FHA Home Loans in Tennessee
Nashville’s prices pushed its 2026 FHA limit to $694,450, one of the highest in the Southeast, while Memphis, Knoxville, Chattanooga and the rest of the state sit at $541,287. Either way, FHA takes a 580 credit score with 3.5 percent down. We hold a Tennessee Mortgage License and are licensed statewide, in all 95 counties.
Tennessee Mortgage License 218217. NMLS #1925352.
FHA in Tennessee, 2026
Nashville metro limit
$694,450
Memphis, Knoxville, Chattanooga
$541,287
Down payment
3.5% with a 580 score
Transfer tax
$0.37 per $100, usually paid by the buyer
Recordation tax
$0.115 per $100 of the loan above $2,000
$694,450
FHA limit across the Nashville metro
3.5%
Down payment from a 580 credit score
95
Tennessee counties, licensed statewide
4.9
Average of 5,300+ Google reviews
Why FHA reaches further in Tennessee than people expect.
HUD sets FHA limits from local prices, and Nashville’s climb has given Davidson, Williamson, Rutherford, Sumner, Wilson, Cheatham and the rest of the metro a 2026 one-unit limit of $694,450. For a buyer with a 620 score and a small down payment, that makes FHA a real option on a $650,000 house in Franklin or Mt. Juliet, not only a starter home. Across the rest of the state, from Memphis and Jackson to Knoxville, Chattanooga and the Tri-Cities, the limit is the national floor of $541,287, which still covers most of the market.
Tennessee adds two costs a national FHA guide will not mention. The state charges a transfer tax of $0.37 per $100 of the price, which the buyer customarily pays, and a recordation tax of $0.115 per $100 on the mortgage above $2,000, paid by the borrower. On a $350,000 purchase with 3.5 percent down that is about $1,295 plus $390. Closings run through a title company or a real estate attorney, and property taxes are due by the end of February for the prior year.
This page covers FHA as it works in Tennessee. For the state as a whole, including closing customs and every loan we offer here, see our Tennessee page; for the program itself, see the FHA hub. Veterans should read VA loans in Tennessee first; with Fort Campbell, Arnold and Millington, many Tennessee FHA applicants qualify for the better program.
Three ways to use FHA in Tennessee.
Buying, lowering the payment on an FHA loan you already have, or pulling equity out. The recordation tax applies to all three; the transfer tax only to a purchase.
Buying
FHA purchase
3.5 percent down from a 580 score, or 10 percent from 500, with a documented gift from family allowed for the down payment. Sellers can pay up to 6 percent of the price toward closing costs, which in Tennessee can cover the transfer tax, title insurance and prepaid taxes and insurance.
Lower payment
FHA Streamline refinance
Replace an existing FHA loan at a lower rate with no appraisal and, in most cases, no income verification, as long as the new loan passes HUD’s net tangible benefit test. Tennessee charges the recordation tax again on the new loan, so we put it in the break-even math before you commit.
Use equity
FHA cash-out refinance
Borrow up to 80 percent of the home’s value and take the difference in cash on FHA credit terms. Popular across Middle Tennessee for renovations and debt consolidation, where a decade of price growth has left owners with equity to use.
FHA rules, and how they play out in Tennessee.
HUD sets the program rules; lenders add overlays; Tennessee adds its two taxes. Your pro tells you where your file lands. The loan limits on this page are HUD’s 2026 figures; they vary by county and unit count and are updated each year.
| Item | FHA rule | In Tennessee |
|---|---|---|
| Minimum down payment | 3.5% with a 580 credit score; 10% from 500 to 579 | A documented gift from family can supply all of it |
| Upfront mortgage insurance | 1.75% of the loan, usually financed into it | Financing it raises the loan amount, and the recordation tax of $0.115 per $100 is charged on the whole loan above $2,000 |
| Annual mortgage insurance | 0.55% a year on a 30-year loan with less than 5% down (0.50% with 5% or more); for the life of the loan below 10% down, 11 years otherwise | Escrowed monthly with Tennessee property taxes, due by the end of February for the prior year, and homeowners insurance |
| Debt-to-income ratio | Up to about 50% with compensating factors | HOA dues in newer Middle Tennessee subdivisions count in the ratio; we ask for them on the first call |
| Down payment source | Savings or documented gift funds from family | Gift funds need a gift letter and a paper trail before closing |
| Seller contributions | Up to 6% of the price toward closing costs | The buyer customarily pays the transfer tax and the lender’s title policy in Tennessee, so seller concessions go a long way here |
The 2026 one-unit FHA limit is $694,450 in Davidson, Williamson, Rutherford, Sumner, Wilson, Cheatham and the other Nashville-metro counties, and $541,287 in Shelby, Knox, Hamilton and most other Tennessee counties.
What the $694,450 Nashville limit actually buys.
With 3.5 percent down, a $694,450 FHA loan supports a purchase price of about $720,000 before the upfront mortgage insurance is financed. That covers most of the single-family market in Davidson, Rutherford, Sumner and Wilson counties and a large share of Williamson, which is why FHA is a common first mortgage in Murfreesboro, Hendersonville, Mt. Juliet and Spring Hill, not only in the older neighborhoods of Nashville itself.
Outside the metro the floor of $541,287 applies, and two- to four-unit limits are higher everywhere, which makes FHA a route to a duplex in East Nashville, Memphis or Knoxville, where rent from the second unit can count toward qualifying.
Statewide, remotely
FHA loans closed at a Tennessee title company or attorney’s office near you, wherever in the state the home is.
Six Tennessee details that decide an FHA approval.
