VA Loans Tennessee

Start Your VA Pre-Approval

Find out what Tennessee tax relief is actually worth on the house you are looking at, before you write an offer.

Soft credit pull. No SSN to start.

Who You’re Actually Working With

J.D. Peck, NMLS #314883. 25+ years originating, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. VA files are not a sideline here. They are the practice.

Relief Is Capped at $175,000 of Market Value

The state calculates your reimbursement on the first $175,000 of the home’s full market value. Value above that is taxed normally. On a $400,000 home you are getting relief on roughly 44 percent of the value, not all of it. Budget for the rest.

Three Ways to Qualify

A service-connected permanent and total disability as determined by VA. Or a 100 percent permanent total rating tied to former prisoner of war status. Or paraplegia, permanent paralysis of both legs and lower body from a service-connected spinal cord or brain injury, legal blindness, or loss or loss of use of two or more limbs from a service-connected cause.

No Income Test for Disabled Veterans

This is the part most veterans get wrong in the other direction. Tennessee’s income limit applies to the separate elderly and disabled homeowner program. The disabled veteran category has no income cap. If someone told you that you earn too much, they were reading the wrong program.

Surviving Spouse Continues the Relief

An unremarried surviving spouse who owns and lives in the home can continue the relief, including in cases where the veteran never filed for it before death. Remarriage ends it.

The Filing Deadline Is Tied to Delinquency, Not January

Applications are due 35 days after the property tax delinquency date, and the taxes have to be paid by that same date. You apply when the bill arrives, not at the start of the year. Miss it and you wait a full cycle.

You File With the County Trustee

Not the assessor and not the state. Applications go through your county trustee’s office, or the city collecting official if the home sits inside city limits. Two offices, two applications, if you are inside a municipality.

Statute

Tenn. Code Ann. 67-5-701 through 67-5-704, with the disabled veteran category at 67-5-704. Program administration sits with the Comptroller of the Treasury’s Division of Property Assessments.

No State Income Tax on Anything

Wages, military retirement, Social Security, pensions, IRA and 401(k) distributions. None of it is taxed by Tennessee. The Hall income tax on interest and dividends was repealed for tax years beginning on or after January 1, 2021.

Rated 100 Percent and Buying Above $175,000?

Most Tennessee lenders escrow either the full tax bill or zero. Both are wrong. We calculate the actual relief against the actual assessed value so your payment is right the first time.

No cost. No obligation.

Residential property is assessed at 25 percent of appraised value

Tenn. Code Ann. 67-5-801 sets the residential and farm assessment ratio at 25 percent. Commercial and industrial sit at 40 percent, utilities at 55 percent. The tax rate applies to the assessed value, not the appraised value, which is why a rate that sounds high is not.

Reappraisal runs on a four, five, or six year cycle

The cycle is set county by county under state oversight. In a fast-appreciating county a reappraisal year can move your assessed value in one step rather than gradually. If you are buying in a county due for reappraisal, ask when.

There is no general homestead exemption

Tennessee has no blanket owner-occupant exemption on property tax. The only relief programs are the means-tested elderly and disabled program, the disabled veteran program, and a county-optional tax freeze for seniors. Do not confuse the bankruptcy homestead exemption with property tax. They are unrelated.

Rates vary widely by county and city

A home inside city limits pays both the county rate and the city rate. Two houses ten minutes apart can carry materially different tax lines. We pull the actual parcel, not a county average.

Indebtedness tax: $0.115 per $100 financed

Tennessee charges recordation tax on the amount of debt secured by the recorded instrument, at 11.5 cents per $100, with the first $2,000 of indebtedness excluded. On a $400,000 VA loan that is roughly $458. On a $600,000 loan it is roughly $688.

Realty transfer tax: $0.37 per $100 of value

Charged on the transfer itself, at 37 cents per $100 of consideration or value, whichever is greater. On a $400,000 purchase that is $1,480. Custom in most of Tennessee puts this on the seller, but custom is not law and it is negotiable.

