# FHA Loan Requirements in Tennessee: Credit, Limits and Mortgage Insurance

Canonical URL: https://valor.mortgage/fha-loans/
Page title: FHA Loan Requirements in Tennessee (2026) | Valor Mortgage

Credit, debt-to-income, income and property requirements, 2026 county limits for 1–4 units and what mortgage insurance costs, from a licensed Tennessee loan officer.

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By [Christopher Armantrout](https://valor.mortgage/about-us/), Licensed Mortgage Loan Originator · NMLS [#1210804](https://www.nmlsconsumeraccess.org/EntityDetails.aspx/INDIVIDUAL/1210804)
Last updated October 29, 2026
Checked against HUD Handbook 4000.1 and Mortgagee Letters · October 2026

Quick answer

An FHA loan is a mortgage insured by the Federal Housing Administration, part of HUD. In Tennessee you can buy with 3.5% down at a 580 credit score, or 10% down at 500–579. The home must be your primary residence, and the loan must fit your county’s FHA limit.

Every FHA loan carries mortgage insurance: 1.75% upfront plus an annual premium. With less than 10% down, the annual premium lasts for the life of the loan.

Program figures on this page were verified in October 2026, using 2026 loan limits. Program terms and eligibility are subject to HUD and lender guidelines and may change.

At a glance: FHA loans in Tennessee

- **Down payment:** 3.5% with a 580+ score; 10% with 500–579
- **Mortgage insurance:** 1.75% upfront, plus 0.50%–0.55% a year on most 30-year loans
- **2026 limit:** $541,287 in most counties; $1,029,250 in the Nashville metro
- **Requirements:** 580 credit for 3.5% down, 43% total debt benchmark, no income limit, primary residence only
- **Property:** 1–4 units, owner-occupied, meeting HUD property standards
- **Compared with conventional:** easier on credit; mortgage insurance is harder to remove

## How much do you need to put down on an FHA loan?

3.5% of the purchase price with a credit score of 580 or higher, under [HUD Handbook 4000.1](https://www.hud.gov/hud-partners/single-family-handbook-4000-1). Borrowers with scores from 500 to 579 need 10% down, and HUD does not insure loans for scores below 500. Lenders can set their own floor above HUD’s; some require 620 even on FHA.

The whole down payment can be a gift from a relative, employer, or approved nonprofit, documented with a gift letter stating that no repayment is expected. FHA can also be paired with [down payment assistance](https://valor.mortgage/down-payment-assistance/), including THDA’s Great Choice program. Program terms and eligibility are subject to HUD, THDA and lender guidelines and may change.

## How much is FHA mortgage insurance?

FHA mortgage insurance (MIP) has two parts, set by [HUD Mortgagee Letter 2023-05](https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf):

- **Upfront premium:** 1.75% of the base loan amount, usually added to the loan rather than paid in cash.
- **Annual premium:** on a 30-year loan of $726,200 or less, 0.55% of the balance a year with less than 5% down, or 0.50% with 5% or more down, collected in your monthly payment. Larger loans pay 0.70%–0.75%; 15-year loans pay 0.15%–0.65%.
- **How long it lasts:** with 10% or more down, the annual premium ends after 11 years. With less than 10% down, it stays for the life of the loan. Many owners later [refinance into a conventional loan](https://valor.mortgage/rate-term/) once they have enough equity, which depends on qualifying at that time.

HUD can change premiums, and your Loan Estimate shows the exact amounts. Program terms are subject to HUD and lender guidelines and may change.

## What are the FHA loan requirements in Tennessee?

FHA rules are federal, so the requirements are the same in every Tennessee county. Only the loan limit changes from county to county. These are HUD’s standards under [HUD Handbook 4000.1](https://www.hud.gov/hud-partners/single-family-handbook-4000-1); individual lenders can add stricter ones.

### Credit score and down payment

580 or higher for the 3.5% minimum down payment; 500–579 with 10% down. Below 500, HUD will not insure the loan. Many lenders set their own floor between 580 and 620.

### Debt-to-income ratio

HUD’s benchmark is 31% of gross monthly income for the housing payment and 43% for all monthly debts. Those are the limits for manually underwritten loans. Most FHA loans go through automated underwriting, which can approve higher ratios when the file has compensating factors such as cash reserves or a strong credit history.

