# Can You Buy a Home With 0% Down in Tennessee?

Canonical URL: https://valor.mortgage/financing-a-home-with-0-down-payment/
Page title: Buying a Home With 0% Down in Tennessee | Valor Mortgage

By [Christopher Armantrout](https://valor.mortgage/about-us/), Licensed Mortgage Loan Originator · NMLS [#1210804](https://www.nmlsconsumeraccess.org/EntityDetails.aspx/INDIVIDUAL/1210804)
Published May 15, 2026 · Last updated October 26, 2026
Rules accurate as of October 2026

Quick answer

**Yes.** Eligible Tennessee buyers can buy a home with no down payment. VA loans (for eligible veterans and service members) and USDA loans (for eligible rural addresses under the income cap) finance 100% of the price. Anyone else can pair a low-down-payment FHA or conventional loan with THDA assistance or a family gift that covers the down payment.

Zero down isn’t zero cash: closing costs still have to be paid, credited by the seller or lender, or financed. Most assistance is a second mortgage with repayment conditions.

Program figures on this page were verified on September 15, 2026; USDA’s fiscal year 2027 fees and THDA’s assistance amounts were re-checked on October 26, 2026. Program terms and eligibility are subject to VA, USDA, HUD, THDA, Fannie Mae, Freddie Mac and lender guidelines and may change.

At a glance: 0% down in Tennessee

- **VA:** $0 down, no monthly mortgage insurance, 2.15% funding fee on first use unless exempt
- **USDA:** $0 down at an eligible address under the county income cap; 1% fee plus 0.35% a year
- **FHA or conventional + THDA:** assistance of $6,000–$15,000 can cover the 3%–3.5% down payment
- **Lender-paid 0% conventional:** no longer available
- **Closing costs:** still due; seller credits, lender credits and gifts can cover them
- **Fit:** works best if you plan to stay several years

## What are the exceptions and catches?

- **Zero down is not zero cash.** Closing costs, prepaid taxes and insurance, the appraisal and earnest money are still due unless a seller concession, lender credit, gift or assistance program covers them. See what still has to be paid.
- **Every zero-down program is for a primary residence.** None of them finance a rental or a second home.
- **VA and USDA charge a fee instead of a down payment.** The fee is usually financed, so the loan starts slightly above the price: 102.15% of the price on a first-use VA loan.
- **The appraisal has to hit the price.** With no down payment there’s no cushion; if the home appraises low, the gap is cash, a renegotiation or a dead contract.
- **USDA is decided by the address, not the county.** Davidson County has no eligible area, and Springfield, Clarksville, Gallatin, Hendersonville and Jackson are mostly or entirely ineligible even though the counties around them qualify.
- **Assistance is a lien on the house.** THDA’s deferred assistance is forgiven only after ten years; sell or refinance sooner and it is due in full.
- **The lender-funded 0% down conventional program this site used to describe is no longer offered.** See the note below.

## Which zero-down options exist in Tennessee?

| Program | Down payment | Who it is for | Upfront fee | Monthly fee or insurance | Strings attached |
|---|---|---|---|---|---|
| [VA loan](https://valor.mortgage/va-loans/) | $0 | Veterans, service members, Guard/Reserve, some surviving spouses | Funding fee 2.15% first use, 3.3% after; waived with VA disability compensation | None | Primary residence; no VA loan limit with full entitlement |
| [USDA guaranteed loan](https://valor.mortgage/usda-loan/) | $0 | Anyone under the county income cap buying in an eligible area | 1% guarantee fee (FY2027) | 0.35% a year on the balance | Address and household income both have to clear; primary residence; 30-year fixed only |
| FHA + [THDA Great Choice Plus](https://valor.mortgage/down-payment-assistance/), deferred | 3.5% from the buyer, of which $6,000–$10,000 can come from THDA | First-time buyers (or targeted areas), 640+ score, under THDA county limits | FHA 1.75% upfront MIP | FHA 0.55% a year | Second mortgage forgiven after 10 years, due in full if sold or refinanced sooner |
| FHA + THDA Great Choice Plus, amortizing | 3.5%, fully coverable by up to 5% / $15,000 from THDA | Same as above | FHA 1.75% upfront MIP | FHA 0.55% a year plus the second-mortgage payment | 30-year second mortgage at the first-mortgage rate |
| Conventional 3%-down (Fannie Mae 97% / HomeReady, Freddie Mac Home Possible, THDA HFA Advantage) + THDA assistance | 3%, coverable by up to 5% / $15,000 from THDA | Buyers under program income limits; no first-time rule on THDA HFA Advantage | None | Private mortgage insurance, priced by credit score, cancellable at 20% equity | THDA second mortgage on the same deferred or amortizing terms as above |
| [FHA alone](https://valor.mortgage/fha-loans/) (for comparison) | 3.5% | 580+ score | 1.75% upfront MIP | 0.55% a year | Not zero down without assistance |

