Tennessee FHA Loan Requirements 2026
This guide to Tennessee FHA loan requirements covers loan limits for every Tennessee county, credit score and down payment requirements, MIP costs, and how FHA financing pairs with THDA’s Great Choice assistance program.
FHA Loan Limits by Tennessee County (2026)
FHA loan limits are set by HUD and updated annually based on local median home prices. The 14 counties of the Nashville-Davidson-Murfreesboro-Franklin metro area have a higher limit; all other Tennessee counties sit at the national floor.
| County | 1-Unit | 2-Unit | 3-Unit | 4-Unit |
|---|---|---|---|---|
| Davidson (Nashville) | $1,029,250 | $1,317,650 | $1,592,700 | $1,979,350 |
| Williamson | $1,029,250 | $1,317,650 | $1,592,700 | $1,979,350 |
| Rutherford | $1,029,250 | $1,317,650 | $1,592,700 | $1,979,350 |
| Wilson | $1,029,250 | $1,317,650 | $1,592,700 | $1,979,350 |
| Sumner | $1,029,250 | $1,317,650 | $1,592,700 | $1,979,350 |
| Maury, Robertson, Cannon, Cheatham, Dickson, Hickman, Macon, Smith, Trousdale | $1,029,250 | $1,317,650 | $1,592,700 | $1,979,350 |
| Shelby (Memphis) | $541,287 | $693,050 | $837,700 | $1,041,125 |
| Knox (Knoxville) | $541,287 | $693,050 | $837,700 | $1,041,125 |
| Hamilton (Chattanooga) | $541,287 | $693,050 | $837,700 | $1,041,125 |
| Sullivan (Kingsport-Bristol) | $541,287 | $693,050 | $837,700 | $1,041,125 |
| Montgomery (Clarksville) | $541,287 | $693,050 | $837,700 | $1,041,125 |
| All other 74 TN counties | $541,287 | $693,050 | $837,700 | $1,041,125 |
Only the 14-county Nashville MSA has an elevated FHA limit. Cannon, Cheatham, Davidson, Dickson, Hickman, Macon, Maury, Robertson, Rutherford, Smith, Sumner, Trousdale, Williamson, and Wilson counties are all set to $1,029,250, based on a median sale price of $895,000 for the metro area. Every other Tennessee county, including Shelby (Memphis), Knox (Knoxville), and Hamilton (Chattanooga), sits at the $541,287 national floor. Limits are set per-county by HUD and updated annually; always confirm your exact county limit using HUD’s official FHA Mortgage Limits lookup tool before making an offer.
Tennessee FHA Loan Requirements Overview
| Requirement | Standard FHA | Notes |
|---|---|---|
| Credit score | 580 (3.5% down); 500–579 (10% down) | Most TN lenders require 620+; THDA Great Choice requires 640 |
| Down payment | 3.5% | Can combine with Great Choice Plus assistance |
| DTI ratio | Up to 57% with strong factors | 43% preferred |
| Primary residence | Required | Owner-occupied only |
| Property condition | Must meet FHA Minimum Property Standards | Applies statewide, including manufactured homes |
FHA Mortgage Insurance Premiums (MIP)
| MIP Type | Rate | On a $400,000 Loan |
|---|---|---|
| Upfront MIP (UFMIP) | 1.75% of loan amount | $7,000 (typically financed) |
| Annual MIP (monthly) | 0.55%/yr (30-yr, LTV 95%+) | ~$183/mo |
MIP cancellation: FHA MIP is permanent on loans originated after June 3, 2013, with less than 10% down payment. For Tennessee buyers who put down 10% or more, MIP cancels after 11 years. Many Tennessee borrowers refinance into a conventional loan once they reach 20% equity to eliminate MIP.
FHA vs. Conventional in Tennessee
| Factor | FHA | Conventional |
|---|---|---|
| Min credit score | 580 | 620 |
| Down payment | 3.5% | 3–20% |
| Mortgage insurance | MIP (permanent with <10% down) | PMI (cancels at 80% LTV) |
| Max loan limit (Nashville MSA) | $1,029,250 | Conforming limit applies ($832,750) |
| THDA Great Choice pairing | Yes — can cover down payment + some costs | Yes, via Freddie Mac HFA Advantage® — can cover down payment + some costs |
| Best for | Lower credit, gift/assistance funds, first-time buyers | 680+ credit, plans to cancel PMI, stronger assets |
THDA Great Choice + FHA Combination
Most THDA Great Choice loans are insured by FHA, making this one of the most popular combinations for Tennessee buyers. Here’s how it can work on a $350,000 purchase:
| Item | Amount |
|---|---|
| Purchase price | $350,000 |
| FHA down payment (3.5%) | $12,250 |
| Great Choice Plus assistance (amortizing option, up to 5%) | Up to $15,000 max |
| Net down payment from buyer | As low as $0 (assistance can cover down payment + some closing costs) |
The Great Choice Plus assistance amount depends on which option you choose — the Deferred Option caps at $6,000 or $10,000 with no monthly payment, while the Amortizing Option can reach 5% of the sales price (max $15,000) but adds a monthly payment. Confirm current terms at thda.org.
