibility is determined through the tax-relief application, not at the closing table.

FAQ

Is Tennessee property tax relief an exemption that lowers the bill in advance?

No. It is a reimbursement program. You still pay the tax, then apply through the county trustee or city collector for the portion the program covers.

What income and value limits apply in 2026 for elderly or disabled homeowners?

The 2026 brochure lists a maximum 2025 income of $38,470 for the applicant, spouse, co-owner, and resident remainder, and a maximum market value of $33,600 on which tax relief is calculated.

When is the application due?

You may apply when you receive the 2026 tax bill. The deadline is 35 days after the delinquency date, and the taxes must be paid by that date as well.

How is disabled-veteran relief different?

Qualifying disabled veterans and certain surviving spouses use VA consent forms, must meet the disability or death standards in the brochure, and have relief calculated on a higher maximum market value of $175,000.

Next step

When the tax bill arrives, pay it by the deadline, then apply for reimbursement with the county trustee or city collector, and ask a licensed local agent or the tax-relief office if you need help matching the 2026 income and value limits to your situation.

Sources: Comptroller of the Treasury, Property Tax Relief; Comptroller of the Treasury, 2026 Property Tax Relief Program brochure.

Tennessee collects a realty transfer tax of $0.37 per $100 of the purchase price and a mortgage tax of $0.115 per $100 of indebtedness, with the first $2,000 of the debt exempt, when the documents are recorded. The rates are published by the Tennessee Department of Revenue on its recordation tax due-date and tax-rate page.

Who actually writes the check is often set in the purchase contract, so it is worth confirming before you treat either tax as the other party's automatic cost.

How the two taxes are calculated

The realty transfer tax applies when a deed or other instrument transferring an interest in realty is recorded. The Department of Revenue states the rate as $0.37 per $100 of the purchase price for the realty transfer. On a $400,000 sale, that is 4,000 times $0.37, or $1,480, if the taxable base is the $400,000 purchase price. If your closing statement uses a different base, ask the closing attorney or register of deeds which figure the Department requires and why.

The mortgage tax, sometimes called the indebtedness or deed-of-trust recordation tax, is $0.115 per $100 of indebtedness. The first $2,000 of the debt is exempt from taxation. On a $320,000 loan, the taxable indebtedness is $318,000, which is 3,180 times $0.115, or $365.70. Refinances, assumptions, and further advances can raise their own recordation questions. Do not assume a refinance is tax-free. Ask the closing attorney or the register of deeds how the mortgage tax applies to the new instrument.

These are state taxes collected in connection with local recording. The Department's due-date page also notes that recordation taxes are filed monthly on the 15th day of the month following the period covered by the return. That filing schedule is for the officials who remit the tax, not a deadline you use to time a closing. Your practical deadline is the recording of the deed and, if you are borrowing, the deed of trust.

Local offices may also collect recording fees, copy fees, and, in some places, other local charges that are separate from these two state rates. A closing disclosure or settlement statement should list the realty transfer tax, the mortgage tax, and the register's fees on separate lines. If they are combined, ask for a breakdown.

Who pays, and what to watch at closing

The Department of Revenue's rate page states the rates. It does not, on that page, assign the realty transfer tax or the mortgage tax to the buyer or the seller as a matter of law. In practice, responsibility is often allocated in the purchase and sale agreement, in a local custom that the parties are free to change, or in lender instructions for the mortgage tax. Read the contract. If the form is silent, negotiate the allocation in writing before you go to closing.

A few points come up often:

• A "seller pays closing costs" clause may or may not include the realty transfer tax. Name the tax if you intend someone else to pay it.
• The mortgage tax is tied to the loan. A cash buyer does not incur that tax on a deed of trust that is never recorded, but a buyer who finances will see it unless an exemption applies.
• If the consideration stated on the deed is lower than the actual purchase price, do not invent a lower tax base. The closing attorney and the register of deeds work from the figures the law requires.
• A gift, a transfer between spouses, a transfer into a trust, or a foreclosure-related deed can have a different tax result. Those are fact-specific. Get an answer from the closing attorney or the Department, not from a rule of thumb.

