THDA's targeted counties and the first-time buyer rule

"First-time buyer" sounds simple, but THDA's version has a twist that a lot of Tennesseans never hear about. Depending on where you buy, you might not need to be a first-time buyer at all. Let's go through who has to meet the rule, where it's waived, and how to check an address.

The rule, in THDA's terms

For a THDA Great Choice or Homeownership for Heroes loan, you generally can't have had an ownership interest in a principal residence during the past three years (36 months). If you're married, both spouses have to meet it.

That means a few things people don't expect:

• If you owned a home years ago and sold it more than three years back, you count as a first-time buyer again.
• Owning land or a rental you didn't live in is different from owning your principal residence. A lender reviews the details.
• If your spouse owned a home two years ago, the rule catches both of you, even if you've never owned.

Three ways around it

1. Buy in a targeted county. THDA lists 43 counties where the rule doesn't apply anywhere in the county.
2. Buy in a targeted census tract. Twenty-one more counties have specific tracts where it's waived.
3. Be a qualified veteran or service member. The waiver applies statewide for them.

One thing to be clear on: teachers, officers, firefighters, EMTs and dispatchers don't get a separate waiver because of their jobs. A deputy who owned a home last year needs to buy in a targeted area, or look at another loan.

The 43 targeted counties

Per THDA's targeted areas list, the whole county is targeted in:

Campbell, Cannon, Carroll, Claiborne, Cocke, Crockett, DeKalb, Dyer, Fayette, Fentress, Franklin, Gibson, Grainger, Greene, Grundy, Hancock, Hardeman, Hawkins, Haywood, Henderson, Houston, Jackson, Jefferson, Johnson, Lake, Lauderdale, Lawrence, Lincoln, Macon, Meigs, Monroe, Morgan, Overton, Pickett, Polk, Rhea, Scott, Stewart, Tipton, Trousdale, Union, Van Buren and White.

THDA describes a targeted area as a qualified census tract or an area of chronic economic distress as designated by the IRS. That's the federal label behind the list.

The 21 counties with targeted tracts

In these counties, only certain census tracts are targeted, so it depends on the exact address:

Anderson, Blount, Bradley, Carter, Davidson, Hamblen, Hamilton, Hardin, Henry, Knox, Madison, Maury, McMinn, Montgomery, Putnam, Robertson, Rutherford, Shelby, Sullivan, Warren and Washington.

Notice that all four of the biggest counties are on it: Davidson, Shelby, Knox and Hamilton. So a repeat buyer in Nashville or Memphis isn't automatically shut out. They'd need a home in one of those tracts. Your THDA-approved lender can check the census tract for an address before you make an offer.

Income limits in targeted counties

Targeted counties have their own income limits on THDA's chart, effective Aug. 1, 2026. Most are $113,880 for one or two people and $132,860 for three or more. That's higher than many nearby non-targeted rural counties, which sit at $94,900 and $109,200.

A few targeted counties near the bigger metros are higher still:

The $500,000 price limit is the same everywhere. See every county on the income limits page.

Who this actually helps

A few real-world situations where the targeted list changes the answer:

• A divorce. You were on a house with an ex until last year. In a targeted area, that recent ownership doesn't block a THDA loan.
• A move up. A young family sold a starter condo in Knoxville and wants room in Jefferson or Grainger County. Both are targeted.
• A firefighter changing departments. He owned a home near his old station and is moving for a new job near Tipton County. Targeted.
• A teacher in Greene County. She sold her house to care for a parent, and now she's ready to buy again. Greene is targeted.

Each of them can still use Homeownership for Heroes or Great Choice if they meet the income, credit and job rules.

Veterans and military: the statewide exception

Qualified veterans and military get the first-time buyer waiver anywhere in Tennessee, not only in targeted areas. THDA's lender guide lists a military LES or DD-214 as the documents, and veterans may also use THDA's Veteran Exemption Application Declaration. That makes Heroes especially useful around Fort Campbell and in Nashville's suburbs, where many service members and veterans already own or have owned a home. The Fort Campbell guide goes further.

What if none of this fits?

If you've owned recently and you're buying outside a targeted area, you still have options:

• THDA's HFA Advantage conventional loan doesn't have a first-time buyer requirement, and it comes with its own down payment options.
• Plain FHA, VA or USDA loans have no state first-time rule, though you'd skip THDA's rate and help.
• Some city programs define first-time buyers their own way, so read each program's rules in the assistance directory.

How to check an address

1. Look at the county. If it's one of the 43, you're done with this step.
2. If it's one of the 21 tract counties, ask your lender to look up the census tract for the address.
3. Get it in writing on your pre-approval before you write an offer.

Owned before and not sure where you stand? Check your eligibility and tell us the county. We'll point you to a lender who can confirm the tract.

Things people ask

Keep reading

• Picking your Heroes Plus down payment option
• Ten-month paychecks, summer gaps and a THDA loan for teachers
• Buying near Fort Campbell with a VA loan and Homeownership for Heroes
• Nashville, Memphis, Knoxville and Chattanooga: what a first home really costs
• Tennessee's transfer tax and mortgage tax at closing
• Property taxes on a Tennessee first home, and who gets relief
• No state income tax in Tennessee: what lenders actually count
• USDA loans just past the city limits
• Getting every borrower to 640 for a THDA loan