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    FHA Loan Requirements in Tennessee

    Updated: October 8 2026 • 11 min read
    Written by Bennett Leckrone
    Bennett Leckrone

    Written by
    Bennett Leckrone
    Writer / Reviewer / Expert

    Bennett Leckrone is the editorial manager and an analyst for Lower. He specializes in making complicated mortgage topics accessible for consumers. That includes both in-depth product guides and analysis on what economic moves mean for homebuyers and refinancers. He is also a licensed loan officer in Ohio, NMLS ID 2782574. He was previously a business reporter with a focus on higher education and fintech at BestColleges. In that role, he reported on the development of fintech and AI curriculum, as well as the rapidly changing nature of finance education. He also wrote guides to help business students navigate AI and online education. He also reported on state politics at Maryland Matters, with a focus on how policy affected people and businesses. He holds a bachelor of science in journalism degree from Ohio University.
    Our Editorial Standards

    Key Takeaways

    • The Nashville area has Tennessee's highest 2026 FHA loan limit at $1,029,250 for a single-family home.
    • Most of Tennessee, including Knoxville, Memphis, Chattanooga and Clarksville, uses the standard $541,287 FHA limit.
    • FHA loans are generally for primary residences and can finance eligible homes with one to four units.
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    Tennessee has one of the widest FHA loan-limit gaps in the country. Most counties use the standard national limit, while the Nashville area allows nearly twice as much FHA borrowing for a single-family home.

    The basic FHA loan requirements are the same statewide. Your lender will review your credit, income, debts, available funds and the property itself when deciding whether you qualify.

    Tennessee FHA Loan Basics

    Requirement What Tennessee Buyers Should Know
    2026 loan limits $541,287 in most counties and $1,029,250 across the Nashville FHA market for a single-family home
    Minimum down payment As little as 3.5% with a credit score of 580 or higher
    Credit scores from 500 to 579 Generally require at least 10% down
    Income limit FHA does not set a maximum income limit
    Occupancy You generally need to use the home as your primary residence
    Mortgage insurance Upfront and annual FHA mortgage insurance generally apply

    Meeting FHA's minimum credit score or down payment guidelines does not guarantee approval. Lenders can set stricter requirements and will consider your overall finances.

    FHA Home Loan Rates in Tennessee for 2026

    FHA mortgage rates change with the broader market and can vary based on your credit, loan amount, down payment, discount points and when you lock your rate.

    When comparing offers, look at the APR and points along with the interest rate. A lower rate may require more money upfront, so the better option can depend on how long you expect to keep the mortgage.

    Your total housing payment also depends on property taxes and homeowners insurance. Tennessee property taxes are local, so the tax portion of your payment can change as you move between counties and cities.

    The large difference between FHA loan limits in Nashville and most of Tennessee does not mean FHA will always be the best-priced option. Compare current Tennessee mortgage rates across loan types when weighing the total cost of financing.

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    Tennessee FHA Loan Calculator

    Most FHA purchase loans include an upfront mortgage insurance premium equal to 1.75% of the base loan amount. You can generally finance that premium into the mortgage instead of paying the full amount at closing.

    FHA also charges annual mortgage insurance that is usually divided across your monthly payments. The rate depends on your loan amount, loan term and how much you put down.

    The calculator below uses a 0.55% annual mortgage insurance rate as an estimate. That rate applies to many FHA purchase loans, but it does not apply to every FHA mortgage.

    On many FHA loans longer than 15 years, putting at least 10% down means paying annual mortgage insurance for 11 years. With less than 10% down, it generally remains for the mortgage term.

    You can also use our FHA loan calculator to compare different home prices, rates, down payments and property-tax assumptions.

    Tennessee residential property is generally assessed for tax purposes at 25% of its appraised value. Counties and municipalities then apply their own tax rates, so the final bill depends on where the property is located.

    Flood coverage can also affect the payment in some parts of the state. Standard homeowners insurance generally does not cover flood damage, so separate flood insurance may be required or worth considering depending on the property.

    FHA Loan
    Calculator

    Model principal and interest, FHA mortgage insurance, property taxes, and upfront MIP.

    Est. Monthly FHA Payment

    $0

    What’s driving this estimateLive from your current assumptions
    Use the sliders for quick comparisons or tap the blue value pills to type exact numbers.
    Upfront MIP

    Illustrative FHA estimate only. Uses a 1.75% upfront MIP and 0.55% annual MIP assumption. Actual FHA MIP rules depend on loan amount, term, LTV, and case-specific factors. Not a loan offer.

    How this calculator works

    Move the sliders to test scenarios, or tap any blue value pill to type an exact number. The headline result and supporting detail pills update live as you change inputs so you can compare options without resetting your work.

    Methodology: Base loan = home price × (1 − down payment %). Upfront MIP = 1.75% of the base loan, optionally rolled into the loan. Principal & interest are amortized over 30 years using the standard fixed-rate formula M = P · r(1+r)n / ((1+r)n−1), where r is the monthly rate and n is months. Annual MIP of 0.55% is divided by 12 and added monthly. Property taxes are estimated as home price × tax rate ÷ 12.

