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State housing reduces interest rate

Posted on Monday, July 16, 2012 at 1:36 pm

A favorable market for its latest bond issuance has allowed Tennessee Housing Development Agency (THDA) to reduce the interest rates on its mortgage loan products.

The three mortgage loans are named Great Rate, Great Advantage and Great Start. The lowest interest rate, 3.6%, is the new rate for the Great Rate mortgage. The Great Advantage and Great Start mortgage loans offer good interest rates and down payment assistance grants.  Buyers who choose a 4% down payment grant under the Great Start mortgage will pay a fixed rate of 4.2% on the 30-year loan.  Great Advantage customers, those who accept a grant of 2% of the purchase price towards their down payment, have an interest rate of 3.9%.

“We are pleased to be able to offer these reduced interest rates,” said Lindsay Hall, THDA’s Senior Director for Single Family Programs. “This is great timing; summer is historically a prime time to buy a home. The inventory of existing homes is high. If a buyer chooses new construction we offer a six-month interest rate lock. We invite potential buyers to contact their lender or real estate professional.”

THDA mortgages are originated through local lenders.  A list by county is found here:

Veterans are invited to apply for a program designed for them. The Homeownership for the Brave program, available through March 30, 2013, takes .5% off any of the three interest rates. Veterans, or spouses, would apply for a 3.1% Great Rate mortgage, a 3.4% Great Advantage mortgage or a 3.7% Great Start mortgage.

Buyers are encouraged to take a pre-purchase homeownership class. Those who accept a down payment grant are required to take a class not more than 12 months before the purchase.

“We have research that shows a remarkably higher success rate for buyers who have taken homeownership counseling,” said Hall. “There are counselors available across Tennessee. They are listed on our website.”

The production of mortgages at THDA has been steady throughout the economic instability.  Nearly $25 million in mortgage applications were received in June.