Sources: VA funding fee schedule effective April 7, 2023; USDA Single Family Housing Guaranteed Loan Program fee structure, fiscal year 2027; HUD Mortgagee Letter 2023-05; THDA Great Choice Plus program page. Retrieved September 15, 2026. Program terms and eligibility are subject to THDA and lender guidelines and may change.

## How is a 100% VA or USDA loan actually structured?

The mechanics are the same for every VA and USDA purchase in Tennessee, so here they are on one home: $350,000, Robertson County, first-use VA on one line and USDA on the other.

| Line | VA, first use | USDA guaranteed |
|---|---|---|
| Purchase price | $350,000 | $350,000 |
| Down payment | $0 | $0 |
| Base loan | $350,000 | $350,000 |
| Program fee, financed | $7,525 (2.15% funding fee) | $3,535 (1% guarantee fee, calculated on the total loan) |
| Total note | $357,525 | $353,535 |
| Loan-to-value at closing | 102.15% | 101.01% |
| Monthly mortgage insurance | None | 0.35% of the loan balance per year ($1,237 in year one on this example, less each year as the balance declines) |

VA funding fee per VA.gov schedule effective April 7, 2023 (waived for veterans receiving VA disability compensation; 3.3% on subsequent use). USDA fees per the FY2027 fee structure (unchanged from FY2026) for the Single Family Housing Guaranteed Loan Program. Illustrative example only. Actual interest rates and APRs vary based on loan program, borrower qualifications, property, market conditions and other factors.

Three things follow from the table. The fee is *added to* the loan, not deducted from it, which is why the loan-to-value is above 100%; VA and USDA both allow that. The loan amount the appraisal has to support is the $350,000 price, not the $357,525 note. And because neither program has a down payment, your pre-approval should be sized on the fee-inclusive note, not the price, or the debt-to-income ratio will be a little off when the file hits underwriting.

Who can use each: VA requires qualifying military service (service thresholds below); USDA requires an eligible address and household income under the county cap (county-by-county eligibility and 2026 income limits). If you fit either, this is the simplest 0% down structure: one loan, one payment, no second lien on the house.

## Who qualifies for a zero-down VA loan?

The VA sets the service requirement, publishes it, and it is the same in Tennessee as everywhere else. Per [VA.gov](https://www.va.gov/housing-assistance/home-loans/eligibility/), you meet the minimum active-duty requirement if:

- You are currently serving and have completed **90 continuous days** of active duty.
- You are a veteran who served on or after August 2, 1990, with **24 continuous months**, or the full period you were called or ordered to active duty (at least 90 days), or 90 days if discharged under a qualifying exception, or any length of service if discharged for a service-connected disability.
- You served in the National Guard or Reserves with **90 days of non-training active duty**, or six creditable years and are still serving or were honorably discharged.
- You are the surviving spouse of a veteran and receive Dependency and Indemnity Compensation, or the veteran is missing in action or a prisoner of war.

Earlier service eras have their own thresholds (181 days for 1975–1990 peacetime service, 90 days for Vietnam, Korea and WWII). The proof is the Certificate of Eligibility; we pull it for you from your DD-214 or a statement of service, often the same day.

**Entitlement decides the down payment, not the price.** With full entitlement there has been no VA loan limit since January 1, 2020 (Blue Water Navy Vietnam Veterans Act of 2019). If a prior VA loan is still open, or was foreclosed and not repaid, you have partial entitlement and may need a down payment above the county conforming limit. That is worth settling before you shop.

