How to Buy a House with No Money Down in Tennessee
Buying a home with little to no money down may seem impossible, but there are mortgage programs available in Tennessee that make it achievable. Whether you're a first-time homebuyer or an investor looking to purchase a property with minimal upfront costs, this guide will break down the best options available to you.
Zero Down Payment Mortgage Options in Tennessee There are two primary loan programs that allow homebuyers to purchase a home with zero down payment:
1. USDA Loan (100% Financing) The USDA loan is a government-backed program designed for homebuyers in rural areas.
Key benefits include:
- No down payment required
- Low mortgage insurance costs
- Competitive interest rates
- Flexible credit requirements
Eligibility Requirements:
- The home must be in an eligible USDA-designated area
- Household income must meet USDA income limits
- Minimum credit score of 580 (some lenders allow lower)
2. VA Loan (For Eligible Veterans & Service Members)
The VA loan is one of the best mortgage options for veterans, active-duty service members, and eligible surviving spouses. It offers:
- No down payment required
- No private mortgage insurance (PMI)
- Competitive interest rates
- Easier qualification standards
Eligibility Requirements:
- Must have eligible military service
- Meet lender-specific credit and income requirements
- Obtain a Certificate of Eligibility (COE)
Low Down Payment Options If You Don’t Qualify for 100% Financing If you don't meet the USDA or VA loan requirements, you can still purchase a home with a low down payment:
1. FHA Loan (3.5% Down Payment)
- Ideal for first-time homebuyers or those with lower credit scores
- Credit score requirement: 580+ (or 500+ with 10% down)
- Flexible income and debt-to-income ratio requirements
2. Conventional 97 Loan (3% Down Payment)
- Requires only 3% down, making it one of the lowest conventional loan options
- Minimum credit score: 620+
- Must be a first-time homebuyer or meet income requirements
Down Payment Assistance Programs in Tennessee Tennessee offers several down payment assistance programs that can help cover closing costs and down payments:
- THDA Great Choice Home Loan Program – Offers up to 6% assistance toward down payment and closing costs
- Local city/county grant programs – Some cities, like Nashville and Memphis, offer assistance for first-time buyers
- Employer-Assisted Housing Programs – Some employers provide down payment aid for employees
How to Qualify for a No Money Down Mortgage To improve your chances of getting approved for a zero or low down payment mortgage, follow these steps:
1. Check Your Credit Score Lenders typically require a minimum score of 580-640 for zero-down loans. Improve your score by paying bills on time and reducing debt.
2. Get Pre-Approved A mortgage pre-approval helps determine which loan options you're eligible for and strengthens your offer when buying a home.
3. Work with an Experienced Mortgage Broker A mortgage broker can help you find the best no-money-down loan programs and guide you through the qualification process.
Get Started on Your Homeownership Journey Today If you're ready to buy a home in Tennessee with little or no money down, NEXA Mortgage LLC can help you find the right financing solution.
📞 Call 615.364.5700 or visit theburkslendinggroup.com to explore your mortgage options!
Final Thoughts: Owning a home in Tennessee is possible even if you don’t have a large down payment. With the right loan program and assistance, you can achieve your dream of homeownership sooner than you think!