It hits refinances too

The indebtedness tax applies to the new loan amount every time you record a new deed of trust. That is a real line item on a Tennessee cash-out refinance that borrowers in no-tax states never see. It is one of several reasons a VA IRRRL, which carries a 0.5 percent funding fee and no appraisal in most cases, often beats a full refinance here.

A seller can absorb it

Recording fees and taxes are normal allowable closing costs under VA rules, which means there is no VA percentage cap on a seller paying them. That is Bucket 1, and it is separate from the 4 percent concession allowance.

Where it bites hardest

West and Middle Tennessee carry the heaviest tornado and hail exposure, and the Memphis and Nashville metros drive most of the loss history. East Tennessee and the Plateau are cheaper but not immune.

Tennessee has no FAIR Plan

Unlike Georgia, North Carolina, and Florida, Tennessee does not operate a state insurer of last resort or a wind pool. If carriers decline the roof, there is no state backstop to fall into. That makes shopping early more important here, not less.

Roof age is the deciding variable

In hail country, carriers price and sometimes decline on roof age and material. A twenty year old three-tab roof can cost you the binder. Ask the age before you write the offer, not after the inspection.

Separate wind and hail deductibles are common

A percentage deductible on wind and hail is normal in Tennessee policies. It does not change your monthly payment, but it changes what a storm actually costs you. Read the declarations page.

We quote the address, not the zip code

A preapproval built on an estimated insurance number falls apart at underwriting. We get a real quote on the actual property so the debt-to-income math holds.

The veteran can be charged for it in Tennessee

VA has authorized, as a local variance, that veterans may be charged the wood destroying pest inspection fee where the inspection is required. Older guidance that says the buyer can never pay for it is out of date.

Findings can stop a closing cold

Active infestation or prior damage triggers treatment and, in some cases, a structural repair requirement before VA will accept the property. On an older home, order it early rather than in the last week.

Well and septic get scrutinized too

Rural Middle and East Tennessee properties often sit on well and septic. VA has specific water quality and distance requirements. If the property is not on public utilities, we flag it in week one.

No Minimum Credit Score Overlay

VA publishes no score floor. Most lenders impose one anyway, usually 620. We do not. A refer from automated underwriting starts a manual underwrite. It does not end the file.

We Price the Tax Relief Correctly

Relief on the first $175,000 of market value, not a full exemption and not zero. Getting this line right is the difference between an approval and a denial on a tight file.

No State Income Tax Means Stronger Residual Income

Tennessee takes nothing off your military retirement, your Social Security, or your distributions. VA underwrites on residual income, and residual income is calculated after taxes. This state helps you there and most lenders never mention it.

Fort Campbell PCS Timelines Are Routine Here

Orders in hand and a report date that does not match the closing calendar is a normal week for us. VA allows closing before you physically occupy, within a reasonable window.

$0 Down, No Monthly Mortgage Insurance

With full entitlement there is no down payment requirement and no monthly MI, ever. That is the structural edge over FHA and low-down-payment conventional financing.

Manual Underwriting Is Routine Here

Bankruptcy, foreclosure, collections, a rough stretch after separation. We run manual underwrites regularly using the compensating factors VA actually recognizes.

Purchase, First-Time Use

2.15% with less than 5% down, including zero down. 1.5% with 5% or more down. 1.25% with 10% or more down.

Purchase, Subsequent Use

3.3% with less than 5% down. 1.5% with 5% or more down. 1.25% with 10% or more down.

VA IRRRL Streamline Refinance

0.5% flat, regardless of prior use.

Exempt Entirely

Veterans receiving VA disability compensation at any rating, veterans entitled to compensation who take retirement pay instead, surviving spouses receiving DIC, and Purple Heart recipients on active duty. It shows on your COE and we verify before you pay anything.

Bucket 1: Your Closing Costs, No VA Cap

The seller can pay all of your normal allowable closing costs. Origination, appraisal, title, recording, credit report, prepaid taxes and insurance at customary levels. No VA percentage ceiling. Market-rate discount points for a permanent rate buydown also sit here, uncapped.

Bucket 2: Concessions, Capped at 4%

Anything of value beyond normal closing costs is a concession, capped at 4 percent of the VA reasonable value. It stacks on top of Bucket 1 rather than replacing it.