**There is no down payment, but there is a funding fee, which may be financed into the loan.** Per the [VA funding fee schedule](https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/), effective April 7, 2023:

| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% to 9.99% | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |

The fee is waived entirely if you receive VA compensation for a service-connected disability (or are eligible for it but drawing retirement or active-duty pay instead), receive DIC as a surviving spouse, have a proposed or memorandum rating before closing, or are an active-duty Purple Heart recipient. The fee can be financed, and there is no monthly mortgage insurance of any kind on a VA loan.

The VA itself sets no minimum credit score. It relies on a residual-income test and a lender’s own overlay, which is why one lender declines a 590 and another closes it.

## Which Tennessee properties qualify for a USDA loan?

A USDA guaranteed loan is 100% financing for a primary residence, but the property has to sit inside a USDA Rural Development eligible area, and that is checked by street address on [USDA’s eligibility map](https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do), not by county name or zip code. In Middle and West Tennessee the picture looks like this, measured against USDA’s published ineligible-area boundaries:

| County | USDA-eligible? | Detail |
|---|---|---|
| [Davidson (Nashville)](https://valor.mortgage/mortgage-loans-davidson-county-tn/) | No | No eligible pocket anywhere in the county, including Belle Meade, Forest Hills and Oak Hill. |
| [Cheatham](https://valor.mortgage/mortgage-loans-cheatham-county-tn/) | Yes, countywide | 0% of the county’s land area is ineligible. The only fully eligible county in the Nashville metro. |
| [Robertson](https://valor.mortgage/mortgage-loans-robertson-county-tn/) | Mostly | About 2.4% of the county is ineligible, nearly all of it inside Springfield (roughly 79% of the city). Adams, Cedar Hill, Coopertown, Cross Plains, Greenbrier, Orlinda and White House are fully eligible. |
| [Sumner](https://valor.mortgage/mortgage-loans-sumner-county-tn/) | Mostly | About 15% of the county is ineligible, concentrated in the south. Hendersonville, Goodlettsville and Gallatin have to be checked address by address. |
| [Montgomery](https://valor.mortgage/mortgage-loans-montgomery-county-tn/) | Partly | Nearly all of Clarksville is ineligible; the surrounding county qualifies. |
| [Madison](https://valor.mortgage/mortgage-loans-madison-county-tn/) | Partly | The city of Jackson is essentially all ineligible; the rest of the county qualifies. |

Source: USDA Rural Development Single Family Housing ineligible-area boundaries, measured against U.S. Census Bureau city limits. Detail and methodology are on each county guide linked above.

The property also has to be a modest, existing or newly built single-family home (condos and manufactured homes only under specific conditions), with no income-producing land, and the loan is a 30-year fixed only. Passing the map is half the test; the other half is income.

## What income limits apply to a USDA loan in Tennessee?

USDA limits *adjusted household income* to 115% of the area median, published by county and household size under [7 CFR Part 3555](https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555). These are the current guaranteed-loan caps for the counties we work in most, pulled from USDA’s [income eligibility tool](https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do) on September 15, 2026:

| County | 1–4 person household | 5–8 person household |
|---|---|---|
| Robertson | $133,550 | $176,300 |
| Sumner | $133,550 | $176,300 |
| Cheatham | $133,550 | $176,300 |
| Davidson | $133,550 | $176,300 (no eligible property) |
| Montgomery | $122,800 | $162,100 |
| Madison | $122,800 | $162,100 |

Source: USDA Rural Development, Section 502 Guaranteed Rural Housing Loan Program maximum adjusted household income by county, retrieved September 15, 2026. USDA revises these limits periodically; we quote the live figure when we price your file.

Three things trip buyers up. The cap counts **every adult in the household**, including a parent or partner who is not on the loan. It is *adjusted* income, after USDA’s deductions for minor children, child care and certain elderly or disabled household members, so a household slightly over the gross figure can still qualify. And the cap is separate from the debt-to-income test used to size the loan, which runs on the borrowers’ income only.

## Is down payment assistance a grant or a second mortgage?

In Tennessee it is almost always a second mortgage. “Forgivable” is not the same as “free,” and the difference shows up the day you sell or refinance.

