Are you renting in Johnson City and wondering how to pull together a down payment? You are not alone. Many first-time buyers in Washington County use state programs to take that last step into homeownership. This guide explains how Tennessee’s THDA down payment assistance works locally, what to expect from the lender process, and how to decide if it fits your budget. Let’s dive in.
THDA basics in Johnson City
What THDA offers
The Tennessee Housing Development Agency helps eligible buyers make homeownership more affordable. Support commonly includes help with down payment and closing costs delivered through THDA-approved lenders, not directly to buyers. THDA also offers a Mortgage Credit Certificate that can reduce your federal tax liability for added monthly relief. You can learn more about programs on the THDA homeownership programs page.
How assistance is structured
THDA assistance is often set up as a second lien that is deferred or low interest, or as a forgivable form of assistance. Exact amounts, interest, and forgiveness schedules change over time. Your participating lender will confirm the current terms for Washington County and which options fit your situation.
Eligibility at a glance
First-time buyer status
Many THDA programs are designed for first-time buyers, often defined as not owning a home in the last three years. Some exceptions may apply in targeted situations. Your lender will verify how the rule applies to you.
Income and purchase limits
Eligibility depends on household income and the home’s purchase price. These limits vary by county and program. Make sure you are looking at Washington County figures on the THDA site, and compare your income using HUD’s official tool for income limits by county.
Property type and occupancy
Eligible homes typically include single-family houses, many townhomes, and some condos. Manufactured homes and investment properties may be excluded or have added rules. You must plan to live in the home as your primary residence.
Credit, underwriting, and documentation
Minimum credit scores and debt-to-income guidelines are set by your lender and the loan type you choose. THDA may also set program minimums. Expect to provide proof of income, assets, ID, and any required homebuyer education certificates.
How the lender process works
Step-by-step timeline
- Preapproval. Meet with a THDA participating lender to review your credit, income, and program eligibility. Ask about Washington County limits and which THDA options you qualify for.
- Program selection. Your lender pairs you with a THDA first-mortgage product and the matching assistance option if you qualify.
- Fund reservation. Some programs require a reservation or submission so funds are set aside for you. Your lender handles this paperwork with THDA.
- Home search and contract. You shop for homes that meet THDA and lender guidelines and sign a contract subject to financing.
- Processing and underwriting. The lender processes your first mortgage and the assistance together. They confirm property eligibility, limits, and any education requirement.
- Closing. THDA assistance is disbursed per program rules at closing and recorded if it is a second lien.
Timing and what to prepare
Using assistance often adds a few days to the timeline because of extra steps and documentation. Start early and keep documents handy.
Documents usually requested:
- Pay stubs, W‑2s, and tax returns
- Recent bank statements and asset documentation
- Photo ID and Social Security number
- Signed purchase contract and property details
- Proof you meet first-time buyer rules if required
- Homebuyer education certificate if required
Pairing THDA with loan types
Conventional loans
Conventional loans often pair well with state assistance. The help typically sits as a second lien. Your lender will explain how this affects your combined loan-to-value and future private mortgage insurance decisions.
FHA loans
Many buyers use THDA assistance with an FHA-insured first mortgage. FHA has rules about where your down payment can come from and how second liens are treated. Your lender will confirm any minimum borrower contribution and seller-paid closing cost limits.
VA loans
VA financing offers zero down for eligible service members and veterans. In some cases, assistance can be layered with VA if the rules align. Your lender will ensure the subordinate lien fits VA home loan guidelines.
USDA loans
USDA loans offer 100 percent financing in eligible rural areas. Some assistance options may be allowed with USDA if both sets of rules permit it. Learn about program basics on the USDA Single-Family Housing programs page, and ask your lender to check address eligibility near Washington County.
Mortgage Credit Certificate
THDA’s Mortgage Credit Certificate can reduce your federal income tax liability, which may improve your monthly budget. The MCC is handled through participating lenders and can sometimes be combined with assistance. Explore MCC information on the THDA site and consider talking with a tax professional about how a credit could affect you.
Local insights for Washington County buyers
Market fit and price caps
THDA limits are set by county. In some higher-priced neighborhoods, the property price may exceed the program cap, which would make that home ineligible for assistance. In other parts of Washington County and the broader Tri-Cities area, the caps may align better. Confirm Washington County limits on the THDA site before you shop.
Education and support
THDA may require homebuyer education for certain programs. Completing it early can prevent delays. The Consumer Financial Protection Bureau’s homebuying resources are also helpful for preparing your budget and paperwork.
Next steps checklist
- Review eligibility. Gather pay stubs, tax documents, bank statements, and ID.
- Contact participating lenders. Ask specifically about THDA assistance for Washington County and request a preapproval letter.
- Confirm limits. Check Washington County income and purchase price limits on the THDA site.
- Choose a loan type. Discuss conventional, FHA, VA, or USDA and how each pairs with assistance.
- Complete any required education. Finish homebuyer counseling if needed.
- Ask about timing. Confirm how your lender reserves funds and the expected closing timeline.
- Write strong offers. Once preapproved, target homes that fit THDA rules and your budget.
Simple worksheet you can use
- Household size:
- Annual gross household income:
- Current savings for down payment and closing costs:
- Estimated credit score range:
Home target and numbers:
- Target purchase price:
- Minimum down payment required by loan type:
- Estimated total closing costs:
- Gap = Purchase price × required down payment − current savings
- Estimated assistance needed:
Questions for your lender:
- Which THDA assistance options do I qualify for in Washington County?
- What are the terms of assistance today, including any repayment or forgiveness rules?
- Can I use assistance with my preferred loan type?
- Is an MCC available and would I qualify?
- Will assistance affect PMI or a future refinance?
Documents to keep ready:
- Last 30 days of pay stubs and the past 2 years of W‑2s or tax returns
- 2 to 3 months of statements for all accounts
- Photo ID and Social Security numbers
- Records of other assets, debts, and rent history
Avoid common mistakes
- Skipping preapproval. Assistance often requires extra steps, so a detailed preapproval saves time and stress.
- Ignoring county limits. Always use Washington County numbers when shopping in Johnson City.
- Waiting on education. If your program requires counseling, complete it early to avoid closing delays.
- Not comparing lenders. Experience with THDA can vary. Talking to more than one participating lender can help you secure smoother processing.
You do not have to figure this out alone. If you want a guided, local plan for pairing THDA assistance with a smart home search in Johnson City, reach out. Kristi Bailey is a long-time Tri-Cities real estate professional who will walk with you through each step, from preapproval through closing, so you can move forward with clarity and confidence.
FAQs
What is THDA down payment assistance in Tennessee?
- THDA helps eligible buyers with down payment and closing costs through approved lenders, often as a second lien or forgivable assistance, plus options like a Mortgage Credit Certificate.
How do I qualify for THDA in Washington County?
- You must meet program rules for first-time buyer status, income and purchase price limits, property type, and occupancy, with Washington County figures verified on the THDA site.
Does THDA assistance affect my mortgage rate or PMI?
- Assistance itself does not usually set your rate, but a second lien can affect combined loan-to-value and PMI rules; your lender will explain how it applies to your loan.
Can I use THDA with FHA, VA, or USDA loans?
- Many buyers pair THDA with conventional or FHA, and some can layer it with VA or USDA if program rules allow; your participating lender will confirm the combination.
How long does a THDA-assisted closing take?
- Expect a little extra time for fund reservations and documentation beyond a standard mortgage, so start early and ask your lender for a clear timeline.
Where can I find official program details?
- Visit THDA’s website for current programs and limits, check HUD income limits, and review USDA and VA resources if you plan to use those loan types.
