2026 loan limits in Tennessee
Conforming (Fannie / Freddie)
$806,500 baseline · up to $943,000 in the Nashville metro
FHA loan limit
$524,225 (baseline counties)
up to $943,000 (Davidson, Williamson, and surrounding Nashville counties) in high-cost counties
What homes actually cost
Median home price: ≈ $335,000 statewide; well above that in Nashville
Roughly 37% of Tennessee households can afford the state median home statewide, but Nashville-area affordability is closer to a coastal market — the metro's high-cost loan limit exists for a reason.
Property taxes & insurance
Average effective property tax rate: ≈ 0.63% of assessed value
Tennessee assesses residential property at 25% of appraised value, which is why the effective rate looks low. There is no state income tax on wages, so the total tax picture is favorable, but Nashville-area reappraisals have moved bills sharply in recent cycles.
Average homeowners insurance: ≈ $2,400/year for a $400K home
Tennessee sits in a hail and severe-storm corridor, and West Tennessee carries meaningful earthquake exposure from the New Madrid seismic zone — earthquake coverage is a separate, optional policy that lenders generally do not require but many owners carry.
Down-payment assistance in Tennessee
THDA Great Choice Home Loan
Who: First-time buyers (and repeat buyers in targeted areas) under county income and price limits
What: A fixed-rate 30-year first mortgage with below-market pricing, required to access THDA assistance.
THDA Down Payment Assistance (Great Choice Plus)
Who: Great Choice borrowers
What: Either a 6% deferred option (0%, forgiven after 30 years) or a $6,000 amortizing second, depending on the product selected.
THDA Homeownership for the Brave
Who: Veterans, active-duty service members, reservists, and surviving spouses
What: A 0.5% interest-rate reduction on the Great Choice first mortgage, combinable with down-payment assistance.
Is buying in Tennessee right for you?
Closing customs in Tennessee
Title companies and closing attorneys both operate in Tennessee; either may close. Buyers typically pay their own closing costs, and the seller customarily pays the state transfer tax on the deed.
Frequently asked questions
What is the loan limit in Nashville?
The Nashville metro is a high-cost area in 2026, with a conforming and FHA limit up to $943,000 in Davidson, Williamson, and surrounding counties, compared with the $806,500 conforming and $524,225 FHA baselines elsewhere in the state.
How does THDA down-payment assistance work?
You take a Great Choice first mortgage, then add either 6% of the purchase price as a 0% second forgiven after 30 years, or a $6,000 second you pay down monthly. You must complete homebuyer education to use either.
Is there a state income tax in Tennessee?
No. Tennessee taxes no wage income, which raises your take-home pay relative to a same-salary job in a state that does — that is real qualifying power, since lenders use gross income but you live on net.
Loan programs in Tennessee
Related tools & guides
- The Complete First-Time Homebuyer's Readiness Guide
- How down payment assistance actually works
- FHA vs Conventional: Real cost comparison
- How much home you can actually afford
- All state homebuying guides
Run your numbers
Take what you just learned and apply it to your file.