**THDA Great Choice Plus (Tennessee Housing Development Agency, statewide).** Assistance attached to a THDA Great Choice first mortgage, which itself is an FHA, VA, USDA or conventional loan. Per [THDA’s program page](https://thda.org/homebuyers/down-payment-assistance/), three structures are offered:

- **Deferred:** $6,000 or $10,000 (the amount depends on the first-mortgage product), 0% interest, no monthly payment, forgiven at the end of 10 years. If the home is sold or refinanced before then, the full amount is due.
- **Amortizing:** up to 5% of the sales price, maximum $15,000, repaid over 30 years at the same interest rate as the first mortgage.
- **New construction:** up to $25,000 on newly built or proposed construction, 15-year amortizing at 0% interest.

Requirements per [THDA](https://thda.org/homeownerships/eligibility-requirements-conditions/): a 640 credit score for everyone on the loan, completed homebuyer education, primary residence, and household income and purchase price under THDA’s county limits (Robertson County: $500,000 acquisition cost, $139,320 income for 1–2 persons and $162,540 for 3 or more, effective August 1, 2026). Program terms and eligibility are subject to THDA and lender guidelines and may change. The first-time-buyer rule (no ownership of a principal residence in the past three years) is waived in targeted counties and census tracts. THDA’s *Homeownership for Heroes* track gives military, veterans, first responders and teachers a reduced rate.

Is FHA plus THDA really zero down? Only when the assistance covers the whole 3.5%. On a $350,000 home FHA needs $12,250 down; the $6,000 deferred option leaves $6,250 for the buyer to bring, while the $15,000 amortizing option covers it but adds a monthly payment. Pair THDA assistance with a VA or USDA first mortgage instead and the loan is already 100% financed, so the assistance goes to closing costs.

**Conventional 3%-down loans (Fannie Mae, Freddie Mac, THDA HFA Advantage).** Fannie Mae’s 97% loan-to-value option and HomeReady, Freddie Mac’s Home Possible, and THDA’s Freddie Mac HFA Advantage conventional loan all allow 3% down on a primary residence, and THDA’s assistance (HFA Advantage Plus, in the same deferred or amortizing forms) can supply that 3%. The HFA Advantage route has no first-time-buyer requirement. Private mortgage insurance applies at 97% loan-to-value and is priced by credit score, but unlike FHA it can be cancelled once you reach 20% equity. Lender-funded “0% down” conventional programs with a lender-paid second lien have come and gone in the broker channel; the one this site previously described was withdrawn, and we will only quote a program that is available the day we price your file.

**What the two structures cost each month.** FHA charges an upfront mortgage insurance premium plus an annual premium for the life of the loan (HUD Mortgagee Letter 2023-05 sets the current rates). A conventional low-down-payment loan charges private mortgage insurance priced by your credit score, which you can cancel once you reach 20% equity. Depending on credit profile and lender pricing, conventional PMI may be more competitive for some higher-score borrowers, while FHA may be more competitive for some borrowers with lower scores. Which one actually costs less depends on your rate, the PMI or MIP quote, the loan amount, lender pricing and how long you keep the loan, so we run both for your file.

Before you accept any assistance, ask the three questions that decide whether it is worth it: what is the interest rate on the second lien, what event makes it due, and does it change the rate on the first mortgage.

## Is the 0% down conventional program with a lender-paid second lien still available?

No. Until September 2026 this page described a wholesale-lender program, offered through mortgage brokers, that paired a conventional first mortgage with a lender-funded second lien covering the down payment, with no monthly payment, due when the first mortgage was refinanced or paid off. That program has been withdrawn and we no longer offer it.

Lender-funded 0% down conventional programs come and go with the lender’s appetite; several have launched and closed since 2020. If a similar one becomes available again we will update this page with the program name, the lender, the eligibility rule and the repayment trigger. Until then, the conventional low-down-payment route works with THDA’s HFA Advantage Plus assistance, a family gift, or seller-paid closing costs, and the VA and USDA routes above remain true 100% financing.

