THDA Loans Tri-Cities TN | Down Payment Help

First-time buyers in Johnson City, Kingsport, Bristol, and Jonesboro often have income and credit that work – and not enough cash after earnest money, inspections, and a moving truck. THDA (Tennessee Housing Development Agency) is the state path that can put down-payment and closing-cost help on a first mortgage. It is not automatic, it has income and purchase-price limits, and it has to be structured on the same day as the loan product, not after you are under contract with a “we will figure it out” note.

I am Tim Arrowood with The Arrowood Team at Preferred Rate (NMLS#393468). We run THDA next to a plain FHA or conventional file so you can see cash to close, monthly payment, and whether the assistance is a true fit. This is educational. Limits and product names change. Start at arrowoodteam.com.

What THDA is actually doing on the file

THDA pairs a first mortgage (often with a specific rate sheet) with down-payment assistance that may be a second lien, a grant-style credit, or a forgivable/repayable structure depending on the program in force when you lock. The first question is not “do I get free money.” It is “does the payment plus the second-lien rules still work if I sell in four years, and do I meet income and price caps for this county.”

Washington, Sullivan, Carter, and Unicoi counties sit in one market. Jonesboro sits across the line in a different assistance conversation. If you are touring both sides of the state line, say so before we pick a program.

First-time, income, and purchase-price screens

Most THDA first-time paths want you to be a first-time buyer under the program definition (often no ownership in the last three years, with veteran and targeted-area exceptions). Income is household income, not just the borrower on the note. A roommate who is not on the loan can still count if they will live in the house – ask before you hide a household member.

Purchase-price limits are real in the Tri-Cities. A renovated house near ETSU or a Kingsport move-up can blow the cap even when the payment looks fine. We check the cap on the MLS print before you write. Closing costs in Tennessee also include prepaid taxes and insurance; a “zero down” headline that ignores those line items is how first-time buyers show up $4,000 short at the title company.

THDA vs a smaller conventional down payment

A 3% conventional or a standard FHA 3.5% down file with a gift from family can beat THDA if the THDA rate or second-lien payment is heavier. THDA wins when you have almost no cash, you clear the income cap, and you will occupy the house as a primary residence long enough for the assistance rules to make sense.

Run cash to close with and without THDA, including prepaid taxes and insurance in Tennessee.
Run the payment including any second-lien or assistance repayment.
Run the exit. If you might sell or refinance in 24 months, read the recapture or repayment language before you celebrate.

Neighborhood notes

Johnson City / ETSU area. First-time files and modest bungalows. Price caps and older-house condition (roof, HVAC) show up on FHA appraisals.
Kingsport and Bristol. Mix of first-time and veteran households. If VA residual income already works with a small down payment, VA may beat THDA. We run both.
Jonesboro. Tennessee THDA does not follow you across the state line. If the house is in Arkansas, we use a different assistance map.

What to bring to the first call

Last two pay stubs, W-2s, and last year’s tax return if you have it.
Household size and who will live in the house.
A target price and two MLS numbers if you are already touring.
Gift letters if anyone is helping with earnest money.

We will tell you the same day whether THDA is the path or whether a straight FHA/conventional/VA file is cheaper. If you are already writing offers on a weekend, send the MLS number Saturday morning. A price-cap miss is cheaper to find before earnest money is at risk than after a seller has taken the house off the market.

Credit is the other silent killer on first-time files. THDA and FHA both have minimums, and a collection that is easy to explain on a VA residual-income file can still stall an assistance lock. Bring the credit report you already pulled if you have one. If you do not, we will pull a mortgage credit and tell you whether to wait 30 days or write now.

How The Arrowood Team sequences it

Income and first-time screen against current THDA limits.
Product comparison: THDA vs FHA vs conventional vs VA if you are eligible.
Written cash-to-close so you do not write an offer on a hope.
Contract language that gives us time to lock the assistance, not a three-day close.

Start at arrowoodteam.com. Subject line “THDA” plus Johnson City, Kingsport, Bristol, or Jonesboro. If you already have a realtor, copy them on the first email so the contract timeline matches the assistance lock, not a three-day close a listing agent assumed from a cash buyer down the street.

Frequently asked questions

Is THDA only for first-time buyers?

The common paths are first-time or first-time-equivalent. Veterans and some targeted areas can have exceptions. Ask with your specific history; do not assume a prior short sale blocks you forever or that a prior ownership is always fatal.

Can I stack THDA with a gift?

Sometimes. Gift rules and assistance rules both have to clear. Tell us about the gift on day one so we do not build a file that breaks in underwriting.

Does THDA work on new construction?

Some assistance paths allow new construction; timelines and builder overlays get tighter. If you are building, say so. That may be a VA OTC conversation instead.

What if I am over the income limit by a little?

Then we do not force THDA. We price FHA, conventional, or VA on the real income. Stretching a household-income story is how files die.

How do I start?

Go to arrowoodteam.com and ask for a THDA vs conventional cash-to-close comparison for your city.

Tim Arrowood – The Arrowood Team – Preferred Rate – Johnson City / Tri-Cities, TN – NMLS#393468 – https://arrowoodteam.com

Educational information for Tennessee borrowers. Not a commitment to lend or a guarantee of THDA funds. Income limits, purchase-price caps, and assistance structures change. Tim Arrowood, NMLS#393468. Preferred Rate, partnered with American Pacific Mortgage, NMLS #1850. Equal Housing Opportunity.

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