### Income and employment

FHA has no income limit; you can earn any amount and still use an FHA loan. What HUD looks for is stable income, typically a two-year work history with any gaps explained. Self-employed borrowers generally need two years of tax returns. If you pair FHA with [THDA down payment assistance](https://valor.mortgage/down-payment-assistance/), THDA’s own county income limits do apply.

### Residency

U.S. citizens and lawful permanent residents. Under [HUD Mortgagee Letter 2025-09](https://www.hud.gov/sites/dfiles/OCHCO/documents/2025-09hsgml.pdf), non-permanent residents are no longer eligible for new FHA case numbers.

### Occupancy

You must live in the home as your primary residence, generally moving in within 60 days of closing. FHA does not finance vacation homes or investment property.

### Bankruptcy and foreclosure

Generally two years after a Chapter 7 bankruptcy discharge and three years after a foreclosure, with shorter periods in documented hardship cases. Delinquent federal debt, such as a past-due student loan, must be resolved before closing.

### Condos

The condo project must be on [HUD’s FHA-approved condominium list](https://entp.hud.gov/idapp/html/condlook.cfm), or the individual unit may qualify through HUD’s single-unit approval process. Ask before you make an offer, because many condo projects are not on the list.

Program terms and eligibility are subject to HUD and lender guidelines and may change.

## What is the FHA loan limit in Tennessee for 2026?

$541,287 for a single-family home in most Tennessee counties, and $1,029,250 in the 14-county Nashville metro. Limits are higher for 2–4 unit properties you live in.

| Property | Most Tennessee counties | Nashville metro |
|---|---|---|
| 1 unit | $541,287 | $1,029,250 |
| 2 units | $693,050 | $1,317,650 |
| 3 units | $837,700 | $1,592,700 |
| 4 units | $1,041,125 | $1,979,350 |

Source: [HUD FHA Mortgage Limits lookup](https://entp.hud.gov/idapp/html/hicostlook.cfm), calendar year 2026 (Knox County and Davidson County records, last revised Jan 1, 2026). The Nashville–Davidson–Murfreesboro–Franklin metro covers Cannon, Cheatham, Davidson, Dickson, Hickman, Macon, Maury, Robertson, Rutherford, Smith, Sumner, Trousdale, Williamson and Wilson counties. 2027 limits are typically announced in late November.

### FHA limits in Tennessee’s larger markets

| Market | County | 2026 FHA limit, 1 unit | Local guide |
|---|---|---|---|
| Nashville | Davidson | $1,029,250 | [Nashville](https://valor.mortgage/nashville-mortgage-broker/) · [Davidson County](https://valor.mortgage/mortgage-loans-davidson-county-tn/) |
| Franklin | Williamson | $1,029,250 | [Williamson County](https://valor.mortgage/mortgage-loans-williamson-county-tn/) |
| Murfreesboro | Rutherford | $1,029,250 | [Rutherford County](https://valor.mortgage/mortgage-loans-rutherford-county-tn/) |
| Springfield | Robertson | $1,029,250 | [Robertson County](https://valor.mortgage/mortgage-loans-robertson-county-tn/) |
| Clarksville | Montgomery | $541,287 | [Clarksville](https://valor.mortgage/clarksville-mortgage-broker/) · [Montgomery County](https://valor.mortgage/mortgage-loans-montgomery-county-tn/) |
| Knoxville | Knox | $541,287 | [Knoxville](https://valor.mortgage/knoxville-mortgage-broker/) · [Knox County](https://valor.mortgage/mortgage-loans-knox-county-tn/) |
| Chattanooga | Hamilton | $541,287 | [Chattanooga](https://valor.mortgage/chattanooga-mortgage-broker/) · [Hamilton County](https://valor.mortgage/mortgage-loans-hamilton-county-tn/) |
| Memphis | Shelby | $541,287 | [Memphis](https://valor.mortgage/memphis-mortgage-broker/) · [Shelby County](https://valor.mortgage/mortgage-loans-shelby-county-tn/) |
| Jackson | Madison | $541,287 | [Jackson](https://valor.mortgage/jackson-tn-home-loans/) · [Madison County](https://valor.mortgage/mortgage-loans-madison-county-tn/) |

Source: HUD FHA Mortgage Limits lookup, calendar year 2026. Each county guide also covers USDA eligibility, property taxes and THDA limits for that county.

