Tennessee Mortgage Loans
VA, FHA, DSCR & More

Tennessee stands out for a combination of features that make it one of the most attractive housing markets in the Southeast: no state income tax, a statewide median home price around $425,000, strong population inflows from higher-cost states, and a rapidly growing economy anchored by healthcare, manufacturing, logistics, and music/entertainment.

Nashville’s growth has been exceptional — and has pushed the Nashville metro’s FHA loan limit to $1,029,250 for 2026, reflecting dramatically elevated home values in Davidson, Williamson, and surrounding counties. This is a critical data point: buyers in Nashville’s suburbs who assume the baseline $541,287 FHA limit applies may be leaving significant buying power on the table.

Tennessee’s THDA (Tennessee Housing Development Agency) runs the state’s primary first-time homebuyer programs, including the Homeownership for Heroes rate discount for veterans, military, and first responders. Fort Campbell in Clarksville drives one of the state’s strongest VA loan markets.

VA Home Loans

$0 down, no PMI, no county loan limits for full entitlement. Fort Campbell (Clarksville) drives one of Tennessee’s highest VA loan volumes. THDA Homeownership for Heroes provides an additional 0.5% rate discount on Great Choice loans for veterans and active duty. VA Cash-Out fully available in TN.

FHA Loans

3.5% down with 580+ credit. Nashville metro FHA limit: $1,029,250 — covering Davidson, Williamson, Rutherford, Sumner, Wilson, and surrounding counties. Most other TN counties: $541,287. Pairs with THDA Great Choice Plus for maximum DPA benefit.

Conventional Loans

As low as 3% down. $832,750 conforming limit statewide. When buyers in Nashville’s suburbs exceed the FHA limit but stay below $832,750, conventional becomes the right choice — often with better terms than FHA at higher loan amounts. THDA HFA Advantage pairs conventional with DPA.

First-Time Homebuyer

THDA Great Choice ($6K deferred OR up to 5%/$15K amortizing DPA), Homeownership for Heroes (0.5% rate reduction for military/vets/first responders), Nashville Housing Fund ($35K), Memphis ($25K), Clarksville ($10K), Chattanooga ($25K). We stack programs to minimize cash at closing.

Construction Loans

One-time close construction-to-permanent loans lock your rate from day one. Nashville’s expanding suburbs — Hendersonville, Gallatin, Lebanon, Spring Hill, Nolensville — have active new construction markets. VA construction available for eligible Tennessee veterans with zero down.

Cash-Out Refinance

No state-level LTV cap in Tennessee. Conventional cash-out up to 80% LTV on primary residences, 75% on investments. VA Cash-Out fully available. Tennessee homeowners — especially in Nashville’s rapidly appreciating market — often access equity for renovations, investment properties, or debt consolidation.

DSCR Investor Loans

Qualify on rental income — no tax returns or W-2s. Nashville’s booming population drives exceptional long-term rental demand. Memphis offers affordable entry prices with strong cash-flow fundamentals. Knoxville benefits from UT tenant demand. Gatlinburg/Pigeon Forge generates outstanding short-term vacation rental income. LLC closings available.

For Tennessee Veterans

The Full Story on Tennessee VA Loans

Tennessee is home to over 570,000 veterans. Fort Campbell in Clarksville straddles the Tennessee-Kentucky border and is one of the most active Army installations in the United States — home to the 101st Airborne Division. The combination of the standard VA loan program and THDA’s Homeownership for Heroes rate discount makes Tennessee one of the best states for military homebuyers in the Southeast.