    Worked example: Home price $400,000, 3.5% down, 6.5% rate, 1.1% taxes, UFMIP financed: base loan $386,000; UFMIP $6,755; financed loan $392,755; monthly P&I ≈ $2,482; monthly MIP ≈ $177; monthly taxes ≈ $367; total ≈ $3,026/mo.

    Use these estimates to compare options and prepare questions for a lender. Final pricing, eligibility, and approval depend on a full application and lender review.

    FHA Loan Requirements for Tennessee Borrowers

    Credit Score and Down Payment

    A credit score of 580 or higher can make you eligible for FHA's minimum 3.5% down payment.

    If your score is between 500 and 579, FHA guidelines generally require at least 10% down. Individual lenders can set higher credit requirements.

    Your score is only one part of FHA credit qualification. Your payment history, income, debts and available funds also matter.

    FHA also allows eligible gift funds, so your down payment does not necessarily have to come entirely from your own savings. The source and transfer of the money must be properly documented.

    Debt-to-Income Ratio

    Your debt-to-income ratio, or DTI, compares your monthly debt payments with your gross monthly income. FHA does not have one 43% maximum that applies to every borrower.

    For manually underwritten loans, 31% for housing expenses and 43% for total monthly debt are the standard starting points. Higher ratios can be allowed in qualifying cases when additional FHA requirements are met.

    Many FHA applications are reviewed through an automated underwriting system instead. Those applications are evaluated using your broader financial picture rather than one DTI percentage as an automatic cutoff.

    Your existing debts still play an important role in FHA debt-to-income qualification and the size of the payment you can support.

    Income Requirements

    FHA does not set a maximum income limit. Your lender instead needs to document enough stable qualifying income to support the mortgage and your other monthly obligations.

    There is no single salary required for an FHA loan in Tennessee. The amount you need depends on the home price, mortgage rate, taxes, insurance and your existing debts.

    Property and Occupancy Requirements

    An FHA purchase loan is generally intended for a home you will use as your primary residence.

    Eligible properties can include single-family homes, certain condos and homes with two to four units.

    If you buy a duplex, triplex or fourplex, you need to live in one of the units. Eligible rental income from the other units may help you qualify, although additional requirements apply to some FHA multifamily purchases.

    Buying a Condo With an FHA Loan in Tennessee

    A condo can qualify for FHA financing, but the property itself must also meet FHA requirements.

    The unit may be in an FHA-approved condominium project. In some cases, an individual condo in a project that is not approved can qualify through FHA's Single-Unit Approval process.

    Checking FHA condo eligibility early can help identify project-level issues before you get too far into a purchase.

    How to Apply for an FHA Loan in Tennessee

    1. Compare FHA financing with other mortgage options based on your credit, savings and expected monthly costs.
    2. Apply with an FHA-approved lender and provide documentation for your income, employment, debts and available funds.
    3. The lender reviews your finances through FHA's underwriting process.
    4. Choose a home that meets FHA property and occupancy requirements.
    5. Complete the FHA appraisal and any other required property reviews.
    6. Review your rate, APR, mortgage insurance, closing costs and total monthly payment before closing.

    FHA Loan Limits in Tennessee for 2026

    Most Tennessee counties have a $541,287 FHA limit for a single-family home in 2026.

    The major exception is Middle Tennessee. The Nashville-Davidson-Murfreesboro-Franklin FHA market has a $1,029,250 limit.

    That higher amount applies throughout the FHA-defined Nashville market, including Davidson, Williamson, Rutherford, Sumner, Wilson, Robertson, Cheatham and several other surrounding counties.

    Other major Tennessee markets remain at the standard limit. Knox County in Knoxville, Shelby County in Memphis, Hamilton County in Chattanooga, Montgomery County in Clarksville and Sevier County all use the $541,287 limit.

    Use the county lookup below for the property you are considering. You can also compare counties with the 2026 FHA loan limit map or verify the amount through HUD's FHA loan limit lookup.

    2026 FHA loan limits by county

    Loading map…
    County 1-Unit Limit 2-Unit 3-Unit 4-Unit
    Source: HUD, 2026 FHA forward mortgage limits

    FHA loan limits are set annually by the U.S. Department of Housing and Urban Development (HUD). Limits vary by county and property type, with higher ceilings in designated high-cost areas and statutory special areas (Alaska, Hawaii, Guam, and the U.S. Virgin Islands). This map is for informational purposes only and does not constitute a loan offer or commitment to lend. Actual loan eligibility depends on credit, income, property, and lender guidelines.

    2026 FHA Loan Limits in Major Tennessee Markets

    Area County 2026 FHA Limit for a Single-Family Home
    Nashville Davidson $1,029,250
    Franklin Williamson $1,029,250
    Murfreesboro Rutherford $1,029,250
    Knoxville Knox $541,287
    Memphis Shelby $541,287
    Chattanooga Hamilton $541,287
    Clarksville Montgomery $541,287
    Sevierville Sevier $541,287

    Tennessee FHA Limits for 1- to 4-Unit Homes

    Property Size Most Tennessee Counties Nashville Area
    1 Unit $541,287 $1,029,250
    2 Units $693,050 $1,317,650
    3 Units $837,700 $1,592,700
    4 Units $1,041,125 $1,979,350

    Why Nashville Has a Much Higher FHA Loan Limit

    Nashville is the clear outlier in Tennessee's 2026 FHA limits. Davidson County and the surrounding FHA market allow a $1,029,250 mortgage for a single-family home, compared with $541,287 across most of the state.

