Tennessee USDA Loans 2026
This guide to Tennessee USDA loans covers eligible rural areas outside Nashville, Memphis, Knoxville, and Chattanooga — income limits, property eligibility, and how to qualify for zero-down USDA financing in Tennessee.
USDA-Eligible Areas in Tennessee
Tennessee’s major metropolitan areas — the urban cores of Nashville (Davidson County) and Memphis (Shelby County) in particular — are generally not USDA-eligible. However, large portions of rural and small-town Tennessee qualify, including many communities that sit surprisingly close to the state’s largest cities.
| Region | Eligibility Notes |
|---|---|
| Nashville urban core (Davidson County) | Confirmed not USDA-eligible |
| Memphis urban core (Shelby County) | Confirmed not USDA-eligible |
| Woodbury / Cannon County | Confirmed USDA-eligible — an example of a rural community within driving distance of Nashville |
| Outer Nashville MSA counties | Many outlying areas of the 14-county Nashville MSA retain rural eligibility outside incorporated city limits — verify each address individually |
| Rural Middle, East, and West Tennessee generally | Broad eligibility outside incorporated city limits of larger towns — verify each address individually |
Eligibility is determined address-by-address, not by county as a whole. Use the USDA property eligibility map at eligibility.sc.egov.usda.gov to verify any specific Tennessee property before proceeding.
USDA Income Limits in Tennessee (2026)
USDA income limits are set at 115% of Area Median Income and vary by county and household size. Because these figures are updated periodically and differ across Tennessee’s 95 counties, always confirm your household’s total income against the current limit for your specific county using the official USDA tool below before applying.
Check your exact county limit before applying. Rather than list figures that can change or vary by county, always confirm current Tennessee USDA income limits directly at the USDA Rural Development income limits tool. Income limits include ALL adult household members’ income, not just borrowers.
Tennessee USDA Loan Requirements Overview
| Requirement | USDA Standard | Notes | |
|---|---|---|---|
| Standard limit (most counties) | $122,800 | $162,100 | Verify your county with USDA |
Metro-area limits run higher than the standard. USDA publishes a higher moderate-income limit for many metropolitan counties, and those figures change on their own schedule. Rather than print numbers that may be out of date, check your exact county against USDA’s official lookup: USDA income eligibility tool. The authoritative source is HB-1-3555 Appendix 5 (FY 2026, PN 657, effective July 13, 2026).
Most Great Choice Home Loans are insured by FHA or USDA-Rural Development. THDA’s Great Choice Plus down payment assistance can be paired with a USDA-RD first mortgage, and Homeownership for Heroes allows qualifying veterans and first responders to finance up to 100% of the purchase price with a USDA-RD loan.
How to Apply for a Tennessee USDA Loan
- Verify property eligibility — Use eligibility.sc.egov.usda.gov to confirm the address is in a USDA-eligible area before proceeding.
- Calculate household income — Include ALL adult household members’ income, not just the borrowers’.
- Check income limits — Confirm your county’s current 115% AMI limit at the USDA Income Eligibility portal.
- Check credit score — 640+ for automated approval; some lenders offer manual underwriting below 640.
- Find a USDA-approved lender — Ask specifically whether the lender has active USDA experience in Tennessee’s rural markets, and whether they also participate in THDA’s Great Choice program.
- Get pre-approved — The lender submits your file to USDA’s Guaranteed Underwriting System (GUS) for an automated eligibility determination.
- Make an offer — Confirm USDA eligibility before going under contract. Tennessee closings are handled by title companies — no attorney required, though many buyers still choose to use one.
- USDA conditional commitment — After lender approval, USDA must issue a conditional commitment before closing. Factor in additional processing time (typically 2–5 business days).
