Tennessee Housing Trust Fund Competitive Grants Program

The Tennessee Housing Trust Fund Competitive Grants Program, administered by the Tennessee Housing Development Agency (THDA), is designed to fund creative and innovative rental housing solutions across the state. The program supports the development, acquisition, rehabilitation, and conversion of rental housing units to increase the availability of affordable housing for low-, very low-, and extremely low-income Tennesseans. For the 2025 funding cycle, approximately $3.5 million is available, with potential for additional funding from unallocated or returned funds from prior years. Awards will be made through a competitive process and are intended to bridge financing gaps that impede otherwise feasible projects from proceeding. Eligible applicants include public housing authorities and private, nonprofit housing development organizations that are either based in Tennessee or legally authorized to operate in the state. All applicants must demonstrate at least two consecutive years of experience in providing affordable housing or related services in Tennessee within the past five years. For organizations seeking funding for transitional housing for formerly incarcerated individuals, additional requirements apply, including good standing with the Tennessee Department of Corrections and inclusion on its list of approved providers. Faith-based applicants requesting a Fair Housing Act exemption must submit a legal opinion letter demonstrating eligibility for the exemption. Projects funded through this grant must be for rental housing serving low- to extremely low-income households. Eligible uses of funds include new construction, acquisition, rehabilitation, and conversion of non-residential buildings. The program allows both permanent and transitional housing models, and projects may designate fixed or floating assisted units. However, funds may not be used for homeownership activities, administrative costs, operating reserves, or properties serving as treatment centers or institutional facilities. Each project must meet rigorous property standards, including energy efficiency, accessibility, and state/local code compliance. Additionally, projects involving special populations such as persons with disabilities or formerly incarcerated individuals must incorporate supportive services and comply with CMS standards if applicable. Applicants must provide a 50% match of requested funds, which can come from a variety of sources, including other grants, loans, supportive services, or the value of property. THDA emphasizes that matching commitments should be clearly documented and encourages match levels exceeding the minimum requirement. Maximum award sizes range from $100,000 to $600,000, and the allowable subsidy per unit varies by bedroom count, with limits ranging from $136,316 for efficiency units to $269,447 for four-bedroom units. Each award is structured as a secured grant with a term of up to three years and includes a compliance period based on the per-unit investment amount. During the compliance period, grantees are required to meet rent, income, inspection, and reporting standards, among other conditions. Applications for the 2025 round will be made available on January 16, 2025, and must be submitted electronically by 4:00 PM Central Time on February 27, 2025. Applicants must use the secure EDT site provided by THDA and notify the agency upon submission. Missing threshold documents may be submitted within 72 hours of notification, but there is no cure period for general application content. Awards are expected to be announced by May 30, 2025, with grant terms beginning July 1, 2025, and ending June 30, 2028. Key application components include signed applications, organizational financials, board resolutions, project budgets, IRS documentation for nonprofits, and TDOC approvals for transitional housing providers. A review committee will score applications using a matrix that prioritizes program design, organizational capacity, demonstrated need, and innovation. Competitive proposals will reflect a strong alignment with program objectives, a clear demonstration of housing need, well-supported financial feasibility, and a commitment to serving priority populations such as individuals at or below 50% or 30% of Area Median Income (AMI). Additional points are available for projects in rural or distressed counties, and THDA reserves the right to limit funding to one award per county to ensure geographic diversity. Monitoring continues throughout the compliance period, with periodic inspections and documentation required. Projects must also be listed on TNHousingSearch.org and follow all fair housing, marketing, and procurement guidelines. THDA’s Communications Division may assist with publicizing grantee achievements to further promote affordable housing statewide.

High-scoring applications exceed the 50% match, serve 30% or 50% AMI populations, and are located in rural or distressed counties.