Ask the closing attorney or title company for a draft settlement statement several days before closing, and check the recordation-tax lines against the contract and against the Department's published rates. If a number looks wrong, it is easier to fix before the deed is recorded than after.

Counties record documents through the register of deeds. The Department of Revenue administers the tax. If you need a written confirmation of the current rate, use the Department's due-date and tax-rate page, and ask the register or the closing attorney how that rate applies to your instrument.

FAQ

What is Tennessee's realty transfer tax rate?

The Department of Revenue publishes a realty transfer tax of $0.37 per $100 of the purchase price for the realty transfer.

What is the mortgage recordation tax?

The mortgage tax is $0.115 per $100 of indebtedness, and the first $2,000 of the debt is exempt, according to the same Department of Revenue page.

Who pays these taxes, the buyer or the seller?

The official rate page states the rates, not a mandatory allocation. Responsibility is often set in the purchase contract or by agreement at closing. Confirm it in writing.

Are recording fees the same as recordation taxes?

No. Recording fees are charged by the office that records the documents. The realty transfer tax and the mortgage tax are separate state taxes calculated at the published rates.

Next step

Ask your closing attorney or a licensed local real estate agent to show the realty transfer tax and the mortgage tax on a draft settlement statement, using the Department of Revenue's $0.37 and $0.115 rates, and to confirm who is paying each item under your contract.

Sources: Tennessee Department of Revenue, Recordation Taxes Due Date and Tax Rates.

In a covered Tennessee residential sale, the owner must furnish a property disclosure statement or a purchaser-waived disclaimer before the purchase contract is accepted. Failure to provide that form does not, by itself, give the buyer a right to cancel the contract.

The rules are in Tenn. Code Ann. §§ 66-5-201 through 66-5-208, and they differ from states that give a short rescission window after delivery.

What has to be delivered, and when?

Tenn. Code Ann. § 66-5-201 applies to transfers by sale, exchange, installment land sales contract, or lease with option to buy of residential real property with one to four dwelling units, including site-built and nonsite-built homes. It applies whether or not a licensed broker or salesperson is involved. The disclosure statement is not a warranty, and it is not a substitute for inspections by the purchaser or by a professional home inspector. The disclosure is for the potential buyers in that transfer and may not be relied on by purchasers in later transfers from the original buyer.

Under § 66-5-202, the owner must furnish one of two documents. The first is a residential property disclosure statement, in the form provided in the statute, about the condition of the property, including any material defects known to the owner. The form has to include all items listed in the statutory form, a notice that the parties may wish to obtain professional advice or inspections, and a notice that the information is the owner's representation, not the licensee's. The owner is not required to undertake an independent investigation or inspection in order to make the disclosures.

The second option is a residential property disclaimer statement. It states that the owner makes no representations or warranties as to the condition of the property or its improvements, and that the purchaser will receive the property "as is," with all defects that may exist, except as otherwise provided in the purchase contract. A disclaimer is permitted only where the purchaser waives the required disclosure. If the purchaser does not waive it, the disclosure statement must be provided.

Timing is strict and early. Section 66-5-203 says the owner shall deliver the written disclosure or disclaimer, if agreed upon by the purchaser, before acceptance of a real estate purchase contract. "Acceptance" means full execution of the contract by all parties. The statement may be included in the contract, in an addendum, or in a separate document. Delivery after everyone has already signed is late under this statute.

What if the statement is missing, incomplete, or wrong?

Failure to provide the disclosure or disclaimer does not permit a purchaser to terminate the purchase contract, § 66-5-203(b) says. The purchaser is not restricted from bringing other actions at law or in equity that are otherwise permitted. Section 66-5-208(b) adds that no cause of action may be instituted against an owner solely for failure to provide the statement, but the owner can still face other claims for misrepresentation or for failure to disclose material facts.

