VA Loans in Tennessee: Eligibility, Funding Fee and Limits
Who qualifies for a VA home loan, what the funding fee costs, who is exempt, and how VA compares with FHA and conventional loans.
Quick answer
A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible veterans, service members and some surviving spouses. With full entitlement you can buy with 0% down, there is no monthly mortgage insurance, and VA sets no loan limit.
Most borrowers pay a one-time VA funding fee, 2.15% on first use with less than 5% down, which can be financed. Veterans who receive VA disability compensation are exempt.
Program figures on this page were verified in October 2026. Program terms and eligibility are subject to VA and lender guidelines and may change.
At a glance: VA loans in Tennessee
- Who qualifies: veterans, active-duty members, Guard and Reserve, some surviving spouses
- Down payment: 0% with full entitlement
- Funding fee: 2.15% on first use with <5% down; waived for disabled veterans
- Loan limit: none with full entitlement
- Credit: no VA minimum; lenders commonly look for about 580–620
- Property: primary residence meeting VA minimum property requirements
Who is eligible for a VA home loan?
Eligibility is based on service, and VA confirms it with a Certificate of Eligibility (COE). Under VA’s rules, in general:
- Veterans who served after August 1990: 24 continuous months, or the full period you were called to active duty (at least 90 days), or less if discharged for a service-connected disability.
- Current active-duty service members: after 90 continuous days of service.
- National Guard and Reserve: six creditable years, or 90 days of qualifying active-duty service.
- Surviving spouses: of a service member who died in service or from a service-connected disability, in most cases if not remarried before age 57.
Discharge must be other than dishonorable. I can request your COE through the lender system, usually in minutes. See VA’s eligibility page for the full service tables. Eligibility is subject to VA guidelines and may change.
Do you need a down payment for a VA loan?
No, if you have full entitlement. VA guarantees part of the loan, so lenders can finance 100% of the price or appraised value, whichever is lower. You have full entitlement if you’ve never used your benefit, or if a past VA loan was paid off and the home sold, or entitlement was restored. With partial entitlement (a VA loan still open), a down payment may be needed on larger loans.
Putting 5% or 10% down lowers the funding fee. Sellers may pay your customary closing costs, plus concessions up to 4% of the home’s value for items such as prepaid taxes or paying off debts. Seller-paid closing costs and interested-party contributions vary by loan type and transaction; these limits are general examples and do not mean every type of cost or concession is permitted up to that percentage.
How much is the VA funding fee?
| Down payment | First use | Later use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% to less than 10% | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
| Interest Rate Reduction Refinance (IRRRL) | 0.5% | |
Purchase and construction loans. Source: VA funding fee and closing costs, rates effective April 7, 2023. Fees are subject to VA guidelines and may change.
You don’t pay the funding fee if you receive VA compensation for a service-connected disability (or would, except you receive retirement or active-duty pay instead), are a surviving spouse receiving Dependency and Indemnity Compensation, or are an active-duty member who has received a Purple Heart. A disability rating issued after closing can make you eligible for a refund.
Is there a VA loan limit in Tennessee?
Not with full entitlement. Since January 1, 2020, VA has not capped the amount it will guarantee for borrowers with full entitlement; the loan size is set by your income, debts and the appraisal. With partial entitlement, VA uses the county’s conforming limit to work out your remaining guaranty: $832,750 in most of Tennessee and $1,029,250 in the Nashville metro for 2026. See VA loan limits.
What credit score and income do you need for a VA loan?
VA does not set a minimum credit score. Lenders set their own, commonly around 580 to 620. VA’s underwriting uses two tests: a debt-to-income benchmark of 41%, which can be exceeded with strong compensating factors, and residual income, the cash left each month after the house payment, taxes and debts, measured against VA’s table for your family size and region. Program terms are subject to VA and lender guidelines and may change.
What kind of home can you buy with a VA loan?
A home you will live in as your primary residence, generally moving in within about 60 days of closing. That includes single-family homes, VA-approved condos, new construction, manufactured homes on a permanent foundation, and 2–4 unit properties when you live in one unit. A VA appraiser checks the home against VA’s minimum property requirements; problems such as a failing roof or unsafe wiring need repair before closing. Veterans can also build with a VA one-time-close construction loan, which I walk through in my WSGI One Street Over segment.
