VA Loan Guide for Veterans in Tennessee
Tennessee offers Veterans and active-duty service members excellent opportunities to achieve affordable homeownership through VA loans.
Backed by the Department of Veterans Affairs (VA), these loans remove financial barriers like down payments and private mortgage insurance, making homeownership more accessible for those who have served our country.
With a median home price of approximately $285,000 and vibrant cities like Nashville, Memphis, and Knoxville, Tennessee provides an ideal environment for Veterans to establish roots.
This guide covers the benefits of VA loans in Tennessee, including eligibility requirements, loan types, assistance programs, and resources to help Veterans navigate the homebuying process.
In this Article
What are VA Loans?
VA home loans, provided by the U.S. Department of Veterans Affairs, open the door to homeownership for eligible Veterans, active-duty service members, and surviving spouses. By eliminating traditional barriers such as down payments and private mortgage insurance, these loans make the dream of owning a home more attainable.
With competitive interest rates and flexible credit standards, VA loans allow borrowers to save money while accessing versatile financing options. They can be applied toward purchasing different types of properties, provided the home will serve as the borrower’s primary residence.
VA Loan Benefits
VA loans offer distinct advantages, making them an exceptional choice for veterans, active-duty service members, and eligible surviving spouses. Key benefits include:
No Down Payment
Unlike conventional loans that often require a down payment starting at 3% or more, VA loans remove this hurdle, enabling buyers to allocate funds toward other priorities, such as investments or savings goals. For military families, this can be a game-changer.
Lower Interest Rates
Lower rates mean significant savings over the life of the loan, reducing monthly payments and overall costs. This advantage also increases purchasing power, allowing veterans to afford higher-value homes without exceeding their budget.
Flexible Credit Guidelines
While credit score requirements vary by lender, VA loans often accept scores as low as 620. They also allow for higher debt-to-income (DTI) ratios and provide shorter waiting periods after financial setbacks like bankruptcies or foreclosures.
Limited Closing Costs
Sellers can pay all the buyer’s loan-related closing costs and contribute up to 4% of the loan amount in concessions. Additionally, VA borrowers are exempt from certain fees, further reducing out-of-pocket expenses.
No Private Mortgage Insurance (PMI)
This saves veterans hundreds of dollars annually and maximizes their purchasing power, allowing them to afford more home within their budget. FHA loans, which require both upfront and monthly mortgage insurance premiums, also lack this advantage.
Lifetime Eligibility
VA loan benefits are available for a lifetime, allowing eligible borrowers to reuse them multiple times as long as entitlement criteria are met.
Whether purchasing a first home, upgrading to a larger property, or buying a vacation home, veterans can rely on VA loans at every stage of life. Even if a prior VA loan default occurred, eligibility can often be restored by repaying the loan or reclaiming entitlement. This ensures long-term access to affordable financing options.
Tennessee Veteran Programs by City
Metro Nashville Housing Authority – Veterans Housing Assistance Program
The Metro Nashville Housing Authority provides housing assistance for veterans, including affordable rental and homeownership options. Visit the Metro Nashville Housing Authority Veterans Housing Assistance Program for more details.
- Offers financial assistance for down payments and closing costs.
- Helps veterans navigate the homebuying process with eligibility guidance.
- Focuses on making homeownership accessible for low- to moderate-income veterans.
Tennessee Housing Development Agency (THDA) – Great Rate Down Payment Assistance
The THDA offers down payment assistance for veterans purchasing homes in Nashville. The program provides access to competitive interest rates and financial assistance for qualified buyers. Visit the THDA Great Rate Program page for more details.
- Provides down payment assistance of up to 6% of the loan amount.
- Offers competitive interest rates and affordable mortgage options.
- Includes homebuyer education to ensure long-term financial success.
Habitat for Humanity of Greater Nashville – Veterans Build Program
Habitat for Humanity partners with veterans to help build affordable homes through the Veterans Build program. Visit the Habitat for Humanity Veterans Build Program for more details.
- Offers opportunities to help build your own home with “sweat equity.”
- Provides low-interest mortgages for veterans.
- Includes financial literacy workshops to guide veterans through the homeownership journey.