• ✓ Zero down payment in all 95 Tennessee counties — Nashville, Memphis, Clarksville, Knoxville — with full entitlement
• ✓ No private mortgage insurance — significant monthly savings vs. FHA or conventional loans
• ✓ THDA Homeownership for Heroes: extra 0.5% rate reduction for veterans and active duty on Great Choice loans
• ✓ VA Cash-Out Refinances fully available in Tennessee — no state restrictions
• ✓ TN installations: Fort Campbell (Clarksville — 101st Airborne), Arnold AFB (Tullahoma), Holston Army Ammunition Plant (Kingsport)

The Tennessee Housing Development Agency (THDA) administers Tennessee’s primary first-time buyer programs. The flagship Great Choice Home Loan pairs a 30-year fixed-rate mortgage (FHA, USDA, or VA) with Great Choice Plus down payment assistance — giving buyers two options: a $6,000 deferred 0% interest loan (forgiven after 30 years) or an amortizing loan of up to 5% of the purchase price (max $15,000), paid monthly over 30 years at the same rate as the first mortgage.

The Homeownership for Heroes program extends the Great Choice benefits to veterans, active military, law enforcement, EMTs, paramedics, and firefighters — with an additional 0.5% interest rate reduction. Veterans and active military do not need to be first-time buyers to qualify for this program.

Local city programs add on top: Nashville’s Housing Fund (up to $35,000), Memphis (up to $25,000 forgivable), Clarksville (up to $10,000), and Chattanooga Neighborhood Enterprise (up to $25,000). All require 640+ credit and a THDA-certified homebuyer education course.

“We’d rented near Campbell for six years. When I deployed to Europe the second time, my wife handled the whole process with Adam’s team remotely. VA loan with zero down, and they stacked the THDA Homeownership for Heroes 0.5% rate reduction on top. I came home to a new house. The education-first approach made sure she understood every step. Couldn’t ask for more from a lender.”

“We were buying in Rutherford County and didn’t realize that Nashville’s elevated FHA limit of $1,029,250 applied to us too. Adam’s team confirmed our county limit, stacked the THDA Great Choice Plus DPA with our FHA loan, and we brought under $4,000 to closing on a $420,000 home. Without that county limit knowledge, we would have been stuck thinking FHA stopped at $541,000. That’s real value.”

“We acquired a long-term rental in East Nashville and a cabin near Gatlinburg through DSCR loans — qualified entirely on projected rental income with no W-2s needed. Nashville’s rental market is one of the best in the South, and Gatlinburg’s vacation rental income during peak seasons is exceptional. Closed both through our LLC within 60 days. Already targeting a second Sevierville property.”

Tennessee’s economic powerhouse. FHA limit: $1,029,250 — nearly double most TN counties. Music, tech, healthcare, and hospitality employment. Nashville’s Housing Fund provides up to $35,000 in local DPA for city buyers. One of the South’s strongest long-term rental DSCR markets.

Tennessee’s largest city by population. Affordable entry prices well below the national median. Memphis DPA provides up to $25,000 for qualified buyers within city limits. FedEx, healthcare, and logistics drive employment. Strong DSCR cash-flow market with lower price-to-rent ratios.

University of Tennessee drives consistent rental demand throughout Knox County. Gateway to the Smoky Mountains creates short-term rental potential. Affordable compared to Nashville with solid appreciation. THDA programs available. Growing tech and manufacturing employment base.

One of the South’s most transformed cities — from industrial hub to tech and outdoor recreation destination. Volkswagen manufacturing, Amazon logistics, and UTC university employment. Chattanooga Neighborhood Enterprise offers up to $25,000 in DPA. Growing short-term rental market near Tennessee Riverwalk and Lookout Mountain.

Strategy Call

No credit pull. We confirm your county’s FHA limit — Nashville metro or baseline — and identify which THDA programs fit. For Fort Campbell buyers, we map VA entitlement and Homeownership for Heroes stacking.

Lender Shopping

We submit your profile to multiple Tennessee-approved lenders, compare rates and DPA program options side by side, and explain every tradeoff. You decide — we execute with full program stacking in place.

Pre-Approval

A strong lender-reviewed pre-approval letter competitive in Nashville’s and Knoxville’s active markets. Military buyers get VA-specific pre-approvals built for Fort Campbell’s PCS timeline pressure.