Paying Off Your Debt

The seller can retire your credit cards, collections, or an auto loan as a concession. Dropping a high monthly payment lowers your debt-to-income ratio and can turn a denial into an approval on the same contract at the same price.

Paying Your Lease Break So You Can Buy Now

An early lease termination penalty on a rental or on-post housing is an allowable concession. It is how a family stops paying rent and closes this month instead of waiting for a lease to run out. We have structured this many times.

Prepaying Your Mortgage Payments

A seller can prepay mortgage payments on your behalf as a concession. When a seller would rather not cut the price, this is often an easier yes, and it does more for your file.

The Funding Fee and a 2-1 Buydown

Both count toward the 4 percent and both are commonly seller-funded. A concession package is often easier to win than a price cut, and it does more for your approval than the price cut would.

Most of Tennessee is at the $832,750 baseline

The 2026 national one-unit conforming baseline is $832,750. That is the figure that applies across most of the state, including Shelby, Knox, and Hamilton counties.

The Nashville metro is a high-cost area at $1,029,250

Fourteen counties in the Nashville MSA carry an above-baseline one-unit limit of $1,029,250 for 2026: Cannon, Cheatham, Davidson, Dickson, Hickman, Macon, Maury, Robertson, Rutherford, Smith, Sumner, Trousdale, Williamson, and Wilson. Confirm the current figure with us before you write in that band.

If a lender calls your loan a VA jumbo

Ask which VA rule they are citing. With full entitlement there is not one. Score minimums and down payments on larger loans are investor overlays, not VA policy.

Second-tier entitlement is where this matters

If you kept a VA loan in another state and are buying here on remaining entitlement, we compute the exact zero-down ceiling against the applicable county limit. That number is different in Williamson County than it is in Knox.

Clarksville and Montgomery County

Fort Campbell anchors the largest military housing market in the state and drives constant PCS turnover. Clarksville, Woodlawn, and southern Montgomery County on the Tennessee side, with Oak Grove and Hopkinsville just across the Kentucky line.

Nashville and the Middle Tennessee ring

The high-cost conforming band and the deepest inventory in the state. Nashville, Murfreesboro, Franklin, Hendersonville, Mount Juliet, Gallatin, Spring Hill, and Clarksville’s eastern reach. Competitive, fast, and where the loan limit question actually comes up.

Millington and the Memphis area

Naval Support Activity Mid-South sits in Millington and houses Navy Personnel Command and Navy Recruiting Command, which means a steady flow of shore-duty families. Millington, Bartlett, Arlington, and north Shelby County.

Tullahoma and the Highland Rim

Arnold Air Force Base and the Arnold Engineering Development Complex anchor a stable, affordable market. Tullahoma, Manchester, Winchester, and Estill Springs across Coffee and Franklin counties.

Knoxville and East Tennessee

No major installation, but a large post-service veteran population and Oak Ridge employment. Knoxville, Maryville, Farragut, Oak Ridge, and Lenoir City.

Chattanooga and the Tennessee Valley

Lower prices than Nashville, growing fast, and close enough to north Georgia and north Alabama that buyers cross state lines. Chattanooga, Ooltewah, Cleveland, and Soddy-Daisy.

1. Pull your Certificate of Eligibility

Electronic, usually seconds. If yours needs manual review because of a discharge upgrade, a Guard or Reserve record, or a prior VA loan never restored, we file the paperwork and follow it.

2. Calculate entitlement, not a loan limit

Full entitlement means no VA cap. If you have a VA loan open elsewhere, we compute remaining entitlement against the applicable county limit, which is $832,750 in most of Tennessee and $1,029,250 in the Nashville metro.

3. Price the tax relief against the actual parcel

Relief covers the first $175,000 of market value. We pull the real appraised value, the real county and city rates, and the 25 percent assessment ratio, then escrow the number that is actually going to be billed.

4. Get an insurance quote on the address

Roof age and hail history drive Tennessee premiums. A real quote in week one keeps the debt-to-income ratio from moving under you at underwriting.