From my files

### The student loan that almost stopped an FHA purchase

This year, a client came to me after being denied elsewhere. On paper the problem looked like a low credit score. The real issue was a delinquent federal student loan. They had moved, never updated their billing address, and every notice went to the old one. It was still their responsibility, and you can’t close an FHA loan with delinquent federal debt.

We didn’t rush back to underwriting. We got them current with the Department of Education first, cleaned up the smaller credit issues, and leaned on their strengths: a down payment of more than ten percent. It took several months of steady work, but they got the home. The first lender never saw that path, because they stopped at the credit score.

## What kind of home can you buy with an FHA loan?

Single-family homes, FHA-approved condos, manufactured homes on a permanent foundation that meet HUD rules, and 2–4 unit properties when you live in one unit. The FHA appraiser checks HUD’s minimum property standards for safety, security and soundness, so peeling paint, missing handrails or a failing roof may need repair before closing. FHA’s 203(k) loan can finance the purchase and repairs together.

Sellers can contribute up to 6% of the price toward your closing costs, prepaid items and discount points. Seller-paid closing costs and interested-party contributions vary by loan type and transaction; this limit is a general example and does not mean every type of cost or concession is permitted up to that percentage.

## Is an FHA loan better than a conventional loan?

It depends on your credit, down payment and how long you plan to keep the loan. FHA is often more forgiving on credit and debt ratios; conventional mortgage insurance can be removed once you reach enough equity.

| Feature | FHA | Conventional |
|---|---|---|
| Minimum down | 3.5% (580+) | 3% on some programs; 5% common |
| Credit | 580 for 3.5% down; 500 with 10% down | About 620+ at most lenders |
| Mortgage insurance | 1.75% upfront plus annual premium; life of loan with <10% down | PMI below 20% down; can be canceled at 80% of original value |
| Seller contributions | Up to 6% | 3% with <10% down; 6%–9% with more |
| Property use | Primary residence only | Primary, second home or investment |
| Assumable | Yes, by a qualified buyer | Generally no |

Sources: HUD Handbook 4000.1; HUD Mortgagee Letter 2023-05; Fannie Mae Selling Guide B3-4.1-02. Comparative costs depend on rate, mortgage insurance, loan amount, lender pricing and how long you keep the loan. Program terms are subject to agency and lender guidelines and may change.

## What does an FHA loan look like on a $350,000 home in Robertson County?

| Item | Amount |
|---|---|
| Purchase price | $350,000 |
| Down payment (3.5%) | $12,250 |
| Base loan amount | $337,750 |
| Upfront MIP (1.75%), financed | $5,911 |
| Total loan amount | $343,661 |
| Annual MIP (0.55%), first year | About $1,858 |
| 2026 FHA limit, Robertson County | $1,029,250, so the loan fits |

Illustrative example only. Actual interest rates and APRs vary based on loan program, borrower qualifications, property, market conditions and other factors. Closing costs, prepaid taxes and insurance are not included. Premiums per HUD Mortgagee Letter 2023-05; subject to HUD and lender guidelines and may change.

To try your own numbers, including the property tax for a specific Tennessee address, use the [Tennessee mortgage calculator](https://valor.mortgage/mortgage-calculator/).

## How do Tennessee property taxes and flood insurance affect an FHA loan?

FHA loans collect property taxes and homeowners insurance in an escrow account, so both are part of what you qualify for. In Tennessee, a home is taxed on 25% of its appraised value, multiplied by the combined county and city rate per $100 of assessed value, as described by the [Tennessee Comptroller](https://comptroller.tn.gov/office-functions/pa/tax-resources/assessment-information-for-each-county/property-tax-rates.html). The rate changes a lot across county and city lines, which is why each of the county guides above shows a worked tax example.

If the home sits in a FEMA Special Flood Hazard Area (zones beginning with A or V), FHA requires flood insurance for the life of the loan. Check any address on [FEMA’s Flood Map Service Center](https://msc.fema.gov/portal/search) before you make an offer, especially near the Cumberland, Harpeth, Stones and Mississippi rivers.

