Mack's Blog

Several changes are making the Homeownership Choices offered by Tennessee Housing Development Agency (THDA) even more affordable today.
The mortgage interest rates have been lowered on Great Rate/Save, Great Advantage and Great Start, and THDA is making the federal tax credit useful at time of closing.
• The Great Rate interest rate is 5.20%.
• Great Save, for households with adjustable rate mortgages that have become unaffordable, carries the same rate, 5.20%.
• Great Advantage and Great Start provide 2 or 4% downpayment and closing cost grants at mortgage interest rates of 5.50% and 5.80%, respectively. Homebuyers who accept grants are required to attend homebuyer education with a certified trainer. Homebuyer education is suggested for all THDA homebuyers.
• Through the Stimulus Loan, THDA offers a 0% deferred interest loan to be used for downpayment and closing costs.

THDA provides 30-year fixed rate mortgage loans. The mortgage loans are originated through local lenders with eligible homebuyers. Program qualifications and a list of participating lenders are posted at www.thda.org.

The $8,000 federal stimulus tax credit offered only to first-time homebuyers can be used with the THDA mortgages. The newest FHA Mortgagee Letter, 2009-15, confirms THDA’s Stimulus Loan Program eligibility. For mortgage loans closed before or on November 30, 2009, THDA will make a 0% deferred interest loan for up to 3.5% of the purchase price to be used for the downpayment and closing costs. If the deferred interest loan is repaid by June 30, 2010, only the first mortgage remains. If the homebuyer chooses to not pay off the Stimulus Loan by June 30, 2010, the Stimulus Loan becomes an amortizing second mortgage loan at 1% over the first mortgage’s interest rate. Credit review assesses the applicants’ ability to pay both debts.

Homebuyer education is required for the Stimulus Loan.
[Source:MTAR blog]