5. Order the termite report early

Required across Tennessee. On an older home, findings can trigger treatment or repairs, and that is a scheduling problem if you order it late.

6. Underwrite it, manually if the file needs it

A refer from automated underwriting is not a denial. VA allows a manual underwrite and we do them.

7. Close and handle the funding fee

Financed by default, waived entirely with a service-connected rating, and refundable if your rating came through after a prior VA closing.

Credit score

No minimum. VA does not publish one. We have closed VA loans in the 500s. If a lender quoted you 620, that was their rule.

Down payment

Zero with full entitlement. Not a low down payment. Zero.

Mortgage insurance

None, ever. The single biggest month-to-month advantage VA holds over FHA and conventional.

Debt-to-income ratio

No hard cap. VA uses residual income instead. We have closed well past 50 percent DTI when the residual math supported it.

Bankruptcy, foreclosure, short sale

Chapter 7 at two years. Chapter 13 can work mid-plan with trustee approval and twelve months of on-time payments. Foreclosure and short sale at two years, shorter with documented extenuating circumstances.

Property types

Single family, VA-approved condo, townhome, PUD, manufactured on a permanent foundation, and two to four units if you occupy one.

Told No by Another Tennessee Lender?

Send me the denial. I will tell you within a day whether it was a real VA rule, a misread of the state tax relief program, or that lender’s own overlay.

25+ years, 3,100+ closed loans, no lender overlays.

PCS to Fort Campbell with a report date that does not match closing

Orders in hand, report date set, and you may not have arrived. VA allows closing before you physically occupy, with a reasonable window to move in. We build the timeline around the report date, and we know the Clarksville market well enough to move fast.

You were told your income is too high for the tax relief

Check which program they quoted. The income cap belongs to the elderly and disabled homeowner program. The disabled veteran category has no income test. This is the single most common bad answer veterans get in Tennessee.

You expected a zero property tax bill and got a real one

Relief is capped at the first $175,000 of market value. Above that, you pay. If your lender escrowed zero, your payment is about to change. We would rather fix that before closing than after.

Buying in Williamson or Davidson County above the baseline

The Nashville MSA carries a high-cost conforming limit of $1,029,250. With full entitlement there is no VA cap at all, but if you are on remaining entitlement the county limit is what sets your zero-down ceiling.

Moving from a no-tax state and comparing payments

Tennessee has no income tax but it does have recording taxes and a 25 percent assessment ratio. The payment comparison people run in their head is usually wrong in both directions. We run it properly.

You want an investment property

VA occupancy rules require you to live in the home. For a pure rental we use DSCR loans that qualify on the property’s rent instead of your income.

Credit score in the 500s, zero down

Declined at another lender’s 620 overlay. VA publishes no score minimum. The file went manual, residual income cleared with room, and it closed. Full write-up on VA loans with a 541 credit score.

Lender escrowed zero taxes on a relief-eligible veteran

The prior lender read Tennessee tax relief as a full exemption and escrowed nothing on a $420,000 home. That is a payment shock waiting to happen and it can blow the debt-to-income ratio at the worst possible moment. Corrected before closing.

Chapter 13 still in repayment

Twelve months of on-time trustee payments plus written trustee approval. VA allows it. Most lenders will not touch it.

Seller paid off the buyer’s auto loan at closing

Dropped the DTI enough to turn a denial into an approval at the same price. Almost nobody in Tennessee structures deals this way.

Seller paid the lease break so the buyer could close now

An allowable VA concession, and in the Clarksville and Nashville rental markets it is real money. Details on the VA seller concessions page.

Rural file that stalled on well and septic

A Middle Tennessee purchase where the first lender did not flag the private water system until underwriting. VA has specific requirements. Handled in week one on our side and closed on schedule.

Down payment

VA: zero with full entitlement. Conventional: 3 to 5 percent minimum. FHA: 3.5 percent.

Mortgage insurance

VA: none, ever. Conventional: PMI until you reach 20 percent equity. FHA: upfront premium plus a monthly premium that usually runs the life of the loan.

Credit score floor

VA: no published minimum. Conventional: generally 620, with real pricing pain under 700. FHA: 580 for 3.5 percent down.

