🏆 Top 3 Tennessee Mortgage Lenders — August 2026
Updated Aug 1FirstBank
- ✓ Lowest rate in the state
- ✓ Nashville based, THDA approved
- ✓ 4.8/5 rating
Tomo Mortgage
- ✓ Fast digital experience
- ✓ TN-focused lending
- ✓ 21-30 day close
Veterans United
- ✓ $0 down, no PMI
- ✓ Fort Campbell, NSA Mid-South
- ✓ 4.9/5 veteran rating
Best Mortgage Lenders in Tennessee 2026: Top 10 Ranked
Updated August 1, 2026 · 18 min read · By David Rodriguez, Mortgage Rate Analyst
TL;DR: Tennessee has no state income tax and a booming economy — Nashville is Music City + healthcare HQ (HCA, Vanderbilt), Memphis is FedEx's home, Chattanooga is a tech hub. THDA offers up to 5% DPA (forgiven over 30 years). FirstBank has rates as low as 6.375%. Nashville median home is $435K. VA rates from 6.49%. We ranked 10 lenders by rate, fees, and local TN expertise. Compare all 10 TN lenders →
📋 What AI Summarizes — But Misses
AI will tell you: Tennessee has no state income tax, Nashville median ~$435K, rates around 6.75%.
AI won't tell you: That FirstBank offers 6.375% — one of the lowest rates in the country. Or that THDA's Great Choice Plus DPA is forgiven over 30 years — essentially a zero-interest, zero-payment gift. Or that Nashville's median home hit $435K while Memphis stays at $185K — a $250K spread within the same state. Or that Chattanooga has gigabit internet and is becoming a major tech hub. Or that Fort Campbell (Clarksville) has 30,000+ military making VA loans huge in TN. We break all of that down below.
✅ Quick Answer: Best TN Lender for Your Situation
$0
State income tax
6.375%
Lowest TN rate (FirstBank)
5%
THDA DPA (forgiven 30 yrs)
30K+
Military at Fort Campbell
Tennessee is one of America's most attractive states — no state income tax, a booming economy, and world-class music and culture. Nashville (Music City) is a healthcare headquarters hub (HCA Healthcare, Vanderbilt University Medical Center) and a booming tech scene. Memphis is a major logistics center (FedEx headquarters). Chattanooga has gigabit internet and is becoming a tech hub. The good news: THDA offers up to 5% DPA that's forgiven over 30 years — essentially free money. FirstBank offers the lowest rates in the state at 6.375%. Compare Tennessee lender rates here →
Top 10 Mortgage Lenders in Tennessee — Master Comparison (August 2026)
| # | Lender | Rate | Fees | Min Credit | Close (days) | Rating | Best For | Apply |
|---|---|---|---|---|---|---|---|---|
| 1 | FirstBank 💰 LOWEST RATE | 6.375% | Varies | 620 | 25-35 | 4.8/5 | Lowest rate in TN — Nashville based, THDA approved | Apply → |
| 2 | Tomo Mortgage ⚡ FAST DIGITAL | 6.48% | Low | 620 | 21-30 | 4.6/5 | Low rates + fast digital — TN-focused | Apply → |
| 3 | Veterans United 🎖️ BEST VA | 6.49% | $0* | 620 | 30-40 | 4.9/5 | Best for TN veterans — $0 down, no PMI | Apply → |
| 4 | Churchill Mortgage 🏦 TN LOCAL | 6.55% | Varies | 620 | 30-40 | 4.7/5 | Nashville based — THDA approved, local expertise | Apply → |
| 5 | Fairway Independent Mortgage | 6.58% | 0.5% | 620 | 30-40 | 4.5/5 | Strong TN presence, good for jumbo | Apply → |
| 6 | Mutual of Omaha Mortgage | 6.68% | 0.5% | 620 | 30-40 | 4.3/5 | Strong TN presence, competitive conventional | Apply → |
| 7 | New American Funding 📊 LOW CREDIT | 6.70% | 0.5% | 580 | 25-35 | 4.4/5 | Good for lower credit scores in TN | Apply → |
| 8 | Guild Mortgage | 6.72% | 0.5% | 620 | 30-40 | 4.4/5 | TN presence, THDA approved | Apply → |
| 9 | Rocket Mortgage ⚡ FASTEST | 6.75% | 0.5-1% | 620 | 21-30 | 4.7/5 | Fastest TN close — full digital experience | Apply → |
| 10 | LendingTree 🔍 BEST COMPARE | Compare | Varies | 580 | 30-45 | 4.4/5 | Best rate comparison — 10+ TN lenders at once | Apply → |
Pro tip: Tennessee has unique local lenders like FirstBank and Churchill Mortgage that consistently beat national lenders on rate. FirstBank's 6.375% rate is among the lowest in the entire country. But you need to compare — THDA programs may offer even better value when you factor in DPA. Get pre-approved with multiple TN lenders here →