## What closing costs still have to be paid on a zero-down loan?

All of them, unless someone else pays them. A zero-down loan removes the down payment and nothing else. On a Tennessee purchase you should expect:

- **Lender and third-party fees:** appraisal, credit report, underwriting, title search, lender’s title insurance, settlement fee, recording.
- **Tennessee realty transfer tax:** $0.37 per $100 of the purchase price under [Tenn. Code Ann. § 67-4-409](https://www.tn.gov/revenue/taxes/recordation-tax.html). On $350,000 that is $1,295. Custom in Tennessee puts it on the buyer, but it is negotiable.
- **Tennessee mortgage (indebtedness) tax:** $0.115 per $100 of loan amount above $2,000. On a $357,525 VA loan that is about $409.
- **Prepaids:** the first year of homeowners insurance, the initial escrow deposit for taxes and insurance, and interest from closing to the end of the month.
- **Earnest money and inspections:** paid before closing; earnest money is credited back at the table.
- **The program fee** (VA funding fee, USDA guarantee fee, FHA upfront MIP) if you choose to pay it in cash instead of financing it.

**Ways to cover them without cash.** Seller-paid closing costs and interested-party contributions vary by loan type and transaction. The limits below are general examples and do not mean every type of cost or concession is permitted up to that percentage.

| Source | Limit | Set by |
|---|---|---|
| Seller pays closing costs and concessions | General limits, each with its own definition of what counts: VA allows the seller to pay customary closing costs, with a separate 4% cap on concessions such as prepaids, the funding fee or debt payoff. FHA and USDA generally allow interested-party contributions up to 6% of the price. Conventional loans generally allow 3% when the down payment is under 10%. Which costs qualify under each cap is set by the agency and the lender. | VA Lenders Handbook (Pamphlet 26-7) ch. 8; HUD Handbook 4000.1; 7 CFR 3555; Fannie Mae Selling Guide B3-4.1-02 |
| Lender credit | Lender credits vary with the interest rate, loan program, lender pricing and market conditions. Ask us for the current pricing available for your scenario. | Lender pricing on the day |
| Gift from family | No cap on VA, FHA, USDA or conventional one-unit primary residences; documented with a gift letter and transfer trail | Each program’s guide |
| Financed into a USDA loan | Closing costs up to the amount by which the appraised value exceeds the price | 7 CFR 3555.103 |
| THDA assistance | Applied to closing costs as well as down payment, within the deferred or amortizing amount | THDA |

In practice, the Tennessee contract that makes a 0% down purchase work reads something like “seller to pay up to $X of buyer’s closing costs and prepaids,” with X set from our estimate before the offer is written, not negotiated after inspection. Ask for it in the offer; it is far harder to add later.

Two VA-specific protections: the lender’s flat charge is capped at 1% of the loan, and there is a list of fees a VA borrower may not pay at all. If a fee sheet on a VA purchase looks like a conventional one, ask why.

## What are the steps to a 0% down purchase, in order?

1. **Clear the eligibility layer first.** VA: we pull your Certificate of Eligibility from your DD-214 or statement of service. USDA: the exact address on [USDA’s map](https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do) and your household’s income against the county cap. THDA: county income and price limits, and the homebuyer-education class, which takes a few hours online and is required before closing.
2. **Credit pull and a real pre-approval.** Sized on the fee-inclusive note, with the program fee, taxes for the actual city (inside or outside city limits changes the escrow) and a real insurance quote. A pre-approval that ignores these is the one that falls apart in underwriting.
3. **Write the offer with the money built in.** Seller-paid closing costs up to the program cap, an appraisal contingency, and on VA the mandatory escape clause that lets you walk if the appraisal comes in low.
4. **Appraisal and property conditions.** VA has minimum property requirements (safe, sound, sanitary); USDA and FHA require well and septic testing on rural parcels and will not lend on income-producing acreage. Order these early; a failed water test late in the contract can jeopardize a rural 0% down closing.
5. **Underwriting.** Income, assets (including the gift trail and the seller-credit language), the second-mortgage approval if THDA is involved, and the Certificate of Eligibility or USDA conditional commitment.
6. **Closing.** Your cash to close depends on what was negotiated. With sufficient seller credits, lender credits, assistance and eligible financed costs, some borrowers may have very little cash required at closing. Without them, you pay closing costs and prepaids at closing, typically several thousand dollars on a $350,000 purchase, even with no down payment.