One-time fee

VA: the funding fee, financed, waived entirely with a service-connected rating. Conventional: none, but PMI monthly instead. FHA: 1.75 percent upfront plus the monthly.

Seller-paid costs

VA allows unlimited seller-paid closing costs plus up to 4 percent in concessions, and that bucket can pay off your debt or prepay your payments. Conventional caps at 3 to 9 percent by down payment with no debt-payoff allowance.

Tennessee recording taxes

The 11.5 cents per $100 indebtedness tax applies to any recorded deed of trust regardless of loan type. It is not a VA-specific cost, but VA’s uncapped seller-paid closing cost bucket is the easiest way to get someone else to pay it.

Refinancing later

VA: the IRRRL streamline needs no appraisal and no income documentation in most cases, and it carries a 0.5 percent funding fee. In a state that taxes recorded indebtedness, that matters more than it does elsewhere.

Myth: Disabled veterans pay no property tax in Tennessee

Not true. Tennessee reimburses tax on the first $175,000 of market value. Above that line you pay the normal bill. It is meaningful relief, but it is not an exemption and the state does not call it one.

Myth: I make too much money to qualify for the veteran relief

The income cap applies to the elderly and disabled homeowner program, not the disabled veteran program. There is no income test on the veteran category.

Myth: Tennessee taxes my interest and dividend income

Not anymore. The Hall income tax was fully repealed for tax years beginning on or after January 1, 2021. Tennessee now taxes no personal income of any kind.

Myth: The whole state is at the $832,750 conforming limit

Fourteen Nashville-area counties carry a high-cost one-unit limit of $1,029,250 for 2026. If you are buying in Williamson, Davidson, Rutherford, Wilson, or Sumner, that is the number in play.

Myth: I can redeem the house after a foreclosure sale

Tennessee eliminated the statutory right of redemption for foreclosures on deeds of trust executed on or after January 1, 2021. On a loan you take out today, there is no post-sale redemption period.

Myth: The seller always pays the transfer tax

Custom in most of Tennessee, but not law. It is negotiable, and under VA rules a seller can pay all of your normal recording costs with no percentage cap at all.

Myth: You can only use your VA loan once

Entitlement is reusable and restorable. Plenty of Tennessee buyers we work with are on their second or third VA loan.

Is there a minimum credit score for a VA loan in Tennessee?

No. VA publishes no minimum credit score. Lenders add their own, usually 620. The JD.Mortgage Team does not add one. If automated underwriting refers your file, we run a manual underwrite using the compensating factors VA recognizes: residual income, housing payment history, reserves, and documented explanations for past credit events.

Do disabled veterans pay property tax in Tennessee?

Usually yes, on part of the value. Tennessee runs a tax relief program that reimburses tax on the first $175,000 of the home’s market value for qualifying disabled veterans. Value above $175,000 is taxed normally. The state is explicit that this is a reimbursement, not an exemption, which is why calling it a full exemption leads to escrow surprises.

Is there an income limit for the Tennessee disabled veteran property tax relief?

No. The income limit applies to Tennessee’s separate elderly and disabled homeowner relief program. The disabled veteran category has no income cap. This is the single most common wrong answer veterans get in this state, and it costs people money every year.

How do I qualify for Tennessee veteran property tax relief?

Three paths. A service-connected permanent and total disability as determined by VA. A 100 percent permanent total rating tied to former prisoner of war status. Or paraplegia, permanent paralysis of both legs and lower body from a service-connected spinal cord or brain injury, legal blindness, or loss or loss of use of two or more limbs from a service-connected cause.

When is the deadline to apply for Tennessee property tax relief?

35 days after the property tax delinquency date, and the taxes have to be paid by that same date. That means you apply after the bill arrives, not at the beginning of the year. Applications go to your county trustee’s office, or to the city collecting official if the home is inside city limits.

Can a surviving spouse keep the Tennessee tax relief?

Yes, if the spouse does not remarry, owns the home, and lives in it as their sole residence. Tennessee also allows the surviving spouse to claim it in cases where the veteran would have qualified but never filed before death. Remarriage ends the benefit.