Memphis Housing Authority – Veterans Housing Assistance Program
The Memphis Housing Authority offers veterans housing assistance through affordable rental options and homeownership programs. Visit the Memphis Housing Authority Veterans Housing Assistance Program for more details.
- Provides financial assistance for homebuyers, including veterans.
- Helps veterans secure affordable housing options tailored to their needs.
- Guides veterans through the application and eligibility process.
Tennessee Housing Development Agency (THDA) – Veterans Home Loan Program
The THDA offers financial assistance for veterans purchasing homes in Memphis, providing access to low-interest loans and down payment assistance. Visit the THDA Veterans Home Loan Program page for more details.
- Offers special VA loan products for veterans and their families.
- Provides competitive mortgage rates and down payment assistance.
- Includes homebuyer education programs to assist veterans through the process.
Veterans Affairs Memphis Regional Loan Center
The VA Memphis Regional Loan Center helps veterans with their VA loan applications and refinancing options, offering guidance on eligibility and maximizing benefits. Visit the [VA Memphis Regional Loan Center](https://www.benefits.va.gov/RO/ MEMPHIS.asp) for more details.
- Helps veterans with VA loan eligibility and applications.
- Provides support for refinancing options and credit counseling.
- Offers educational resources for successful homeownership.
Knoxville Housing Authority – Veteran Homebuyer Assistance Program
The Knoxville Housing Authority provides homebuyer assistance to veterans, including down payment help and low-interest mortgages. Visit the Knoxville Housing Authority Veterans Assistance Program for more details.
- Provides down payment and closing cost assistance for veterans.
- Offers housing support and resources tailored to veterans.
- Helps veterans navigate homeownership and housing applications.
Tennessee Housing Development Agency (THDA) – First-Time Homebuyer Program
The THDA offers a first-time homebuyer program for veterans in Knoxville, which includes down payment assistance and access to low-interest mortgage rates. Visit the THDA First-Time Homebuyer Program page for more details.
- Provides up to 6% down payment assistance for eligible veterans.
- Offers competitive interest rates for affordable home financing.
- Includes homebuyer education and resources for long-term homeownership success.
Habitat for Humanity of Knoxville – Veterans Build Program
Habitat for Humanity of Knoxville partners with veterans to build affordable homes through their Veterans Build program. Visit the Habitat for Humanity of Knoxville Veterans Build Program for more details.
- Offers the opportunity for veterans to help build their own homes.
- Provides low-interest mortgages and flexible financing options.
- Includes educational workshops on budgeting, home maintenance, and financial literacy.
Chattanooga Housing Authority – Veterans Housing Assistance Program
The Chattanooga Housing Authority provides housing resources for veterans, including down payment assistance and affordable housing options. Visit the Chattanooga Housing Authority Veterans Housing Assistance Program for more details.
- Offers housing vouchers and down payment assistance for eligible veterans.
- Focuses on creating affordable housing solutions for veterans in Chattanooga.
- Assists veterans through the application process and provides financial guidance.
Tennessee Housing Development Agency (THDA) – Low-Income Veterans Homeownership Program
This program offers low-interest loans and down payment assistance for veterans in Chattanooga. Visit the THDA Low-Income Veterans Homeownership Program page for more details.
- Provides down payment assistance up to 6% for eligible veterans.
- Offers low-interest loans to veterans with low to moderate income.
- Includes homebuyer education and counseling services to guide veterans through the process.
Chattanooga Habitat for Humanity – Veterans Build Program
Habitat for Humanity of Chattanooga partners with veterans to help them build affordable homes through their Veterans Build program. Visit the Habitat for Humanity Chattanooga Veterans Build Program for more details.
- Allows veterans to contribute “sweat equity” in the homebuilding process.
- Provides affordable financing options with low-interest mortgages.
- Offers financial literacy programs to help veterans manage their finances and maintain homeownership.
Murfreesboro Housing Authority – Veterans Assistance Program
The Murfreesboro Housing Authority offers assistance to veterans, helping them secure affordable housing through financial aid and housing resources. Visit the Murfreesboro Housing Authority Veterans Assistance Program for more details.
- Provides down payment and closing cost assistance to veterans.
- Offers support for navigating the housing market and application process.
- Focuses on improving housing access for veterans with limited resources.