    The higher limit is not restricted to Nashville itself. Williamson County around Franklin, Rutherford County around Murfreesboro and Sumner County also use the same amount.

    That is important if you are comparing homes across Middle Tennessee. Moving from Nashville into many surrounding counties does not reduce the FHA limit even though home prices, property taxes and commuting costs can change.

    Knoxville

    Knox County uses the standard $541,287 FHA limit. Anderson, Blount, Campbell, Grainger, Loudon, Morgan, Roane and Union counties in the broader Knoxville FHA market also use the standard amount.

    That creates a large difference between Tennessee's two biggest East and Middle Tennessee housing markets. An FHA borrower around Nashville has substantially more borrowing room than an FHA borrower around Knoxville.

    Memphis

    Shelby County uses the standard $541,287 limit. Fayette and Tipton counties on the Tennessee side of the Memphis FHA market also use the standard amount.

    Chattanooga

    Hamilton County uses the $541,287 standard limit, as do the Tennessee counties surrounding Chattanooga.

    Because the Chattanooga metro extends into Georgia, buyers comparing homes across the state line should check the FHA limit for the actual county rather than assuming the entire metro uses one amount.

    Clarksville

    Montgomery County also uses the standard $541,287 limit. The Clarksville housing market crosses into Kentucky, making the county and state particularly important when comparing FHA limits and local housing costs.

    How Tennessee Property Taxes Work

    Tennessee generally assesses residential property at 25% of its appraised value for property-tax purposes.

    The county or municipality then applies its local tax rate to that assessed value. For example, a home appraised at $400,000 would have an assessed value of $100,000 before the local tax rate is applied.

    Because tax rates are set locally, the same home value can produce different tax bills in Nashville, Knoxville, Memphis or another Tennessee community. The Tennessee Comptroller provides the current calculation method and local tax-rate information.

    Flood Insurance in Tennessee

    Flooding is not limited to coastal states. Tennessee has flood exposure along rivers, streams and low-lying areas throughout the state.

    Standard homeowners insurance generally does not cover flood damage. Flood insurance is normally purchased separately, and a lender may require it when a home is located in a qualifying high-risk flood area.

    The Tennessee Emergency Management Agency provides information about flood maps, insurance and local floodplain requirements.

    FHA Loans in Nearby States

    FHA underwriting rules are federal, but county limits and local housing costs change across state lines. Buyers comparing nearby markets can also check FHA limits in Kentucky, North Carolina and Georgia.

    Bottom Line

    Tennessee has an unusually large gap between its standard and high-cost FHA markets. Most counties use the $541,287 limit for a single-family home in 2026, while Nashville and its surrounding FHA market allow up to $1,029,250.

    Beyond the loan limit, use local property taxes and insurance costs when comparing homes. Tennessee residential property is generally assessed at 25% of appraised value, while local tax rates determine what you actually owe.

    Frequently Asked Questions About FHA Loans in Tennessee

    What Are the FHA Loan Requirements in Tennessee?

    You generally need sufficient documented income, manageable debts and an eligible property. A credit score of 580 or higher can allow the minimum 3.5% down payment, while scores from 500 to 579 generally require at least 10% down.

    What Is the FHA Loan Limit in Nashville for 2026?

    The 2026 FHA limit for a single-family home is $1,029,250 throughout the Nashville-Davidson-Murfreesboro-Franklin FHA market.

    Is the FHA Loan Limit the Same in Nashville and Franklin?

    Yes. Davidson County and Williamson County both have a $1,029,250 FHA limit for a single-family home in 2026. Rutherford County around Murfreesboro uses the same amount.

    What Is the FHA Loan Limit in Knoxville?

    Knox County uses the standard $541,287 FHA limit for a single-family home in 2026.

    What Is the FHA Loan Limit in Memphis?

    Shelby County also uses the standard $541,287 FHA limit.

    Does FHA Have an Income Limit in Tennessee?

    No. FHA does not set a maximum income limit for its standard home loan program. Your lender instead determines whether your qualifying income can support the mortgage and your other debts.

    What Credit Score Do You Need for an FHA Loan in Tennessee?

    A credit score of 580 or higher can make you eligible for FHA's minimum 3.5% down payment. Scores from 500 to 579 generally require at least 10% down. Lenders can set stricter requirements.

    Can You Buy a Duplex With an FHA Loan in Tennessee?

    Yes. FHA can finance an eligible property with two, three or four units as long as you plan to live in one of the units as your primary residence.

    Can You Buy a Condo With an FHA Loan in Tennessee?

    Yes, but the condo must meet FHA requirements. The unit may be in an FHA-approved condominium project, or it may qualify through FHA's Single-Unit Approval process.

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