The Tennessee housing-finance ecosystem
Tennessee's housing pipeline draws on a mix of state agencies, federal pass-through programs, and local frameworks. Programs span the full spectrum: low-income rental, supportive housing for special-needs populations, workforce / missing-middle housing, homelessness prevention, first-time homebuyer assistance, mixed-use redevelopment, and disaster recovery. Below is a directory of every currently-active state-level and major-local program, organized by administering agency.
Tennessee Housing Development Agency (THDA)
THDA is Tennessee's state housing finance agency, allocating federal LIHTC, issuing multifamily and single-family bonds, and administering federal HOME, NHTF, ESG, HOPWA, and the Tennessee Housing Trust Fund. THDA operates a robust statewide first-mortgage homebuyer program serving rural and urban Tennessee.
Federal 9% LIHTC
Competitive · RentalTHDA allocates Tennessee's federal 9% LIHTC ceiling — approximately $24.1 million in 2026 following OBBBA's 12% increase. Annual competitive QAP process.
4% LIHTC + Multifamily Bonds
Non-competitive · BondsNon-competitive 4% LIHTC paired with THDA-issued multifamily revenue bonds.
Tennessee Housing Trust Fund
State capital subsidyTennessee's state-funded housing trust fund administered by THDA. Supports affordable rental and homeownership development, supportive housing, and homelessness prevention.
HOME Investment Partnerships
Federal pass-throughTHDA administers Tennessee's HOME allocation, primarily for multifamily rental development paired with LIHTC.
National Housing Trust Fund (NHTF)
Federal pass-through · ELITHDA administers Tennessee's NHTF allocation for housing serving extremely-low-income households.
Section 811 Project Rental Assistance
Operating subsidy · DisabilityTHDA administers Tennessee's HUD Section 811 PRA allocation for extremely-low-income persons with disabilities.
CDBG (state-administered)
Federal pass-through · Non-entitlementTHDA administers federal CDBG for non-entitlement Tennessee communities.
Emergency Solutions Grant (ESG)
Federal · HomelessnessTHDA administers Tennessee's federal ESG allocation for emergency shelter, rapid rehousing, and homelessness prevention.
HOPWA Administration
HIV/AIDS housingTHDA administers Tennessee's HOPWA funds for housing and supportive services for households living with HIV/AIDS.
Great Choice Home Loan
Homeownership · Below-market mortgageTHDA's flagship single-family first-mortgage product offering below-market rates through participating lenders. Combinable with THDA DPA programs.
Great Choice Plus DPA
Homeownership · DPATHDA's down-payment assistance program providing up to $6,000 in zero-interest, forgivable second-mortgage assistance combinable with Great Choice Home Loan.
THDA Mortgage Credit Certificate
Homeownership · Federal tax creditFederal income-tax credit for eligible first-time buyers equal to a percentage of mortgage interest paid annually.
Tennessee Hardest Hit Fund
Foreclosure prevention · LegacyOriginally Treasury-funded foreclosure prevention program; continues with state-level resources providing mortgage assistance, lien extinguishment, and reinstatement assistance for at-risk homeowners.
Tennessee Home Repair Loan Program
Homeownership · RehabBelow-market home improvement loans for owner-occupied rehabilitation. Helps preserve owner-occupied affordable housing.
Nashville, Memphis, and major Tennessee local programs
Nashville, Memphis, and Knoxville operate substantial local affordable housing programs supplementing THDA's statewide activity.
Nashville Barnes Housing Trust Fund
Local trust fundMetro Nashville's Barnes Housing Trust Fund supports affordable rental and homeownership development within Nashville. Funded through annual appropriations.
Memphis & Shelby County Affordable Housing
Local subsidyCity of Memphis and Shelby County's affordable housing programs supporting multifamily and homeownership development through the Division of Housing and Community Development.
City of Knoxville Affordable Housing
Local subsidyKnoxville's affordable housing programs through the Community Development Department supporting multifamily and homeownership development.
Tennessee Historic Preservation Tax Credit
State tax credit · Historic rehabTennessee state historic tax credit for rehabilitation of certified historic structures. Pairs with federal HTC and 4% LIHTC for adaptive-reuse housing developments.
How Tennessee programs typically combine
Programs combine differently depending on what you're building. A short reference of representative stacks across the program-type spectrum:
- Statewide 9% LIHTC: 9% LIHTC + Tennessee Housing Trust Fund + HOME + ESG (for supportive components).
- 4% LIHTC + bonds: 4% LIHTC + THDA bonds + TN Housing Trust Fund.
- Permanent supportive housing: 9% LIHTC + THTF + Section 811 PRA + state coordinated services.
- Nashville-area affordable rental: Barnes Housing Trust Fund + 9% LIHTC + THTF + HOME.
- Historic adaptive reuse: Federal HTC + Tennessee Historic TC + 4% LIHTC + THDA bonds.
- First-time homebuyer: Great Choice Home Loan + Great Choice Plus DPA + MCC.
Post-OBBBA implications
- Permanent 12% LIHTC increase: Tennessee's annual 9% LIHTC ceiling is permanently larger starting 2026.
- 25% PAB financed-by test: for bonds issued after December 31, 2025, materially expanding the pipeline of 4% LIHTC deals that can be supported per dollar of bond volume cap.
- Permanent OZ designations: Qualified Opportunity Zone designations gain permanence; Rural OZ provisions may apply in qualifying portions of the state.
- Section 45L / 179D termination (June 30, 2026): Developers pursuing energy-efficient construction should accelerate placed-in-service dates.
This is educational reference material for affordable-housing practitioners, not legal, tax, financial, or investment advice. State program details, funding levels, and rules change frequently — consult the relevant state agencies and qualified counsel before structuring any transaction. See Disclaimer.