THDA New Start Loan Program

What is THDA New Start Loan Program?

THDA New Start Loan Program is a first mortgage for homebuyers in Statewide, Tennessee.

• The THDA New Start Loan Program provides below-market-rate conventional mortgages for the purchase of newly constructed single-family homes (including manufactured homes on permanent foundations) built by THDA-approved nonprofit Program Partners. It is not available through conventional lenders - only Habitat for Humanity affiliates and qualifying Tennessee nonprofits with at least a 2-year track record may participate. The Program Partner originates, funds, and delivers the loan to THDA, which then purchases and services it. Two rate tiers exist based on borrower income: Tier I (0% fixed rate) and Tier II (3% fixed rate). Maximum loan amount is $200,000 in all counties; maximum LTV is 75%. Homebuyer education includes 6 hours pre-purchase plus 4 hours post-purchase. The loan is assumable and carries no prepayment penalty. Origination fee limited to 1%.
• Tier I: 0% fixed interest rate for qualifying lower-income households.
• Tier II: 3% fixed interest rate for moderate-income households.
• 30-year conventional mortgage.
• Maximum loan amount $200,000 (all counties).
• Maximum LTV 75% of appraised value or sales price.
• New construction single-family only (including manufactured on permanent foundation).
• Originated by THDA-approved nonprofit Program Partners.
• No prepayment penalty.
• Assumable loan.
• Funding comes from State - THDA.

How much assistance does it provide?

THDA New Start Loan Program offers up to $200,000 in assistance.

• Award tiers: Tier I: 0% fixed rate (borrowers at or below Tier I income limits) and Tier II: 3% fixed rate (borrowers above Tier I but below Tier II income ceiling). Tier I limits override Tier II. Sample Tier I limits (1-2 person / 3+): Nashville-area counties $68,880 / $74,620; baseline counties $55,380 / $59,995. Sample Tier II limit (all sizes): Nashville-area $80,360; baseline $64,610. Full table in THDA New Start Program Guide, January 2026.
• Buyer contribution: Closing costs may come from applicant, seller, or gift.
• Amounts are the program's published maximums, not an offer — the administering agency determines any individual award.

Do you have to pay it back?

THDA New Start Loan Program is a first mortgage and is repaid under the terms set by the administering agency.

• The assistance is recorded in First position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

THDA New Start Loan Program is open to buyers who will live in the home as their primary residence.

What are the income limits?

THDA New Start Loan Program limits household income to $80,360.

• The limit applies to total household income, not only the borrower’s.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

THDA New Start Loan Program caps the purchase price at $200,000.

• Eligible property types include Single Family and Manufactured.
• New construction is eligible.
• Manufactured homes are eligible.

Where does it apply?

THDA New Start Loan Program serves buyers purchasing in Statewide, Tennessee.

How do you apply?

Applications for THDA New Start Loan Program go through the administering agency, which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through 6 hours face-to-face pre-purchase homebuyer education + 4 hours post-purchase education required.

2. 2

   Contact the administering agency to reserve funds

   Funds are reserved through THDA (Program Partner origination and delivery), and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.