If the owner does provide a disclosure statement and it contains a misrepresentation, the purchaser's remedies under § 66-5-208(a) are:

• An action for actual damages suffered because of defects that existed as of the date the contract was executed, that the purchaser was not aware of at the earlier of closing or occupancy (or occupancy, in a lease with option to purchase). That action must be commenced within one year from the date the purchaser received the disclosure statement or the date of closing or occupancy, whichever occurs first.
• Termination of the contract prior to closing, subject to § 66-5-204, in the event of a misrepresentation in the statement.
• Other remedies at law or equity that are available against an owner for intentional or willful misrepresentation of the condition of the property.

A disclaimer or an "as is" clause does not give a seller a free pass to hide a known defect in an intentional way. The statute preserves claims for misrepresentation and for failure to disclose material facts. Buyers still benefit from a home inspection, a termite or wood-destroying-insect report, and, where relevant, a flood-zone or sewer review, because the disclosure is not a warranty.

Real estate licensees also have separate disclosure duties under other sections of Tennessee law. Section 66-5-208 limits certain claims against a licensee for information in expert reports the licensee did not sign, but it does not excuse the disclosures required by §§ 62-13-403, 62-13-405, or 66-5-206.

If you are selling, complete the statutory form carefully, deliver it before anyone treats the contract as fully executed, and update the buyer in writing if you learn of a material change. If you are buying, do not treat a missing form as an automatic exit right, and do not skip inspections because a disclaimer was signed.

FAQ

When must the Tennessee disclosure or disclaimer be delivered?

Before acceptance of the real estate purchase contract, which the statute defines as full execution by all parties. It may be in the contract, in an addendum, or in a separate document.

Can a buyer cancel solely because the seller never provided the form?

No. Section 66-5-203 says failure to provide the statement does not permit the purchaser to terminate the contract, though other actions at law or in equity may still be available.

Is an "as is" disclaimer always allowed?

Only if the purchaser waives the required disclosure. If the purchaser does not waive it, the disclosure statement must be provided.

How long does a buyer have to sue for a misrepresentation on the disclosure?

An action for actual damages under § 66-5-208(a)(1) must be commenced within one year from the date the purchaser received the disclosure statement or the date of closing or occupancy, whichever occurs first.

Next step

Ask a licensed local real estate agent or a Tennessee real estate attorney to review the disclosure or disclaimer, the delivery date relative to contract acceptance, and any inspection objections before you finalize the contract or close.

Sources: Tenn. Code Ann. § 66-5-201; Tenn. Code Ann. § 66-5-202; Tenn. Code Ann. § 66-5-203; Tenn. Code Ann. § 66-5-208.

If you qualify for a Tennessee Housing Development Agency (THDA) Great Choice home loan, you can also apply for Great Choice Plus down payment assistance as a second mortgage loan to help with your down payment or closing costs on the home.

THDA's Down Payment Assistance page describes a deferred option of up to $6,000 or up to $10,000, and an amortizing option of up to 5 percent of the sales price with a maximum of $15,000. Newly built or proposed construction has a separate amortizing option of up to $25,000. The assistance can be used for down payment, closing costs, or both, but it rides on top of a qualifying Great Choice first mortgage.

Who can use a Great Choice loan?

THDA created Great Choice to make homeownership available for Tennesseans of middle and moderate income. The first mortgage is a 30-year, fixed-rate loan. Everyone on the loan application must have a credit score of at least 640. Household income and purchase-price limits vary by county; THDA publishes a chart of those limits and updates it, so use the current chart rather than a figure from memory.

