By Chasity Tucker | Benchmark Realty

One of the most common things I hear from buyers in the Nashville area is, “I didn’t realize there were that many options.” Mortgage guidelines can feel overwhelming, so here’s a straightforward breakdown of major loan programs available in Greater Nashville and what current requirements typically look like.

Conventional Loans — Low Down Payment Options
Conventional loans are issued by private lenders and are not government-backed. They offer flexibility in property type and loan size but generally require stronger credit and income documentation.

Some programs, such as Fannie Mae’s HomeReady and Freddie Mac’s Home Possible, allow qualifying buyers to put down as little as 3% with a minimum credit score around 620. Standard conventional loans often require 5% down.
If you put down less than 20%, you’ll pay private mortgage insurance (PMI) until sufficient equity is reached.

FHA Loans — Flexible Qualification Guidelines
FHA loans are backed by the Federal Housing Administration and allow down payments as low as 3.5% for borrowers who meet credit and income standards. In some cases, borrowers with lower credit scores may qualify with a larger down payment.

FHA loans permit higher debt-to-income ratios compared to many conventional loans. They do require both an upfront and annual mortgage insurance premium (MIP), which typically remains until the loan is refinanced or paid off.

VA Loans — For Eligible Service Members and Veterans
VA loans are available to eligible veterans, active-duty service members, and qualifying surviving spouses. These loans may allow 0% down and do not require monthly PMI. Eligibility is determined by service history, and a VA-approved lender can confirm qualification through a Certificate of Eligibility.

A VA funding fee may apply, though exemptions exist under certain eligibility circumstances.

USDA Loans — Location-Based 0% Down Option
USDA loans allow 0% down for eligible properties located in USDA-designated areas. Eligibility is based on property location and household income limits established by the program.
Many suburban and rural areas of Middle Tennessee qualify, though income restrictions apply. A lender can verify both property eligibility and household qualification.

THDA — Tennessee Housing Development Agency Programs
THDA offers mortgage programs for eligible homebuyers in Tennessee, including fixed-rate options paired with down payment assistance. Income and purchase price limits vary by county and are determined by program guidelines.
THDA-approved lenders can confirm eligibility and provide current program details.

Choosing the Right Program
The right loan depends on credit profile, income, savings, debt obligations, and property location. A licensed lender can review your financial picture and outline which programs you qualify for.
Getting pre-approved doesn’t commit you to buying. It simply provides clarity on your purchasing power in the Greater Nashville market.

Have questions about buying in Nashville, Franklin, Brentwood, Murfreesboro, or Smyrna? I’m happy to walk you through your options — no pressure, just clear information.