Getting a Mortgage in Tennessee: 2026 Guide

The Nashville metro (Davidson, Williamson, Rutherford, Wilson, Sumner) anchors the fastest-growing major Tennessee market and has seen sharp price appreciation over the past several cycles. Williamson County (Franklin, Brentwood) carries the highest pricing.

Memphis (Shelby County) anchors the western Tennessee market with much lower price points and active FHA and first-time buyer activity. Knoxville (Knox County) anchors East Tennessee with steady University of Tennessee and Oak Ridge demand. Chattanooga (Hamilton County) and the Tri-Cities (Johnson City, Kingsport, Bristol) round out the state.

Heavy VA volume around Naval Support Activity Mid-South (Memphis area) and Fort Campbell (which straddles the Tennessee-Kentucky line in Christian County, KY and Montgomery County, TN) keeps VA loans a meaningful share of statewide activity. Tennessee has no state income tax.

For 2026, the conforming one-unit floor in Tennessee is $806,500 and the FHA one-unit floor is $524,225. The Nashville MSA counties carry slightly elevated FHA limits above the floor (but below the federal high-cost ceiling). Most other counties use the floor.

Higher-end Williamson and Davidson contracts can push into jumbo territory above the conforming cap. Across the rest of the state, the floor figures apply.

Tennessee's effective property tax rate runs around 0.67% of market value statewide, on the lower side of the national range. Local rates vary by county and city, with Davidson and Shelby counties running somewhat higher than rural counties.

Always pull the actual county tax line for the specific parcel rather than running a percentage of purchase price.

The Tennessee Housing Development Agency (THDA) runs the dominant first-time buyer first mortgage program family in the state. The Great Choice Home Loan pairs a discounted-rate first mortgage with optional Great Choice Plus down-payment assistance for income-eligible first-time buyers.

THDA also runs the Homeownership for the Brave program (enhanced terms for active-duty military, veterans, surviving spouses, National Guard, and Reservists) and the New Start Loan Program. Funding and parameters are reviewed periodically.

Tennessee has heavy eligible-veteran demand around Fort Campbell (Montgomery County, straddling the Kentucky line), Naval Support Activity Mid-South (Millington, Shelby County), and the broader Nashville and Memphis metros. The 2026 VA county loan limit in every Tennessee county matches the conforming baseline of $806,500.

VA funding fee on a no-down-payment first-time use is 2.15% of the loan amount; subsequent use without a down payment is 3.3%. Borrowers receiving VA disability compensation are exempt.

Plan for buyer-side closing costs of roughly 2 to 3% of the purchase price in Tennessee, plus prepaid escrows. Tennessee charges a real estate transfer tax of $0.37 per $100 of consideration on the deed plus a recordation tax on the mortgage of $0.115 per $100 of the loan amount; both are customarily paid by the buyer.

Standard purchase closings run 25 to 30 days. Tennessee is a deed-of-trust state with non-judicial foreclosure, which keeps timelines predictable.