Quick answer
Yes. Eligible Tennessee buyers can purchase a home with no down payment using a VA loan, a USDA Rural Development loan, or down payment assistance layered on an FHA or conventional loan. VA eligibility depends primarily on military service; USDA eligibility depends on household income and the property address. Most assistance is a second mortgage with repayment conditions, so “zero down” does not always mean “no additional debt.”
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 VA funding fee (2.15% on first use) and the USDA guarantee fee (1% upfront plus 0.35% a year) are usually financed into the loan, so the loan is slightly larger than the price.
- USDA is decided by the address, not the county. Davidson County has no eligible area. 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 amortizing option is a 30-year second mortgage with its own monthly payment.
- Everything below is current as of September 2026. Fees, limits and program terms are set by the agencies and lenders named and change without notice.
Which zero-down options exist in Tennessee?
| Program | Down payment | Who it is for | Upfront fee | Monthly fee or insurance | Strings attached |
|---|---|---|---|---|---|
| VA loan | $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 | $0 | Anyone under the county income cap buying in an eligible area | 1% guarantee fee (FY2026) | 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, 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 (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 2026; 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.
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, 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, usually 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, 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, 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) | No | No eligible pocket anywhere in the county, including Belle Meade, Forest Hills and Oak Hill. |
| Cheatham | Yes, countywide | 0% of the county’s land area is ineligible. The only fully eligible county in the Nashville metro. |
| Robertson | 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 | Mostly | About 15% of the county is ineligible, concentrated in the south. Hendersonville, Goodlettsville and Gallatin have to be checked address by address. |
| Montgomery | Partly | Nearly all of Clarksville is ineligible; the surrounding county qualifies. |
| Madison | 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. These are the current guaranteed-loan caps for the counties we work in most, pulled from USDA’s income eligibility tool 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, 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: 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.
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.
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. 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 concessions. Limits vary by loan type and transaction, and the figures here are general examples; not every type of cost or concession is permitted up to each percentage. 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%; conventional loans generally allow 3% when the down payment is under 10%.
- Lender credit. A higher rate in exchange for a credit at closing. Lender credits vary with the interest rate, loan program, lender pricing and market conditions; ask us for the current pricing available for your scenario.
- USDA financing. If the appraisal comes in above the price, USDA lets closing costs be rolled into the loan up to the appraised value.
- Gift funds and assistance. Gifts from family are allowed on every program above; THDA’s assistance can be applied to closing costs as well as the down payment.
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.
Which zero-down option is cheapest 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 FY2026 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.
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 one card and re-pulling within a few weeks) routinely moves a 630 to 645. The cheapest first step is to let us pull the credit and tell you exactly where you stand against each of these lines before you spend a weekend at open houses.
Where these figures come from
Every figure on this page is taken from the agency or lender that publishes it. Here is the audit trail.
| Figure | Source | As of |
|---|---|---|
| VA service requirements, COE | VA.gov, Eligibility requirements for VA home loan programs | Retrieved Sept 15, 2026 |
| VA funding fee table and exemptions | VA.gov, VA funding fee and loan closing costs | Rates effective Apr 7, 2023 |
| No VA loan limit with full entitlement | VA.gov, VA home 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; USDA RD Single Family Housing Guaranteed Loan Program | Current regulation; FY2026 fee structure |
| USDA eligible areas and income caps | USDA Income and Property Eligibility site | Retrieved Sept 15, 2026 |
| FHA 3.5% / 10% down by credit score | HUD Single Family Housing Policy Handbook 4000.1 | Current handbook |
| FHA upfront and annual MIP | HUD Mortgagee Letter 2023-05 | Effective Mar 20, 2023 |
| THDA Great Choice Plus structures | THDA, Down Payment Assistance; THDA, Eligibility Requirements & Conditions | Retrieved Sept 15, 2026 |
| THDA county limits (Robertson) | THDA Acquisition Cost & Income Limits by County | Effective Aug 1, 2026 |
| Conventional 3%-down programs | Fannie Mae Selling Guide (97% LTV and HomeReady); THDA Freddie Mac HFA Advantage | Retrieved Sept 15, 2026 |
| Tennessee transfer and mortgage tax | Tennessee Department of Revenue, Recordation Tax; Tenn. Code Ann. § 67-4-409 | Current statute |
Last reviewed September 15, 2026 by Christopher Armantrout, NMLS #1210804. 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 every figure on this page on that schedule.
Related guides
- Robertson County mortgage guide: town-by-town USDA eligibility, 2026 loan limits and THDA limits for the county this example uses.
- Cheatham County mortgage guide: the one Nashville-metro county that is USDA-eligible everywhere.
- VA loans, USDA loans and down payment assistance program pages.
- How do you finance a home with 0% down?: how the loan is actually structured, where closing-cost money comes from, and the steps in order.
- Closing costs vs. down payments and how much down payment you actually need.
- About Christopher Armantrout, the licensed originator who wrote and reviews this page.
Call me at (615) 671-9178. That’s the fastest way to get a straight answer on what you’d qualify for and what both payments would actually look like for you.
If it’s after hours, grab a time on my calendar. 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 and I’ll review it and reach out with a plan.
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 Lender
724 S Main St, Springfield, TN 37172 · (615) 671-9178 · christopher@valor.mortgage · NMLS Consumer Access
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.