Does Tennessee tax military retirement pay?

No. Tennessee has no state income tax at all. Military retirement, active duty pay, Social Security, pensions, and IRA and 401(k) distributions are all untaxed. The Hall income tax on interest and dividends was fully repealed for tax years beginning on or after January 1, 2021.

What is the VA loan limit in Tennessee?

There is no VA loan limit if you have full entitlement. For conforming purposes, most Tennessee counties use the 2026 national baseline of $832,750 for a one-unit property. Fourteen Nashville MSA counties carry a high-cost limit of $1,029,250: Cannon, Cheatham, Davidson, Dickson, Hickman, Macon, Maury, Robertson, Rutherford, Smith, Sumner, Trousdale, Williamson, and Wilson. Those figures only matter when you already have a VA loan open somewhere else.

What is the Tennessee mortgage recording tax on a VA loan?

Tennessee charges recordation tax on the indebtedness at 11.5 cents per $100, with the first $2,000 excluded. On a $400,000 VA loan that is roughly $458. There is also a realty transfer tax of 37 cents per $100 of value on the sale itself, customarily paid by the seller. Under VA rules, recording costs are normal closing costs, so a seller can pay them with no percentage cap.

Does the recording tax apply to a Tennessee refinance?

Yes. The indebtedness tax applies every time a new deed of trust is recorded, calculated on the new loan amount. It is one of the reasons a VA IRRRL, which carries a 0.5 percent funding fee and needs no appraisal or income documentation in most cases, often makes more sense here than a full refinance.

How is property assessed in Tennessee?

Residential and farm property is assessed at 25 percent of appraised value under Tenn. Code Ann. 67-5-801. The tax rate applies to that assessed value, not to the full appraised value. Countywide reappraisal runs on a four, five, or six year cycle depending on the county, so a reappraisal year can move your assessment in one step.

Does Tennessee have a homestead exemption on property tax?

No general one. There is no blanket owner-occupant exemption. The only programs are the means-tested elderly and disabled relief, the disabled veteran relief, and a county-optional tax freeze for seniors. The homestead exemption people read about in Tennessee is a bankruptcy and creditor protection, which has nothing to do with your tax bill.

Is Tennessee a judicial or non-judicial foreclosure state?

Non-judicial. Foreclosure runs through a trustee sale under Tenn. Code Ann. Title 35, Chapter 5, with published notice and no court case. Tennessee eliminated the statutory right of redemption for deeds of trust executed on or after January 1, 2021, and deficiency judgments are permitted subject to the sale price test in 35-5-118.

Do I need a termite inspection on a Tennessee VA loan?

Effectively always. All of Tennessee falls inside the termite infestation zones where VA requires a wood destroying insect inspection report. VA has authorized as a local variance that the veteran may be charged that fee where the inspection is required, so older guidance saying the buyer can never pay for it is out of date.

Can homeowners insurance be a problem in Tennessee?

It can be, and it is mostly about roof age. Tennessee sits in the severe storm and hail corridor and premiums have risen sharply, with statewide homeowners premium volume growing from roughly $2.0 billion in 2016 to roughly $3.6 billion in 2024. Tennessee operates no FAIR Plan or wind pool, so there is no state backstop if carriers decline. Shop it in week one.

Can a seller pay off my debt at closing on a Tennessee VA loan?

Yes. VA allows a seller to pay off your credit cards, auto loan, or other debt as part of the 4 percent concession allowance, stacked on top of unlimited seller-paid closing costs. Retiring a high monthly payment lowers your debt-to-income ratio and can turn a denial into an approval on the same contract.

Do I pay the VA funding fee in Tennessee?

The funding fee is federal and identical in every state. It is waived entirely if you receive VA disability compensation or hold a service-connected disability rating. Otherwise it is financed into the loan rather than paid in cash. If your rating was granted after you closed a prior VA loan, you may be owed a refund on a fee you already paid.

Get a Real Tennessee VA Preapproval

Built on the actual relief cap, the actual county rate, and a real insurance quote. Not a national average and not a guess.

Lending in 49 states. VA, Non-QM, and manual underwriting.