## What are the catches with an FHA loan?

- With less than 10% down, the annual premium never drops off on its own; removing it usually means refinancing.
- The upfront premium raises your loan balance on day one.
- Primary residence only, and you generally can’t hold two FHA loans at once except in limited cases such as relocation.
- Homes needing safety or structural repairs may not pass the FHA appraisal without fixes.
- The county limit caps the loan; in most counties outside the Nashville metro that is $541,287.

## FHA loan FAQ

### What credit score do you need for an FHA loan in Tennessee?

HUD’s minimum is 580 for 3.5% down and 500 for 10% down. Many lenders add their own minimum, often 580 to 620, so the score that works depends on where the loan is placed. Program terms and eligibility are subject to HUD and lender guidelines and may change.

### Does FHA have an income limit in Tennessee?

No. FHA has no maximum income anywhere in Tennessee; HUD only requires income that is stable and enough to support the payment. Income limits apply only if you add a program such as THDA Great Choice down payment assistance, which sets its own county limits. Program terms are subject to HUD, THDA and lender guidelines and may change.

### What is the FHA loan limit in Nashville for 2026?

$1,029,250 for a single-family home in Davidson County and the rest of the 14-county Nashville metro, including Williamson, Rutherford, Sumner, Wilson and Robertson. A duplex limit is $1,317,650. Most counties outside the metro, including Knox, Shelby and Hamilton, are at $541,287. Limits are set by HUD each calendar year.

### Do you have to be a first-time buyer to get an FHA loan?

No. FHA loans are open to repeat buyers too, as long as the home will be your primary residence and you meet credit, income and loan-limit rules. You generally can’t hold two FHA loans at the same time, with exceptions such as a job relocation.

### Can you get rid of FHA mortgage insurance?

With 10% or more down, the annual premium ends after 11 years. With less than 10% down, it lasts for the life of the loan, so the usual route is refinancing into a conventional loan once you have enough equity and qualify. Premiums are set by HUD and may change.

### Can you buy a duplex with an FHA loan?

Yes. FHA finances 2–4 unit properties with the same 3.5% minimum down payment, as long as you live in one of the units. The loan must fit the county’s multi-unit FHA limit ($693,050 for a duplex in most Tennessee counties, $1,317,650 in the Nashville metro), and rental income from the other units may help you qualify. Terms are subject to HUD and lender guidelines.

### Can a family member give you the down payment for an FHA loan?

Yes. FHA allows the entire down payment and closing costs to come from a gift by a relative, employer, close friend with a documented relationship, or approved nonprofit. The donor signs a gift letter stating no repayment is expected, and the transfer of funds must be documented.

> Chris was nothing short of amazing. He made purchasing our home as painless as possible, going above and beyond to make sure we understood what was happening during each step of the process.

Jennifer Newman

[Read on Google](https://g.page/r/CcD1xBszyqdwEAE/review)

## Where these figures come from

| Figure | Source | As of |
|---|---|---|
| Down payment, credit, debt ratios, property standards | [HUD Single Family Housing Policy Handbook 4000.1](https://www.hud.gov/hud-partners/single-family-handbook-4000-1) | Current handbook |
| Upfront and annual MIP | [HUD Mortgagee Letter 2023-05](https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf) | Effective Mar 20, 2023 |
| Residency requirement | [HUD Mortgagee Letter 2025-09](https://www.hud.gov/sites/dfiles/OCHCO/documents/2025-09hsgml.pdf) | Issued Mar 26, 2025 |
| 2026 FHA limits by county, 1–4 units | [HUD FHA Mortgage Limits lookup](https://entp.hud.gov/idapp/html/hicostlook.cfm) | Calendar year 2026, checked Oct 29, 2026 |
| FHA-approved condo projects | [HUD condominium approval list](https://entp.hud.gov/idapp/html/condlook.cfm) | Live lookup |
| Property tax assessment (25% residential) | [Tennessee Comptroller, property tax rates by county](https://comptroller.tn.gov/office-functions/pa/tax-resources/assessment-information-for-each-county/property-tax-rates.html) | Retrieved Oct 29, 2026 |
| Flood zones | [FEMA Flood Map Service Center](https://msc.fema.gov/portal/search) | Live lookup |
| FHA loan basics | [CFPB, FHA loans](https://www.consumerfinance.gov/owning-a-home/loan-options/fha-loans/) | Retrieved Oct 26, 2026 |
| Conventional seller-contribution limits | [Fannie Mae Selling Guide B3-4.1-02](https://selling-guide.fanniemae.com/sel/b3-4.1-02/interested-party-contributions-ipcs) | Retrieved Oct 26, 2026 |

