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Tennessee’s housing market is known for its affordability, vibrant cities like Nashville and Knoxville, and beautiful rural landscapes. With a cost of living below the national average and no state income tax, it’s an attractive choice for first-time buyers. Plus, many areas of Tennessee qualify for special mortgage programs that can make homeownership more affordable.
Top First-Time Homebuyer Loan Programs in Tennessee
- FHA Loans
- Backed by the Federal Housing Administration, FHA loans are a popular choice for first-time buyers due to their low down payment requirements (as low as 3.5% with a 580+ credit score).
- Learn more about FHA Loans
- USDA Loans
- Ideal for rural homebuyers, USDA loans offer 100% financing with no down payment required, low interest rates, and reduced mortgage insurance costs. Eligibility depends on property location and income limits.
- Check USDA Loan requirements
- VA Loans
- Available to veterans, active-duty service members, and eligible surviving spouses, VA loans provide zero down payment, no PMI, and competitive interest rates.
- Explore VA Loan benefits
- Conventional Loans
- Conventional loans can also be a great choice for first-time buyers with good credit. They often offer competitive rates and flexible terms, including 15- and 30-year fixed options.
- Compare 30-Year vs. 15-Year Fixed Loans
- THDA Great Choice Home Loan Program
- Offered by the Tennessee Housing Development Agency (THDA), this program provides 30-year fixed-rate mortgages and down payment assistance for eligible buyers. It also offers the Great Choice Plus down payment assistance, which can cover up to 5% of the purchase price.
How to Qualify for These Programs
To qualify for most first-time homebuyer loans in Tennessee, you’ll generally need:
- A credit score of 580 or higher (for FHA) or 620+ (for conventional loans)
- A stable income and employment history
- A reasonable debt-to-income (DTI) ratio (typically under 43% for most programs)
- Proof of U.S. citizenship or lawful residency
Key Tips for First-Time Buyers in Tennessee
- Get Pre-Approved: This helps you know your budget and makes your offer more competitive.
- Use a Mortgage Calculator: Understanding your monthly payments is essential.
- Research Down Payment Assistance: Many state and local programs offer down payment help, which can make buying more affordable.
- Work with a Knowledgeable Agent: A local real estate agent can guide you through the Tennessee market.
FAQs About Tennessee First-Time Homebuyer Loans
What credit score do I need for a first-time homebuyer loan in Tennessee?
Typically, you’ll need a credit score of at least 580 for FHA loans and 620 for conventional loans.
Can I buy a home with no down payment in Tennessee?
Yes, USDA and VA loans offer zero down payment options if you meet the eligibility criteria.
Are there special programs for teachers, firefighters, or first responders in Tennessee?
Some local governments and nonprofits offer specialized programs for these groups. Check with your local housing authority for more details.
Read Next
Ready to take the first step? Start your homebuying journey today by exploring your loan options and finding the perfect mortgage for your needs.
Get Expert Financing
- Matched with investor-friendly lenders
- Fast pre-approvals-no W2s required
- Financing options fro rentals, BRRRR, STRs
- Scale your portfolio with confidence
Our advice is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
