Down Payment Requirements by Loan Type for Middle TN Buyers (2026): Conventional, FHA, VA, USDA & Jumbo

In Middle Tennessee in 2026, the minimum down payment you need depends entirely on the loan program you qualify for: conventional loans start at 3% down (5% is common), FHA requires 3.5% down with a 580+ credit score, and both VA and USDA loans allow 0% down for qualifying buyers. Jumbo loans — needed when the loan amount exceeds the 2026 conforming limit of $832,750 — typically run 10% to 20% down. On a $500,000 home (the current Greater Nashville median single-family price), that works out to about $15,000 down on a conventional loan, $17,500 on FHA, or $0 on VA/USDA.

On top of any program minimum, the Tennessee Housing Development Agency (THDA) can layer on down-payment and closing-cost assistance — $6,000 forgivable or up to 5% of the sales price (capped at $15,000) — which can cover much of the down payment for eligible buyers. Below, our team breaks down each loan type with current rules, which Middle Tennessee areas can qualify for the zero-down USDA program, and worked dollar examples at the median price. We can't predict where rates or prices go next — but the down payment rules are concrete, and knowing them up front changes how you shop.

Conventional loans: 3% to 5% down

Conventional loans are the most common path for Middle Tennessee buyers and are not government-backed — they follow guidelines from Fannie Mae and Freddie Mac. First-time buyers can put as little as 3% down on a primary residence through programs like Fannie Mae's HomeReady and Freddie Mac's Home Possible; 5% is the typical minimum for repeat buyers.

Put down less than 20% and you'll pay private mortgage insurance (PMI) in your monthly payment. The upside: PMI on a conventional loan can be canceled at roughly 20% equity, unlike FHA mortgage insurance, which usually lasts the life of the loan. A conventional loan stays "conforming" — avoiding the stricter jumbo rules — as long as the loan amount is at or below the 2026 baseline conforming limit of $832,750 (FHFA, 2026).

Worked example at the Middle TN median

The median single-family home price across the Greater Nashville area held at $500,000 in 2026 (Greater Nashville REALTORS). On a $500,000 home:

• •3% down = $15,000
• •5% down = $25,000
• •10% down = $50,000
• •20% down = $100,000 (no PMI)

FHA loans: 3.5% down

FHA loans, insured by the Federal Housing Administration, are built for buyers with smaller down payments or lower credit scores. With a credit score of 580 or higher, you can buy with 3.5% down. If your score is between 500 and 579, the minimum jumps to 10% (FHA guidelines, 2026).

FHA loans carry an upfront mortgage insurance premium plus an annual premium in your monthly payment, and that insurance typically stays for the life of the loan unless you refinance into a conventional loan. There's also a borrowing ceiling: for 2026, the single-family FHA loan limit across the Nashville metro counties — Davidson, Williamson, Rutherford, Sumner, Wilson and Cheatham — is $694,450 (HUD/FHA, 2026).

Worked example at the Middle TN median

• •3.5% down on a $500,000 home = $17,500
• •FHA is often the most accessible option for buyers rebuilding credit or short on savings — but weigh the long-term mortgage-insurance cost against a 5% conventional loan.

VA loans: 0% down for those who served

VA loans, guaranteed by the U.S. Department of Veterans Affairs, are one of the strongest benefits available to eligible active-duty service members, veterans and certain surviving spouses. The headline features: no down payment required and no monthly mortgage insurance. Buyers pay a one-time VA funding fee instead, which can be financed into the loan and is waived for certain disabled veterans.

As a veteran-owned team serving a region with a deep military presence — from Fort Campbell families settling in Clarksville to veterans relocating across Sumner, Rutherford and Davidson counties — this is a benefit our team helps buyers use well. Zero down keeps your savings free for moving costs, inspections and reserves, which matters in a $500,000 market. And because buyer representation is often little or no cost — the seller usually covers it (negotiated, not automatic after the 2024 NAR changes) — using a dedicated advocate typically preserves your VA loan benefit.

USDA loans: 0% down in eligible rural Middle TN

USDA Rural Development loans also allow 0% down, and they're not just for farms. The catch is two-fold: the property must sit in a USDA-eligible area, and your household income must be at or below 115% of the area median income (USDA Rural Development, 2026).

Eligibility is address-specific — two homes a few minutes apart can land on opposite sides of the USDA boundary. Across Middle Tennessee, large portions of the outer counties qualify, including areas in Maury, Robertson, Wilson and Cheatham, plus rural pockets of Dickson, Cannon, Bedford and other outlying counties (USDA Rural Development, 2026). The cores of Nashville, Franklin and Murfreesboro generally do not. The only way to know for certain is to check a specific address.

• •Verify any address on the official USDA Property Eligibility Map at eligibility.sc.egov.usda.gov before you fall in love with a home.
• •Map eligibility is not a final determination — USDA confirms eligibility upon a complete application.
• •0% down on a $500,000 home keeps $0 of your cash tied up in the down payment, though USDA charges a guarantee fee and an annual fee that function like mortgage insurance.