None of these are in the national FHA guide. All of them come up on Tennessee files.
01
The transfer tax
$0.37 per $100 of the purchase price, customarily paid by the buyer. On a $350,000 home that is $1,295 at closing; FHA allows the seller to cover it within the 6 percent concession limit.
02
The recordation tax
$0.115 per $100 of the mortgage above the first $2,000, paid by the borrower, on purchases and refinances alike. On a $340,000 FHA loan it is about $390.
03
The FHA appraisal
FHA appraisers check condition as well as value: roof life, working systems, peeling paint on older homes, safety items. On older Memphis, Knoxville and Chattanooga housing that often means the roof, the crawlspace and the electrical; we tell sellers what to expect.
04
Property taxes due in February
County and city bills for the year are due by the end of the following February. The seller credits you their share at closing and the escrow is yours after that.
05
Title company or attorney
Tennessee closings run through either. We work with closing agents across the state and can recommend one near you; the fee is a buyer closing cost.
06
Mortgage insurance for life
With less than 10 percent down the annual premium stays for the life of the loan. The usual exit is a conventional refinance at 20 percent equity, which Middle Tennessee’s price growth has delivered to many recent FHA buyers within a few years.
What would an FHA payment be in Tennessee?
Choose FHA as the loan type and set the down payment to 3.5 percent. Add your county’s tax rate and insurance; the mortgage insurance line is the cost you are weighing against buying now.
The U.S. FHA market right now.
National average rates from the Federal Reserve Bank of St. Louis FRED database: the Freddie Mac survey for conventional and the Optimal Blue indices for FHA and VA, shown as third-party market benchmarks, not MortgagePros pricing. FHA note rates often look lower than conventional, but mortgage insurance is part of the real payment, so compare the whole payment rather than the rate.
FHA 30-year fixed, U.S. average
7.18%
Conventional 30-year fixed, U.S. average
7.40%
VA 30-year fixed, U.S. average
7.09%
Sources: Freddie Mac Primary Mortgage Market Survey (conventional, 30-year national average, week of Oct 8, 2026) and Optimal Blue Mortgage Market Indices (FHA and VA, 30-year national averages as of Oct 8, 2026), distributed through FRED, Federal Reserve Bank of St. Louis; the figures and dates refresh automatically from the source. These are third-party market benchmarks, not MortgagePros rates and not an offer of credit. Your rate and APR depend on your credit, loan type, property and lock date.
How an FHA loan works with us in Tennessee.
Four steps, one licensed pro, and a Tennessee closing near you.
1
Check the fit
A short call about your credit, savings and where you are buying. We tell you whether FHA, a conventional 3 percent down loan or a VA loan is the better route.
2
Pre-approval with real numbers
Income, assets and credit verified, with Tennessee taxes, insurance, HOA dues and both state taxes already in the estimate.
3
Property checks
We flag likely FHA appraisal items early and confirm any condo is on HUD’s approved list, so nothing stalls after you are under contract.
4
Close in Tennessee
At a title company or attorney’s office near you, or with a mobile notary. The transfer and recordation taxes are on the closing statement exactly as quoted.
Ready to see what FHA gets you in Tennessee?
A licensed pro quotes your FHA options with the transfer and recordation taxes, insurance and property taxes already in the numbers. Free, and it starts without a hard credit pull.
FHA in Tennessee, answered.
The questions Tennessee buyers ask us about FHA loans most. If yours is not here, a licensed pro will answer it directly, with no obligation.
What is the FHA loan limit in Nashville?
$694,450 for a one-unit home in 2026, shared by Davidson, Williamson, Rutherford, Sumner, Wilson, Cheatham and the other counties of the Nashville metro. Memphis, Knoxville, Chattanooga, Clarksville and most of the rest of the state are at $541,287. Two- to four-unit limits are higher.
What taxes does Tennessee charge on an FHA purchase?
Two: a transfer tax of $0.37 per $100 of the purchase price, which the buyer customarily pays, and a recordation tax of $0.115 per $100 of the mortgage above $2,000, paid by the borrower. On a $350,000 purchase with 3.5 percent down that is roughly $1,295 and $390. FHA allows the seller to cover both within the 6 percent concession limit.
Does an FHA Streamline refinance pay the recordation tax again?
Yes. The recordation tax is charged whenever a new mortgage is recorded, so a Streamline pays it on the new loan amount. There is no transfer tax on a refinance. We include it when we work out whether a Tennessee refinance pays for itself.
Does the mortgage insurance ever go away?
With 10 percent or more down, after 11 years. With less than 10 percent down, no: it stays for the life of the loan. The usual exit is refinancing into a conventional loan once you have 20 percent equity, and we plan for that from the start.
Who handles the closing in Tennessee?
Either a title company or a real estate attorney; Tennessee allows both. We work with closing agents across the state and recommend one near you if you do not have one. Signing can also be done with a mobile notary.
Do I have to come to Michigan?
No. Your licensed pro handles the loan by phone, email and e-signature, and the closing happens in Tennessee at a title company or attorney’s office near you. Our Tennessee licence is what allows us to lend here.
Talk to a Tennessee-licensed pro about FHA.
Tell us what you are looking to do and where in Tennessee. A licensed pro will call back, usually the same business day. Asking does not start a loan or require a hard credit pull.
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248-416-1361
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880 W. Long Lake Rd, Suite 300
Troy, Michigan 48098, just off I-75. Free parking.
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Tennessee Mortgage License 218217. NMLS #1925352. Rated 4.9 across 5,300+ Google reviews.