## Related guides

- [Conventional](https://valor.mortgage/conventional-loans/), [VA](https://valor.mortgage/va-loans/), [USDA](https://valor.mortgage/usda-loan/) and [jumbo](https://valor.mortgage/jumbo-loans/) loan pages.
- [What are the different types of home loans?](https://valor.mortgage/what-are-the-different-types-of-home-loans/)
- [Tennessee first-time homebuyer programs](https://valor.mortgage/tennessee-first-time-homebuyer-programs/) and [down payment assistance](https://valor.mortgage/down-payment-assistance/).
- [Robertson County mortgage guide](https://valor.mortgage/mortgage-loans-robertson-county-tn/) with 2026 limits.
- [Tennessee mortgage calculator](https://valor.mortgage/mortgage-calculator/) with an address-level property tax estimate.
- Buying or refinancing around Music City? See my [Nashville, TN mortgage broker](https://valor.mortgage/nashville-mortgage-broker/) page.
- [About Christopher Armantrout](https://valor.mortgage/about-us/), the licensed originator who wrote this page.

[Call me at (615) 671-9178](tel:+16156719178). I’ll tell you whether FHA or conventional fits your credit and down payment, and what the mortgage insurance would look like on your loan.

If it’s after hours, [grab a time on my calendar](https://valor.mortgage/book-your-appointment/), or [start an application](https://valor.mortgage/purchase/) and I’ll review it and reach out with a plan.

About the author

[Christopher Armantrout](https://valor.mortgage/about-us/)

Owner & Senior Loan Officer, Valor Mortgage NMLS #1210804

Christopher is a licensed Mortgage Loan Originator in the State of Tennessee and has been originating home loans since 2015. He founded Valor Mortgage in Springfield in 2019 and works with veterans, first-time buyers, self-employed borrowers, and families across Robertson County and Middle Tennessee.

[More about Christopher](https://valor.mortgage/about-us/) [Verify this license on NMLS](https://www.nmlsconsumeraccess.org/EntityDetails.aspx/INDIVIDUAL/1210804)

**Valor Mortgage, LLC** · Christopher Armantrout, Mortgage Loan Originator, NMLS #1210804 · Valor Mortgage, LLC is powered by Encore Lending Group, LLC, NMLS #1249911 · Licensed in Tennessee · Equal Housing Opportunity
724 S Main St, Springfield, TN 37172 · (615) 671-9178 · christopher@valor.mortgage · [NMLS Consumer Access](https://www.nmlsconsumeraccess.org/EntityDetails.aspx/INDIVIDUAL/1210804)

The dollar figures on this page are illustrative examples for general information only and are not an offer, a rate quote, or a commitment to lend. Actual interest rates and APRs vary based on loan program, borrower qualifications, property, market conditions and other factors. Program fees, limits and terms are set by the agencies named above and change without notice; all loans are subject to credit approval, income verification and property appraisal. Not all applicants will qualify.

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## Contact Valor Mortgage

- Christopher Armantrout, Senior Loan Officer, NMLS #1210804
- Phone: [(615) 671-9178](tel:+16156719178)
- Email: [christopher@valor.mortgage](mailto:christopher@valor.mortgage)
- Office: 724 S Main St, Springfield, TN 37172
- [Book an appointment](https://valor.mortgage/book-your-appointment/) · [Apply online](https://valor.mortgage/home-application/) · [Contact page](https://valor.mortgage/contact-us/)

Valor Mortgage, LLC is powered by Encore Lending Group, LLC, NMLS #1249911 ([NMLS Consumer Access](https://www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/1249911)). Christopher Armantrout, Loan Officer, NMLS #1210804. Licensed in Tennessee. Equal Housing Opportunity.

All loan programs, rates, terms, and conditions are subject to change without notice. Loan approval is based on borrower qualification, credit review, income verification, and property eligibility. Not all applicants will qualify. Not a commitment to lend.