Generally, THDA mortgages are made to first-time homebuyers. THDA defines a first-time homebuyer as anyone who has not occupied a home they owned as their principal residence during the past three years, and all borrowers obligated on the loan must meet that test. The first-time requirement is waived when the property is in a county, or in a census tract within a county, designated as a targeted area. Repeat buyers can also participate if they are buying in one of 43 targeted counties, buying in a designated area in 15 additional counties, or they are qualified military members or spouses, according to THDA's Great Choice page.

The home has to be the borrower's principal residence. A property can have up to four units if the borrower occupies one unit. Rental income from the other units counts toward the household income limit. THDA mortgages cannot be used for an investment property, a second home, or a property used to operate a business. Off-site manufactured housing can be eligible. Most Great Choice loans are insured by FHA or USDA-RD, and a conventional Freddie Mac HFA Advantage product is also described. With FHA, THDA notes you may be able to borrow up to 96.5 percent of the price, which means a 3.5 percent down payment, and Great Choice Plus can be used for loan-related costs including that down payment and closing costs.

Homebuyer education or counseling is required on all Great Choice, Great Choice Plus, and Homeownership for Heroes loans. Start with a THDA-approved counselor. Homeownership for Heroes offers a reduced interest rate and, for qualified military members and veterans, a waiver of the first-time requirement in all areas of Tennessee, along with high loan-to-value options on VA, USDA-RD, or FHA loans. Eligible occupations listed by THDA also include EMTs and paramedics, firefighters, K-12 teachers and principals in Tennessee public or private schools, state and local law enforcement officers, and state and local public safety emergency dispatchers, on FHA, USDA, and VA loans.

How the second-loan options work

THDA lists three Great Choice Plus structures. Read the current page and your lender's loan estimate, because the amounts are caps, not a guarantee.

• Deferred option (no payments): assistance of up to $6,000 or up to $10,000 as a forgivable second mortgage, at a 0 percent interest rate. The loan is forgiven at the end of a 10-year term. If the home is sold or refinanced before that term ends, the loan is due in full.
• Amortizing option (payment): assistance of up to 5 percent of the sales price, with a maximum of $15,000, as a second mortgage with a 30-year term. The interest rate is the same as the first mortgage.
• Amortizing option for newly built or proposed construction: assistance of up to $25,000 as a second mortgage with a 15-year term and a 0 percent interest rate on the second mortgage.

You have to keep complying with the terms of both the Great Choice first loan and the Great Choice Plus second loan, or penalties may apply, including immediate repayment. All THDA mortgages are also subject to federal recapture provisions if the home is sold within the first nine years. Ask the approved lender to explain recapture in writing before you close.

Work with a THDA-approved lender and, if you want one, a THDA-trained real estate agent. General information is available at 800-228-THDA. Income, credit, purchase-price, and first-time or targeted-area status are all reviewed on the file you actually submit, not on a website summary.

FAQ

Do I have to be a first-time buyer to use Great Choice or Great Choice Plus?

Generally yes. THDA defines a first-time buyer as someone who has not occupied a home they owned as a principal residence in the past three years. The requirement is waived in targeted areas, and some repeat buyers and military borrowers can participate under the rules THDA publishes.

How much down payment assistance is available?

The deferred option is up to $6,000 or up to $10,000 and may be forgiven after 10 years. The standard amortizing option is up to 5 percent of the sales price, capped at $15,000. Newly built or proposed construction may qualify for up to $25,000 on a 15-year, 0 percent second loan.

Is homebuyer education required?

Yes. THDA requires homebuyer education or counseling on all Great Choice, Great Choice Plus, and Homeownership for Heroes loans.

What credit score do I need?

The credit score of everyone on the loan application must be at least 640, according to THDA.

Next step

Talk with a THDA-approved lender and a licensed local real estate agent about current county income and price limits, the 640 credit-score floor, and which Great Choice Plus second-loan option fits the home you want to buy.

Sources: Tennessee Housing Development Agency, Down Payment Assistance; Tennessee Housing Development Agency, Great Choice Home Loan; Tennessee Housing Development Agency, Eligibility Requirements and Conditions.