How does a VA loan compare with FHA and conventional?
| Feature | VA | FHA | Conventional |
|---|---|---|---|
| Minimum down | 0% (full entitlement) | 3.5% (580+) | 3% on some programs |
| Monthly mortgage insurance | None | Yes; life of loan with <10% down | PMI below 20% down; removable |
| Upfront fee | Funding fee 1.25%–3.3%; waived for disabled veterans | 1.75% upfront MIP | None |
| Loan limit | None with full entitlement | $541,287–$1,029,250 in TN | $832,750–$1,029,250 in TN |
| Property use | Primary residence | Primary residence | Primary, second home, investment |
Sources: VA.gov; HUD Mortgagee Letter 2023-05; FHFA 2026 conforming limits. Comparative costs depend on rate, fees, mortgage insurance, loan amount and lender pricing. Program terms are subject to agency and lender guidelines and may change.
What does a VA loan look like on a $350,000 home in Robertson County?
| Item | First use, 0% down | Exempt veteran, 0% down |
|---|---|---|
| Purchase price | $350,000 | $350,000 |
| Down payment | $0 | $0 |
| Funding fee, financed | $7,525 (2.15%) | $0 |
| Total loan amount | $357,525 | $350,000 |
| Monthly mortgage insurance | None | None |
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. Funding fee per VA’s schedule effective April 7, 2023; subject to VA 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.
What are the catches with a VA loan?
- The funding fee adds to your loan balance unless you are exempt or pay it in cash.
- Primary residence only; VA loans can’t buy a vacation home or a pure rental.
- The home must pass VA’s minimum property requirements, which can rule out some fixer-uppers.
- Your entitlement stays tied up while a VA loan is open unless a qualified veteran assumes it with their own entitlement.
- Lender overlays on credit score and debt ratios vary, so one lender’s “no” isn’t the final word.
VA loan FAQ
Can you use a VA loan more than once?
Yes. The benefit is reusable. Selling the home and paying off the loan restores your entitlement, and you can sometimes have two VA loans at once using remaining entitlement. Later uses with less than 5% down carry a 3.3% funding fee unless you are exempt. Terms are subject to VA and lender guidelines.
Can a surviving spouse get a VA loan?
Often, yes. A surviving spouse of a service member who died in service or from a service-connected disability may qualify, generally if not remarried, or remarried after age 57. Those receiving Dependency and Indemnity Compensation are exempt from the funding fee. VA confirms eligibility with a Certificate of Eligibility.
Do VA loans have PMI?
No. VA loans have no monthly mortgage insurance at any down payment. Instead, most borrowers pay the one-time funding fee, which can be financed into the loan and is waived for veterans receiving VA disability compensation. Fees are set by VA and may change.
Can the seller pay closing costs on a VA loan?
Yes. A seller can pay all of your customary closing costs, and separately up to 4% of the home’s value in concessions, such as prepaid property taxes or paying off a debt. Seller-paid closing costs and concessions vary by transaction and are subject to VA and lender guidelines.
Can you rent out a home bought with a VA loan?
You must intend to live in the home as your primary residence when you buy it. If you later move, for example on military orders, you can generally keep the loan and rent out the home. A 2–4 unit property works if you live in one unit.
Where these figures come from
| Figure | Source | As of |
|---|---|---|
| Service eligibility, COE | VA.gov, eligibility requirements | Retrieved Oct 26, 2026 |
| Funding fee, exemptions, closing costs | VA.gov, funding fee and closing costs | Rates effective Apr 7, 2023 |
| Loan limits and entitlement | VA.gov, loan limits | Retrieved Oct 26, 2026 |
| Purchase loan rules | VA.gov, purchase loan | Retrieved Oct 26, 2026 |
| Underwriting (DTI, residual income) | VA Lenders Handbook, M26-7 | Current handbook |
| 2026 conforming limits | FHFA conforming loan limits | Calendar year 2026 |
Related guides
- What is a VA loan? and USDA loan vs. VA loan.
- FHA, conventional, USDA and jumbo loan pages.
- Construction loans, including VA one-time close.
- VA loans in Clarksville, TN: Fort Campbell PCS timing, BAH as income, the funding fee exemption and Tennessee’s disabled-veteran tax relief.
- Montgomery County mortgage guide, home of Fort Campbell families.
- Living in or moving to the Nashville area? Start with my Nashville mortgage broker page.
- About Christopher Armantrout, the licensed originator who wrote this page.
Call me at (615) 671-9178. I’ll pull your Certificate of Eligibility, check whether you’re exempt from the funding fee, and lay out what you’d need at closing.
If it’s after hours, grab a time on my calendar, or 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 Opportunity
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.