Recent examples in Middle Tennessee have commonly been approximately 30 to 35 days from contract for VA and FHA, and 35 to 45 for USDA, because the file also goes to USDA Rural Development for a conditional commitment after our underwriting. Underwriting and agency processing times are not guaranteed.

## How do the zero-down options compare over five years?

It depends on who you are, so here is the comparison on one Tennessee purchase: a $350,000 home in Robertson County, no down payment where the program allows it. The table isolates the program’s own cost (the fee or insurance it charges for letting you put nothing down). It does *not* show interest rates or payments, which differ by program and by borrower and are the other half of the answer.

| Program | Buyer’s cash toward down payment | Upfront fee (financed) | Annual fee or MI, first five years | Program cost, five years | Still owed later |
|---|---|---|---|---|---|
| VA, first use | $0 | $7,525 (2.15%) | $0 | **about $7,525** | Nothing |
| VA, funding fee waived | $0 | $0 | $0 | **$0** | Nothing |
| USDA guaranteed | $0 | $3,535 (1% of the $353,535 loan) | up to about $6,200 (0.35% of the balance: $1,237 in year one, and a little less each year as the balance declines) | **up to about $9,700** | Annual fee continues for the life of the loan |
| FHA + THDA deferred $6,000 | $6,250 (the rest of the 3.5%) | $5,911 (1.75% upfront MIP) | up to about $9,450 (0.55% of the balance: $1,890 in year one, and a little less each year as the balance declines) | **up to about $15,400** plus $6,250 cash | $6,000 second mortgage if sold or refinanced before year 10; MIP for the life of the loan |
| Conventional 97 + THDA deferred assistance | $4,500 (the rest of the 3%) | $0 | Private mortgage insurance; varies widely by credit score, cancellable at 20% equity | Depends on PMI | $6,000 second mortgage if sold or refinanced before year 10 |

Annual fee and MIP figures are calculated on the opening balance, so they are upper bounds; the actual charge falls a little each year as principal is repaid. No interest rate or payment is shown: illustrative example only, and actual interest rates and APRs vary based on loan program, borrower qualifications, property, market conditions and other factors. VA funding fee per VA.gov schedule effective April 7, 2023; USDA fees per FY2027 fee structure; FHA MIP per HUD Mortgagee Letter 2023-05 (base loan at or below $726,200, loan-to-value above 95%, 30-year term). Figures rounded.

On program fees alone the pattern holds across price points; the interest rate and, on conventional loans, the PMI quote can change the ranking. A veteran with the fee waived pays no program fee at all. A first-use veteran pays roughly $7,500 once and never a monthly insurance charge. A non-veteran at an eligible address under the income cap should compare USDA before settling on FHA-plus-assistance, because the FHA route generally costs more in insurance *and* leaves a second mortgage on the house. The conventional-plus-assistance route may come out ahead when the buyer’s credit score keeps PMI low and they plan to stay long enough to cancel it. We price all of the ones you qualify for side by side, with real rates, before you write an offer.

## What does 0% down cost compared with putting money down?

The honest comparison is not 0% versus 20%; almost nobody choosing between them has 20%. It is 0% versus a modest down payment. On the same $350,000 first-use VA purchase:

|  | 0% down | 5% down |
|---|---|---|
| Cash for down payment | $0 | $17,500 |
| Funding fee rate | 2.15% | 1.5% |
| Funding fee, financed | $7,525 | $4,988 |
| Total note | $357,525 | $337,488 |
| Difference in amount borrowed | $20,037 less borrowed, for $17,500 of cash |  |

Funding fee tiers per VA.gov: 2.15% under 5% down, 1.5% at 5% to 9.99%, 1.25% at 10% or more (first use). Illustrative example only. Actual interest rates and APRs vary based on loan program, borrower qualifications, property, market conditions and other factors. No payment is shown because it depends on the rate you qualify for.

In this illustration, putting 5% down reduces the amount borrowed (by $20,037: the $17,500 itself plus the $2,537 it shaved off the funding fee) and the VA funding-fee percentage, but requires $17,500 more upfront. Whether that tradeoff makes sense depends on your cash reserves and how long you expect to keep the loan.

