Most Tennessee buyers don't need 20% down. VA loans allow 0% down for eligible veterans and service members, FHA loans require as little as 3.5% down, and conventional loans through programs like Fannie Mae HomeReady can go as low as 3% down for qualifying first-time buyers. On top of that, the Tennessee Housing Development Agency (THDA) offers down payment assistance that can cover most or all of what you'd otherwise need to bring to closing.
The 20% down payment rule is one of the most persistent myths in home buying, and it trips up a lot of first-time buyers in Franklin, Brentwood and Nashville who assume they need to save six figures before they can even start looking. In reality, the minimum down payment depends entirely on which loan program you use, and Middle Tennessee buyers have several low-down-payment paths available.
FHA loans are insured by the federal government and allow a down payment as low as 3.5% with a qualifying credit score, which is why they're one of the most common first-time-buyer programs I see here in Williamson and Davidson County. See HUD's overview of the FHA 203(b) insured mortgage program for the federal program details.
Conventional loans can go even lower for qualifying buyers — Fannie Mae's HomeReady program allows down payments as low as 3% for eligible first-time and low-to-moderate-income buyers. You can read more about it directly from Fannie Mae's HomeReady mortgage overview.
VA loans go further still: eligible veterans, active-duty service members, and surviving spouses can often buy with 0% down and no monthly private mortgage insurance.
THDA down payment assistance is the piece a lot of Nashville-area buyers don't know about. The Tennessee Housing Development Agency's Great Choice Plus program offers a second mortgage — either a deferred loan that's forgiven after several years, or a low-interest amortizing loan up to 5% of the sales price — specifically to help cover your down payment and closing costs. Full program details, income limits, and current loan amounts are on THDA's down payment assistance page.
A real Franklin example: say you're buying a $400,000 home in Williamson County. With FHA at 3.5% down, you'd need roughly $14,000 for the down payment plus closing costs. With THDA assistance layered on top of an eligible loan, that upfront cash requirement can drop substantially — sometimes to just what you need for earnest money and a home inspection. The exact numbers depend on your credit, income, and the specific program, which is why I walk through the real math with every buyer before they start house-hunting rather than after.
