The Loan That Died Two Days Before Closing: What Every Homebuyer Should Know About THDA Loans
All ArticlesTHDA re-pulls credit and re-underwrites right before closing. A Verizon collection dropped a single dad from 640 to 621 two days out. The deal died. If you are sitting on 640, you are on a tightrope.
A good friend of mine called me this week — a loan officer I have known for years. She is sharp, organized, and never panics. Except this time, she did. Her client's THDA loan fell apart two days before closing.
What went wrong
THDA is the Tennessee Housing Development Agency. Their down-payment assistance is one of the best tools first-time and many repeat buyers have in this state. One part catches people off guard: they re-pull credit right before closing. That is what killed this deal.
The buyer had a 640 — exactly THDA's minimum. The loan was approved. Moving trucks were ready. Then a Verizon collection appeared. Score: 621. THDA's floor is 640. The deal died instantly.
The human side
He was a single dad with three kids. He had done everything right: the homebuyer education class, every document, stayed on top of it. Two days before closing he is told he cannot buy the home. The seller is furious. The agent is scrambling. The buyer is crushed.
Why this happens
THDA's heart is in the right place. The system has two tripwires: they re-pull credit at the end, and they re-underwrite the entire file right before closing. If anything changes — job, debts, even a balance increase — the loan can be denied after you have paid for inspection, appraisal, and movers.
How we saved it
We switched him into a lender-backed down-payment assistance program. Those run through the lender. No income caps, no last-minute re-pulls, one underwriting process, faster closings. The rate is a bit higher. The reliability is worth it on a 640 file.
If you are sitting on 640, you are walking a tightrope
Build a cushion. Do not max out qualifications. If you can save 3% to 3.5% for your own down payment, sometimes patience costs less than heartbreak. If you are counting on THDA, talk to me before you write. (615) 955-0461.
Next: Tennessee Has Money to Help You Buy a Home. Most People Don't Know It Exists., Can You Use a THDA Loan in Franklin and Middle Tennessee?, and There Is Another Down Payment Program in Tennessee. It Goes Up to $35,000.. Or take the Free Home Affordability Check.
Sources and what to verify
This is general mortgage education, not a commitment to lend. Rates, programs, and eligibility depend on the borrower, the property, and investor guidelines. Confirm tax, school, zoning, and legal facts with the official source.
Questions about your specific situation? Call or text Keith directly. No call centers, no runaround.
Book a 15-min ZoomFrequently Asked Questions
Keith Goeringer is a Loan Originator at Barrett Financial Group, NMLS #488023, serving buyers in Franklin, Williamson County, and Middle Tennessee. Call or text (615) 955-0461 or email keith@keithgo.com.
Tennessee Housing Development Agency. Great Choice is a 30-year fixed loan, usually FHA or USDA, with a 640 credit floor. Great Choice Plus can help with down payment and closing costs. Confirm current caps and income limits on THDA.org.
THDA re-pulls credit and re-underwrites close to closing. A new collection, a late, a job change, or a balance spike can drop a 640 file under the floor. Conventional and FHA have credit events too. THDA's hard 640 plus a late re-pull is a special trap.
Seconds or grants that run through the lender instead of a state agency. They often skip the last-minute THDA re-pull and income caps. Rate can be higher. Reliability can be the reason you use them when the score is sitting on 640.
If you are well above 640, THDA can be an excellent tool. If you are at 640 or 641, build a cushion or bring your own 3–3.5% so one collection cannot kill the closing. We will run both on your numbers.
Let's Talk
No forms. No waiting. One conversation can change everything.
More articles
Tennessee Has Money to Help You Buy a Home. Most People Don't Know It Exists.
THDA Great Choice is a 30-year fixed loan with down payment help up to $15,000, a 640 credit floor, and county income limits. In the Nashville metro the 1–2 person limit is $137,760.
Read
Can You Use a THDA Loan in Franklin and Middle Tennessee?
Yes, if the file fits. Great Choice is a 30-year fixed THDA mortgage with down payment help, a 640 credit floor, and county income and price caps. Williamson County is not a targeted area. Confirm the current chart on THDA.org.
Read
There Is Another Down Payment Program in Tennessee. It Goes Up to $35,000.
The Housing Fund is a Tennessee nonprofit that can lend up to $35,000 for down payment and closing costs. You do not have to be a first-time buyer. Credit floors start at 600 or 620. It is a 5% loan, not a grant.
Read