Mortgage in Tennessee
Fueled in large part by rapid growth in Nashville and Memphis, Tennessee has become a hotspot for job seekers. Large tech companies, like Microsoft , are considering or have opened offices in Nashville. This influx of tech and other high-paying jobs has contributed to some of the country's fastest-growing home prices and a median sales price of just under $350,000 in Nashville . If you're thinking of moving to Tennessee, use our Tennessee mortgage calculator to make sure the move still fits your budget.
Mortgage Options in Tennessee
Anyone looking to buy a home in the Volunteer State should know about three main types of mortgages.
- Tennessee conventional mortgage: These mortgages have two subtypes. The first, called a conforming mortgage, is a loan below the limit set by Freddie Mac and Fannie Mae (typically about $550,000). For these loans, you'll need a bare minimum of 3% down and a credit score of 620+. If you take out a jumbo loan (one above that limit), you'll likely need 20% down and a credit score above 700.
- Tennessee FHA mortgage: If you're buying a home that fits within the FHA limits, you can put as little as 3.5% down to get an FHA loan. Private mortgage insurance is always required. If your credit score is below 580 but above 500, you can still get an FHA loan with 10% down.
- Tennessee VA mortgage: If you are a current or former military member, you can get a VA-backed loan. While these loans require a credit score of 660, they come with many perks, including the ability to put nothing down!
The above programs are available to everyone. However, Tennessee also offers assistance to those buying their first home.
First-Time Home Buyer Programs in Tennessee
The Tennessee Housing Development Agency offers three programs to help prospective homebuyers stop renting and start owning!
Through the Great Choice program, buyers can obtain a 30-year low-interest fixed-rate mortgage. Buyers who have this mortgage can also apply for down payment assistance.
Eligibility Criteria: Borrowers must have a credit score of 640 or higher. Income and purchase price restrictions apply.
Tennessee also offers down payment assistance in the form of a second mortgage. This loan has a 15-year term and carries the same interest rate as the first loan. Homebuyers will need to make monthly payments.
For homes under $150,000, the amount of assistance is $6,000 flat. For housing at or above $150,000, the assistance amount is $7,500.
Eligibility Criteria: Borrowers must meet all the guidelines for the Great Choice home loan program. Additionally, borrowers must complete a homebuyer education course to receive the down payment assistance.
This program closely mirrors Great Choice. The primary difference is that it offers an interest rate that is 0.5% lower.
Eligibility Criteria: Borrowers must meet all the criteria of the Great Choice program. Additionally, borrowers must be an active-duty service member or an honorably discharged veteran.
Tennessee Mortgage Calculator: Compare Your Loan Options
If you're considering a move to the Volunteer State, explore all your mortgage options. There's a good chance one of these loan types will work for you! Use our Tennessee mortgage calculator to compare options and find the one that fits your budget.