Dedicated Processing

Same processor from application to close. No handoffs, no repeated paperwork. For military buyers, communication stays consistent even across deployment and PCS transitions.

Close & Annual Review

On-schedule, on-budget Tennessee closings. Post-close annual review ensures your mortgage still serves your goals as Tennessee’s fast-growing markets continue to evolve.

What are the 2026 FHA loan limits in Tennessee?

Tennessee’s most important FHA distinction for 2026: the Nashville metro qualifies for a $1,029,250 FHA limit — covering Davidson, Williamson, Rutherford, Sumner, Wilson, Cannon, Cheatham, Dickson, Macon, and Robertson counties. Most other Tennessee counties — including Shelby (Memphis), Knox (Knoxville), Hamilton (Chattanooga), and Montgomery (Clarksville) — use the baseline $541,287. Confirming your county before making an offer is essential.

What is the THDA Great Choice Program?

Tennessee’s Great Choice Home Loan is a 30-year fixed-rate mortgage (FHA, USDA, or VA) paired with Great Choice Plus down payment assistance. Buyers choose between a $6,000 deferred loan at 0% interest (forgiven at 30 years) or up to 5% of the purchase price as an amortizing loan (max $15,000, paid monthly). Requires 640+ credit, income limits by county, and a THDA-certified homebuyer education course.

What is Homeownership for Heroes?

THDA’s Homeownership for Heroes program provides a 0.5% mortgage interest rate reduction for eligible active military, veterans, law enforcement officers, EMTs, paramedics, and firefighters who qualify for a Great Choice Home Loan. Veterans and active military are not required to be first-time buyers. Fort Campbell (Clarksville) military families are among the most frequent users of this program in Tennessee.

Can Tennessee veterans use a VA loan with no down payment?

Yes. Veterans with full VA entitlement can purchase any home in all 95 Tennessee counties with zero down — regardless of purchase price. Fort Campbell in Clarksville, home to the 101st Airborne Division, drives one of Tennessee’s strongest VA loan markets. VA Cash-Out Refinances are fully available in Tennessee with no state restrictions.

What local DPA programs exist beyond THDA in Tennessee cities?

Nashville’s Housing Fund offers up to $35,000 for low-to-moderate income buyers. Memphis provides up to $25,000 (or 10% of purchase price) as a forgivable deferred loan within city limits. Clarksville offers up to $10,000 for income-eligible first-time buyers. Chattanooga Neighborhood Enterprise provides up to $25,000 as a 15-year second loan. These can often be stacked with THDA Great Choice Plus for maximum combined benefit.

What Tennessee advantages should homebuyers know about in 2026?

Tennessee has no state income tax — a significant take-home pay advantage for buyers relocating from higher-tax states. Statewide median home price is around $425,000, below the national average. Population growth driven by migration from higher-cost states continues to support housing demand. No state-level cash-out refinance restrictions. Strong DSCR investor markets in Nashville (long-term rentals) and the Smoky Mountains area (short-term vacation rentals near Gatlinburg and Pigeon Forge).

Do you require an upfront credit check to get started?

No. We begin with a strategy conversation — goals, timeline, county target, and which Tennessee programs apply. You’ll know exactly where you stand before we ever pull credit. No pressure, no hard inquiry until you’re ready to formally move forward.

About the Author

Adam Bartling

Army Veteran • Mortgage Loan Officer • NMLS #2213358

As a retired Army Captain and veteran-owned mortgage broker, I help Tennessee homebuyers, veterans, and investors navigate this market with clarity — including Nashville’s elevated FHA limits, Fort Campbell’s military timelines, and THDA’s stackable assistance programs. My team shops multiple lenders to find the best rate and structure for your specific county and situation.

Residential loans $85K–$5M • Commercial loans $1M–$10M • Serving Texas & 30+ States