FHA Loans in Tennessee: A Lower Down Payment and More Room on Credit
For buyers who want a smaller down payment or need more flexibility on credit than a conventional loan allows.
FHA loans are insured by HUD, which lets lenders accept smaller down payments and lower credit scores. Each lender still adds its own rules, so the same file can be approved at one and turned down at another.
I compare FHA and conventional on your actual numbers, check down payment assistance, and place your file with the lender whose rules fit.
Recent file: buyers used national down payment assistance with their FHA loan and closed 30 days after applying, on the scheduled date.
“RL is truly the BEST! As first-time homebuyers, we were overwhelmed with the stress and challenges of the underwriting process, but RL had our back every single step of the way. He went above and beyond—working long hours, late nights, and putting in an incredible amount of effort and dedication to make sure everything came together for us. We could not have gotten through this process without him!”
Kaitlyn B.
Franklin, TN
Who FHA Loans Are Best For
FHA works for buyers who don’t fit conventional guidelines yet, or who would rather keep more cash in the bank.
Is an FHA Loan Right for You?
FHA usually makes sense when your credit score or down payment would make a conventional loan expensive or out of reach. A good first step is working out how much house you can afford.
If your credit is strong, conventional often costs less over time because its mortgage insurance can come off. I run both before you choose.
Are purchasing a primary residence
Want a lower down payment option (as little as 3.5% under HUD’s rules)
Have limited credit history or credit that needs flexibility
Want a government-insured loan with set guidelines
Want FHA and conventional compared before you choose
FHA Loan Limits in Tennessee for 2026
FHA limits are set by county each year. In Williamson County and the rest of the Nashville area, an FHA loan can go as high as a conforming loan. In most of Tennessee, the FHA limit is roughly half that.
| Where the home is | 2026 FHA limit, one-unit home |
|---|---|
| Williamson, Davidson, Rutherford, Maury, Sumner and Wilson counties, plus Cannon, Cheatham, Dickson, Hickman, Macon, Robertson, Smith and Trousdale | $1,029,250 |
| The other 81 Tennessee counties, including Knox (Knoxville), Hamilton (Chattanooga), Shelby (Memphis) and Montgomery (Clarksville) | $541,287 |
FHA also finances two- to four-unit homes if you live in one of the units. Those limits run from $1,317,650 for a duplex to $1,979,350 for a fourplex in the Nashville area, and from $693,050 to $1,041,125 elsewhere in Tennessee.
The FHA Appraisal
Along with value, an FHA appraiser checks the home against HUD’s minimum property standards for safety, security and soundness. On an older home, items like peeling paint, a missing handrail or a damaged roof can need repair before closing. Knowing that before you write the offer keeps it from becoming a late surprise.
FHA or Conventional?
FHA is often the better fit when credit needs more flexibility. For buyers with stronger credit, a conventional loan can cost less over time because its mortgage insurance can be removed later. I compare both on your actual numbers before you choose.
What FHA Mortgage Insurance Costs
Every FHA loan carries two premiums set by HUD: an upfront premium of 1.75% of the loan, usually added to the loan, and an annual premium paid monthly. On a 30-year loan of $726,200 or less, the annual premium is 0.55% with less than 5% down and 0.50% with 5% or more (0.70% to 0.75% on larger loans). With less than 10% down it lasts for the life of the loan; with 10% or more it ends after 11 years.
Here is how that works on a $400,000 home with a 30-year loan, at the minimum down payment and at 10% down (round numbers for illustration):
| On a $400,000 home | 3.5% down | 10% down |
|---|---|---|
| Down payment | $14,000 | $40,000 |
| Loan before the upfront premium | $386,000 | $360,000 |
| Upfront premium (1.75%) | $6,755 | $6,300 |
| Loan with the premium added | $392,755 | $366,300 |
| Annual premium | 0.55% | 0.50% |
| Monthly premium at the start | About $177 | About $150 |
| How long it lasts | Life of the loan | 11 years |
HUD figures the annual premium on the loan’s average balance each year, so the monthly amount drifts down slowly as you pay the loan off. Whether FHA’s premium is worth it depends on how long you’ll keep the loan, so I run it against conventional on your numbers.
Down Payment Assistance
I can offer national FHA down payment assistance programs through my lenders. Most come as a second loan alongside the FHA loan that is either repaid over time or forgiven after a set period. Eligibility and terms vary by program, and assistance can change the rate and total cost, so I compare your FHA loan with and without it before you decide.
From a Recent File
Buyers looking in Goodlettsville came to me through their agent at the end of March, and they used a national down payment assistance program alongside their FHA loan. Five days after they applied, on a Sunday, I had them pre-approved and their file submitted to underwriting. They closed on April 30, the scheduled closing date, 30 days after the application came in.
Limits from HUD’s FHA mortgage limits lookup and mortgage insurance premiums from HUD Mortgagee Letter 2023-05, reviewed October 2026. HUD publishes the next year’s limits around the end of each year.
Common Questions About FHA Loans
No. FHA loans are available to both first-time and repeat buyers.
As little as 3.5% with a credit score of 580 or higher, or 10% with a score from 500 to 579, under HUD’s FHA handbook. Many lenders set a higher minimum score than HUD does, so where you apply matters. The low down payment is why FHA is popular with buyers who have limited cash or are rebuilding credit.
FHA loans carry an upfront and a monthly mortgage insurance premium, and on most FHA loans with a small down payment the monthly premium stays for the life of the loan. Whether that’s worth it depends on how long you plan to keep the loan, so I compare it with conventional on your numbers.
Yes. What worries a seller is the FHA appraisal and whether the loan closes on time. I check the property against HUD’s standards before you write the offer, and the listing agent can call me about your file.
$1,029,250 for a one-unit home in 2026, the same as the rest of the Nashville area. Most other Tennessee counties are at $541,287.
Yes. FHA finances two- to four-unit homes as long as you live in one of the units, and the loan limits are higher for those properties.
Yes. The appraiser checks the home against HUD’s minimum property standards for safety and soundness, and required repairs usually have to be finished before closing.
Yes. I offer national FHA down payment assistance programs through my lenders. Most are a second loan that is repaid over time or forgiven after a set period, and eligibility varies by program, so I compare your loan with and without assistance.
Related reading: Mortgage Pre-Approval vs Pre-Qualification · Mortgage Closing Delays: Causes and How to Prevent Them
How I Approach FHA Loans
Four things I do on every FHA file.
FHA and Conventional, Side by Side
Before you choose, I price FHA and conventional on your actual credit, income and down payment, with and without down payment assistance.
You see what each costs at closing and each month, and what changes if you keep the loan longer.
The Lender Whose Rules Fit
HUD sets the minimums, and many lenders add stricter rules on credit scores and debt. I shop your file across more than 30 lenders and place it with one whose rules fit.
Every complete application gets a same-day review.
The Appraisal, Before the Offer
An FHA appraisal checks the home against HUD’s property standards. On an older home, I flag likely repairs before you write the offer, so they don’t surface a week before closing.
I have never missed a closing date.
One Person, Seven Days a Week
You work with me from the first call until your loan closes. No call center, no handoffs.
Calls and texts returned the same day, 7 days a week.
Not Sure if an FHA Loan Is the Right Fit?
Send me your situation and I’ll show you FHA next to conventional on your numbers, with and without down payment assistance, so you can see which costs less. It takes one call, and there’s no credit pull to start.
Start My Pre-Approval
Book a Strategy Call
Call or Text Me Directly