## Is 0% down a bad idea?

Not by itself. A longer expected ownership period can make a 0%-down strategy easier to justify because you have more time to build equity and recover transaction costs; stable income and cash in reserve after closing matter for the same reason. For eligible borrowers, a 0% down VA or USDA loan can be one of the lowest-upfront-cost ways to purchase a home. Whether waiting to save a larger down payment makes sense depends on your expected timeline, cash reserves, market conditions and the cost of the available loan options.

It is a poor fit when you expect to move within two or three years. The loan starts slightly above the price, principal reduction is slow in the early years, and the cost of selling in Tennessee (agent commissions, which are negotiable, plus title and closing fees) can exceed the equity you have built. That is the scenario where a 0% down buyer writes a check to sell. If a move is realistic in that window, we talk about it before you buy, not after.

On a conventional loan the low down payment does have a price: private mortgage insurance and loan-level pricing adjustments at high loan-to-value. VA and USDA do not charge mortgage insurance tied to the down payment; their cost is the funding fee or guarantee fee. Those program fees are not based on whether you are a first-time buyer; the applicable fee depends on the program and borrower circumstances. Your interest rate on any of these programs depends on your qualifications and the market on the day you lock.

## Can a first-time buyer qualify for a zero-down loan with imperfect credit?

Often, yes. Each program draws the line in a different place:

| Program | Minimum credit score | Who sets it |
|---|---|---|
| VA | None set by the VA; most lenders 580–620 | Lender overlay; VA relies on residual income |
| USDA guaranteed | No published minimum; 640+ gets an automated (GUS) approval, below that manual underwriting with tighter ratios | USDA Rural Development, 7 CFR 3555 and lender overlay |
| THDA Great Choice / Great Choice Plus | 640 for everyone on the loan | THDA |
| FHA | 580 for 3.5% down; 500–579 requires 10% down (no longer zero-down) | HUD Handbook 4000.1, plus lender overlay |
| Conventional 3%-down + THDA assistance | 620 (Fannie Mae / Freddie Mac); 640 for THDA | Fannie Mae / Freddie Mac and THDA |

What matters more than the number, on every program, is the last twelve months: no late housing payments, no new collections, and a story for anything older. A 630 with a clean recent history is a stronger file than a 660 with a 60-day late in March. If you are a few points short, a rapid rescore (paying down a card balance and having the lender re-pull within a few weeks) can sometimes move a score past a program’s cutoff; results aren’t guaranteed. A simple first step is to let us pull your credit and tell you exactly where you stand against each of these lines before you spend a weekend at open houses.

## 0% down FAQ

### Do I have to be a first-time buyer to get 0% down?

No. VA and USDA loans have no first-time-buyer rule. THDA’s Great Choice Plus generally requires no home ownership in the past three years, but that is waived in targeted counties and for eligible veterans, and THDA’s HFA Advantage route has no first-time rule. Program terms are subject to agency, THDA and lender guidelines and may change.

### Can the seller pay all of my closing costs?

Often a large share, within each program’s limits. VA lets the seller pay customary closing costs plus up to 4% in concessions; FHA and USDA generally allow up to 6%, and conventional loans generally 3% with less than 10% down. Ask for it in the offer, since it is harder to add later.

### How do I know if a home qualifies for USDA?

Enter the exact street address on USDA’s property eligibility map; county or ZIP code isn’t enough. Then check your household’s adjusted income, counting every adult in the home, against the county cap. We check both before you write an offer.

### What happens if I sell a 0% down home after a few years?

Your loan starts slightly above the price and early payments are mostly interest, so selling costs can exceed the equity you’ve built within two or three years. A THDA deferred second is also due in full if you sell or refinance before year ten. Plan to stay several years.

### Is there any way to close with no cash at all?

With sufficient seller credits, lender credits, assistance and eligible financed costs, some borrowers may have very little cash required at closing. Earnest money and the inspection are usually paid before closing, though earnest money is credited back. Program terms are subject to agency and lender guidelines and may change.