Jumbo loans: typically 10% to 20% down

When your loan amount exceeds the 2026 conforming limit of $832,750, you move into jumbo-loan territory (FHFA, 2026). Jumbo loans aren't backed by Fannie Mae or Freddie Mac, so lenders set their own — generally stricter — terms: down payments commonly run 10% to 20% or more, with higher credit and cash-reserve expectations.

In Middle Tennessee, jumbo financing comes up most often in higher-priced Williamson County — Franklin, Brentwood, Nolensville — and luxury pockets of Davidson and Sumner counties. If you're shopping above roughly $900,000, ask your lender early whether your scenario is conforming (with a larger down payment) or jumbo, because it changes both your down payment and your qualifying math.

Worked example

• •10% down on a $1,000,000 home = $100,000
• •20% down on a $1,000,000 home = $200,000

Tennessee down-payment assistance: THDA Great Choice

Even with a low-down-payment loan, the cash can be the hardest part. The Tennessee Housing Development Agency (THDA) offers down-payment and closing-cost help through the Great Choice Plus second mortgage, paired with a Great Choice first loan, in two structures (THDA, 2026):

• •Deferred option: $6,000 as a forgivable second mortgage at 0% interest with no monthly payment — forgiven at the end of the 30-year term, but due in full if you sell or refinance before then.
• •Amortizing option: up to 5% of the sales price, capped at $15,000, repaid with a monthly payment over 30 years at the same rate as your first mortgage.

Key requirements: everyone on the loan needs a credit score of at least 640, and you must complete a THDA-approved homebuyer education course (THDA, 2026). There are also income and acquisition-cost limits. THDA raised its acquisition (purchase price) cap from $400,000 to $500,000 effective May 18, 2026 — meaningful in a market where the median single-family home sits right at $500,000 (THDA; WATE / Nashville-area reporting, 2026). Income limits vary by county and household size, with the most generous caps in counties such as Davidson, Williamson, Rutherford, Sumner and Wilson. Because THDA updates these limits periodically, confirm the current figure for your county before counting on it.

THDA Homeownership for the Brave (veterans)

For active-duty service members, veterans and certain National Guard members, THDA's Homeownership for the Brave program reduces the Great Choice interest rate by 0.5% and offers down-payment/closing-cost assistance through the Great Choice Plus second mortgage (THDA, 2026). This is separate from — and can be weighed alongside — a VA loan. Our team can help you compare the two paths to find the structure that fits your goals.

How much should you actually put down?

There's no single "right" number — it's a trade-off. A larger down payment lowers your monthly payment and can eliminate PMI on a conventional loan; a smaller one keeps cash in reserve for repairs and emergencies. A few principles our team uses with buyers:

• •Don't drain your savings to hit 20%. Reserves protect you after closing — 3%–5% conventional or 3.5% FHA can beat buying with nothing left in the bank.
• •If you qualify for VA or USDA, the zero-down benefit is real cash flexibility — but factor in the funding/guarantee fees.
• •Stack assistance where it fits: a low-down loan plus THDA can shrink your out-of-pocket dramatically.
• •Get fully underwritten, not just pre-qualified, before writing offers in a competitive corridor like Franklin, Mount Juliet or Hendersonville.

Buying new construction? Representation still matters

Many buyers are looking at new-construction communities in fast-growing areas like Spring Hill, Nolensville, Gallatin and Mount Juliet, where multiple builders are active. The same down payment rules apply, and some builders offer closing-cost incentives when you use a preferred lender. Even when buying directly from a builder, having your own representation matters: the on-site agent works for the builder, and our team works for you — reviewing the contract, the lender-incentive math, the warranty and the timeline. Buyer representation is often little or no cost, because the seller usually covers it (negotiated, not automatic after the 2024 NAR changes). We partner well with builders and listing agents; independent representation simply means someone is in your corner.

Frequently asked questions

How much down payment do I need to buy a house in Tennessee?

It depends on your loan. The 2026 minimums are 3% conventional, 3.5% FHA (with a 580+ score), and 0% for VA and USDA for qualifying buyers. On a $500,000 home that's roughly $15,000 (conventional), $17,500 (FHA), or $0 (VA/USDA). THDA assistance can cover much of that for eligible buyers.

Can I really buy with no money down in Middle Tennessee?

Yes, if you qualify for a VA loan (eligible service members and veterans) or a USDA loan (income-qualified buyers in a USDA-eligible area). USDA eligibility is address-specific, so verify the exact property on the USDA Property Eligibility Map before assuming it qualifies.

What's the income limit for THDA down payment assistance?

THDA income limits vary by county and household size, with the highest caps in counties such as Davidson, Williamson, Rutherford, Sumner and Wilson. The program also requires a 640+ credit score and a homebuyer education course, and the purchase price must fall under THDA's acquisition cap ($500,000 as of May 2026). Confirm current county figures before relying on them.

Is FHA or conventional better for a first-time buyer here?

Neither is universally better — it comes down to your credit, savings and how long you'll keep the loan. FHA can be easier to qualify for with a lower score, but its mortgage insurance often lasts the life of the loan. Conventional may cost less over time if you reach 20% equity and cancel PMI. Our team can run both scenarios side by side with a trusted local lender.