Tennessee Housing Development Agency (THDA) – Tennessee Veterans Home Loan Program
The THDA offers a Veterans Home Loan Program for veterans in Murfreesboro, providing down payment assistance and competitive mortgage rates. Visit the THDA Tennessee Veterans Home Loan Program page for more details.
- Provides up to 6% down payment assistance for veterans.
- Offers affordable mortgage rates for veterans and their families.
- Includes homebuyer education and financial counseling.
Habitat for Humanity of Rutherford County – Veterans Build Program
Habitat for Humanity of Rutherford County works with veterans to build homes through their Veterans Build program. Visit the Habitat for Humanity Rutherford County Veterans Build Program for more details.
- Offers veterans the opportunity to build their own homes.
- Provides affordable financing options and low-interest loans.
- Includes financial education and home maintenance workshops to ensure long-term success.
VA Loan Eligibility Criteria
To qualify for a VA loan, applicants must meet the service and eligibility criteria outlined by the Department of Veterans Affairs (VA).
- Veterans: Those who have completed active-duty service and received an honorable or otherwise qualifying discharge.
- Active-Duty Service Members: Current military personnel are eligible for VA loans.
- National Guard and Reserve Members: Must have either completed six years of service or served at least 90 days of active duty during wartime.
- Surviving Spouses: Spouses of service members who died in service or due to a service-related condition may also be eligible.
Minimum Service Time Requirements:
- 90 days of active-duty service during wartime.
- 181 days of active-duty service during peacetime.
- Six years of service in the National Guard or Reserves, or 90 days of active-duty service under Title 32 orders (with at least 30 consecutive days).
VA Loan Eligibility Calculator
How to Obtain a Certificate of Eligibility (COE)
Obtaining a VA Certificate of Eligibility (COE) is a crucial step in securing a VA loan. This document verifies that you meet the service requirements set by the Department of Veterans Affairs.
How to Apply:
- Online: Access the VA’s eBenefits portal for a fast and straightforward process.
- Through a Lender: Many VA-approved lenders can retrieve your COE electronically on your behalf.
- By Mail: Complete and send VA Form 26-1880 directly to the VA; this option may take more time.
Required Documents:
- Veterans: DD Form 214, detailing service history and discharge status.
- Active-Duty Service Members: A statement of service signed by your commanding officer.
- National Guard/Reserve Members: Point statements and proof of service, if not activated.
- Surviving Spouses: A marriage license and the veteran’s death certificate to establish eligibility.
Tennessee Housing Market Overview
Tennessee presents Veterans with a favorable housing market, featuring a median home price of approximately $350,000. Cities like Nashville, Memphis, and Knoxville offer diverse housing options, from urban apartments to suburban family homes, while rural areas provide affordable alternatives and a peaceful lifestyle without sacrificing access to major amenities.
City-Wise Housing Data
| City | Average Home Price | Average VA Mortgage Payment* |
|---|---|---|
| Nashville | $390,000 | $2,515 |
| Memphis | $225,000 | $1,456 |
| Knoxville | $280,000 | $1,838 |
| Chattanooga | $260,000 | $1,708 |
| Clarksville | $230,000 | $1,520 |
*Estimated VA mortgage payment is based on a 30-year fixed loan at 6.5% interest with zero down payment. Actual payments may vary.
Tennessee VA Loan Limit
$806,500
The VA loan limit for most counties in Tennessee is $806,500. Veterans with full entitlement can borrow up to this limit without needing a down payment. Those with partial entitlement should consult with their lender to confirm eligibility and loan details.
Tennessee Housing Programs for Veterans
Tennessee Housing Development Agency (THDA) Homeownership for Heroes Program
The Tennessee Housing Development Agency offers a Homeownership for Heroes Program, designed to assist Veterans and active-duty service members with affordable homeownership.
- Down payment assistance of up to $6,000
- Offers reduced interest rates for qualified buyers
- Provides homebuyer education classes to ensure successful homeownership
Learn more about the THDA Homeownership for Heroes Program
Habitat for Humanity of Tennessee – Veterans Build
Habitat for Humanity in Tennessee collaborates with Veterans to help build affordable homes through the Veterans Build program.