## Where these figures come from

| Figure | Source | As of |
|---|---|---|
| VA service requirements, COE | [VA.gov, Eligibility requirements for VA home loan programs](https://www.va.gov/housing-assistance/home-loans/eligibility/) | Retrieved Sept 15, 2026 |
| VA funding fee table and exemptions | [VA.gov, VA funding fee and loan closing costs](https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/) | Rates effective Apr 7, 2023 |
| No VA loan limit with full entitlement | [VA.gov, VA home loan limits](https://www.va.gov/housing-assistance/home-loans/loan-limits/); Blue Water Navy Vietnam Veterans Act of 2019 | Effective Jan 1, 2020 |
| USDA program rules, 100% financing, income and property tests | [7 CFR Part 3555](https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555); [USDA RD Single Family Housing Guaranteed Loan Program](https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-guaranteed-loan-program) | Current regulation; FY2027 fee structure, re-checked Oct 26, 2026 |
| USDA eligible areas and income caps | [USDA Income and Property Eligibility site](https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do) | Retrieved Sept 15, 2026 |
| FHA 3.5% / 10% down by credit score | [HUD Single Family Housing Policy Handbook 4000.1](https://www.hud.gov/program_offices/housing/sfh/handbook_4000-1) | Current handbook |
| FHA upfront and annual MIP | [HUD Mortgagee Letter 2023-05](https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf) | Effective Mar 20, 2023 |
| THDA Great Choice Plus structures | [THDA, Down Payment Assistance](https://thda.org/homebuyers/down-payment-assistance/); [THDA, Eligibility Requirements & Conditions](https://thda.org/homeownerships/eligibility-requirements-conditions/) | Amounts re-checked Oct 26, 2026 |
| THDA county limits (Robertson) | [THDA Acquisition Cost & Income Limits by County](https://thda.org/homebuyers/) | Effective Aug 1, 2026 |
| Conventional 3%-down programs | [Fannie Mae Selling Guide](https://selling-guide.fanniemae.com/) (97% LTV and HomeReady); [THDA Freddie Mac HFA Advantage](https://thda.org/homeownerships/gc97-freddie-mac-hfa-advantage/) | Retrieved Sept 15, 2026 |
| Tennessee transfer and mortgage tax | [Tennessee Department of Revenue, Recordation Tax](https://www.tn.gov/revenue/taxes/recordation-tax.html); Tenn. Code Ann. § 67-4-409 | Current statute |
| VA seller concessions (4%), escape clause, closing-cost rules | [VA Lenders Handbook, Pamphlet 26-7](https://www.benefits.va.gov/warms/pam26_7.asp), chapter 8 | Current handbook |

The VA funding fee schedule runs through November 14, 2031; USDA fees are set each federal fiscal year (October 1); USDA and THDA income limits are revised periodically. We re-check the figures on this page on that schedule.

## Related guides

- [Tennessee first-time homebuyer programs](https://valor.mortgage/tennessee-first-time-homebuyer-programs/).
- [How much down payment do you need for a house?](https://valor.mortgage/how-much-of-a-down-payment-for-a-house-do-you-need/)
- [Closing costs vs. down payment](https://valor.mortgage/closing-costs-vs-down-payments/).
- [What is a VA loan, and who qualifies?](https://valor.mortgage/what-is-a-va-loan/)
- [Robertson County mortgage guide](https://valor.mortgage/mortgage-loans-robertson-county-tn/) and [Cheatham County mortgage guide](https://valor.mortgage/mortgage-loans-cheatham-county-tn/), the one Nashville-metro county that is USDA-eligible everywhere.
- [VA loans](https://valor.mortgage/va-loans/), [USDA loans](https://valor.mortgage/usda-loan/), [FHA loans](https://valor.mortgage/fha-loans/) and [down payment assistance](https://valor.mortgage/down-payment-assistance/) program pages.
- [About Christopher Armantrout](https://valor.mortgage/about-us/), the licensed originator who wrote this page.

## Want to know which 0% down option fits you? Talk to Valor Mortgage.

I’ll check your VA eligibility or the USDA map and income cap for your address, price the THDA routes you qualify for side by side, and tell you what you’d actually bring to closing before you write an offer.

[Call me at (615) 671-9178](tel:+16156719178). That’s the fastest way to get a straight answer on what you’d qualify for and which 0% down option fits you.

If it’s after hours, [grab a time on my calendar](https://valor.mortgage/book-your-appointment/). Pick a slot that works and I’ll call you then.

If your life is too chaotic for a phone call right now — I understand — [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.

---

## 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.