- Sweat equity opportunities to reduce home costs
- Low-interest mortgages for long-term financial stability
- Financial and homeownership counseling services for Veterans
Visit Habitat for Humanity Tennessee
Tennessee Property Tax Exemption for Veterans
Tennessee provides property tax relief for Veterans with disabilities, ensuring that homeownership remains affordable over the long term.
- Full exemption for Veterans with a 100% service-connected disability
- Partial exemption for those with a disability rating below 100%
- Surviving spouses may be eligible for similar tax benefits
Learn more about the Tennessee Property Tax Exemption
Types of VA Loans in Tennessee
VA Purchase Loan
A VA Purchase Loan helps Veterans and active-duty service members purchase homes without a down payment, making homeownership more accessible.
- 100% financing with no down payment required
- Can be used for single-family homes, VA-approved condos, and multi-unit properties
- Lower interest rates compared to conventional loans
Interest Rate Reduction Refinance Loan (IRRRL)
The Interest Rate Reduction Refinance Loan (IRRRL) is a streamlined refinancing option that helps Veterans lower their mortgage interest rate and monthly payments.
- Minimal documentation required
- No appraisal needed
- Low closing costs, often rolled into the loan
Cash-Out Refinance Loan
A Cash-Out Refinance Loan allows Veterans to use their home equity for major expenses, such as home improvements, debt consolidation, or education.
- Provides access to up to 100% of home equity
- Replaces both VA and non-VA loans
- Flexible use of funds for personal or financial needs
Native American Direct Loan (NADL)
The Native American Direct Loan (NADL) supports Native American Veterans or those married to Native Americans in purchasing, renovating, or building homes on federal trust land.
- No down payment required
- Competitive interest rates and reduced closing costs
- Tailored to homeownership on federal trust land
VA Renovation Loan
The VA Renovation Loan combines the cost of buying a home with the cost of making necessary repairs and improvements, simplifying the financing process.
- Funds essential repairs, such as structural or system upgrades
- Can cover energy-efficient improvements and modernization projects
- Simplifies financing by combining purchase and renovation costs
Energy Efficient Mortgage (EEM)
The Energy Efficient Mortgage (EEM) allows Veterans to finance eco-friendly home upgrades alongside their home loan, making homes more sustainable and lowering utility bills.
- Covers improvements like solar panels, better insulation, and energy-efficient windows
- Can be combined with other VA loans
- Reduces long-term utility expenses, promoting sustainability
Property Taxes in Tennessee
Tennessee offers valuable property tax relief for Veterans with disabilities to help make homeownership more affordable.
| Disability Rating | Exemption Amount |
|---|---|
| 100% | Full exemption |
| Partial (<100%) | Varies by county |
| Surviving Spouses | Varies by county |
Check with your local tax assessor’s office for full eligibility details.
Frequently Asked Questions
What is the VA loan limit in Tennessee?
The VA loan limit for most counties in Tennessee is $806,500. Veterans with full entitlement can borrow up to this limit without requiring a down payment.
Do VA loans require private mortgage insurance (PMI)?
No, VA loans do not require PMI, which helps reduce monthly payments for Veterans.
Are there property tax exemptions for Tennessee Veterans?
Yes, Veterans with a 100% service-connected disability can receive full property tax exemptions on their primary residence. Those with partial disabilities may receive partial exemptions.
Can VA loans cover multi-unit properties?
Yes, VA loans can cover multi-unit properties as long as the Veteran occupies one of the units as their primary residence.
What credit score is required for a VA loan in Tennessee?
Although the VA does not have a set minimum credit score, most lenders prefer a score of 620 or higher.
Are there any Veteran-specific homebuyer assistance programs in Tennessee?
Yes, the Tennessee Housing Development Agency offers the Homeownership for Heroes Program, providing financial assistance and support for Veterans and service members.
Can VA loans finance new construction?
Yes, VA loans can finance new construction if the property meets VA guidelines.
What documents are needed to apply for a VA loan?
You’ll need a Certificate of Eligibility (COE), proof of income, and a credit history report to apply for a VA loan.
How can I apply for property tax exemptions in Tennessee?
You can apply for property tax exemptions through your local tax assessor’s office by submitting proof of disability rating and residency.
Are there refinancing options available for VA loans?
Yes, both the IRRRL and Cash-Out Refinance Loan programs allow for refinancing, either to lower your interest rate or access home equity.