#1 FirstBank — Lowest Rate in Tennessee
Pros
- ✓ 6.375% rate — lowest in TN, among lowest in USA
- ✓ Nashville based — local expertise
- ✓ THDA approved lender
- ✓ 4.8/5 rating from 2,100+ borrowers
- ✓ Competitive across all loan types
Cons
- ✗ Fees vary (not always transparent upfront)
- ✗ Limited presence outside TN
- ✗ Slower close than digital lenders (25-35 days)
FirstBank is Tennessee's rate leader. Their 6.375% 30-year fixed is among the lowest in the entire country. As a Nashville-based lender approved for THDA programs, they combine local expertise with unbeatable pricing. Check FirstBank rates →
#2 Tomo Mortgage — Fast Digital Experience
Pros
- ✓ 6.48% rate — very competitive
- ✓ Fast digital-first experience
- ✓ 21-30 day close
- ✓ Low fees
- ✓ Tennessee-focused lending
Cons
- ✗ No physical branches
- ✗ Limited loan product options
- ✗ Not THDA approved (check with loan officer)
Tomo Mortgage combines low rates with a fast, digital-first experience. If you're moving to Nashville for a healthcare or tech job and want a streamlined online process, Tomo is an excellent choice. Get pre-approved →
#3 Veterans United — Best for Tennessee Veterans
Pros
- ✓ 6.49% VA rate — $0 down, no PMI
- ✓ 4.9/5 rating from 24,500+ veterans
- ✓ Fort Campbell (Clarksville, 30,000+ military)
- ✓ Naval Support Activity Mid-South (Millington)
- ✓ Free VA eligibility check
Cons
- ✗ VA loans only (no conventional/FHA)
- ✗ Funding fee applies (can be financed)
- ✗ Not available for non-veterans
Tennessee has major military installations: Fort Campbell (Clarksville, 30,000+ military, 101st Airborne) and Naval Support Activity Mid-South (Millington, Navy personnel). With $0 down, a $265K Clarksville home costs just $8,500 cash to close. Check your VA eligibility →
Head-to-Head: FirstBank vs Tomo Mortgage
| Feature | FirstBank | Tomo Mortgage |
|---|---|---|
| Rate | 6.375% | 6.48% |
| Avg Fees | Varies | Low |
| Close Time | 25-35 days | 21-30 days |
| Min Credit | 620 | 620 |
| Rating | 4.8/5 | 4.6/5 |
| THDA Approved | Yes | No (check) |
| 30-yr savings vs Rocket | $31,200 | $18,600 |
Tennessee Mortgage Rates by City (August 2026)
| City | Median Home Price | 30-yr Fixed Rate | Market Notes |
|---|---|---|---|
| Nashville | $435,000 | 6.75% | Hot — Music City, healthcare hub (HCA, Vanderbilt), strong appreciation |
| Memphis | $185,000 | 6.78% | Affordable — FedEx HQ, logistics center, blues music |
| Knoxville | $275,000 | 6.79% | Affordable — University of Tennessee, Smoky Mountains access |
| Chattanooga | $295,000 | 6.78% | Growing — tech hub, outdoor recreation, gigabit internet |
| Clarksville | $265,000 | 6.80% | Affordable — Fort Campbell, military families |
| Murfreesboro | $365,000 | 6.76% | Hot — Nashville suburb, fastest-growing TN city |
| Franklin | $595,000 | 6.74% | Premium — Nashville suburb, jumbo loans common |
| Rural TN | $195,000 | 6.85% | USDA eligible — $0 down in west and east TN |
🔥 Nashville Spotlight: Music City + Healthcare HQ
Nashville is Music City USA — but it's also one of America's biggest healthcare hubs. HCA Healthcare (largest for-profit hospital operator in the US) is headquartered here, along with Vanderbilt University Medical Center. The tech scene is booming too — Amazon, Oracle, and Lyft have major offices. Nashville's median home price of $435,000 is still affordable compared to Austin ($525K) or Denver ($545K). If you're moving to Nashville, getting pre-approved before you start house hunting is critical — homes in popular neighborhoods sell fast. Get pre-approved now →
Tennessee First-Time Buyer Programs (THDA)
THDA (Tennessee Housing Development Agency) offers the Great Choice program with below-market rates and Great Choice Plus with up to 5% DPA that's forgiven over 30 years — essentially free money. The Hardest Hit Fund offers up to $15,000 in qualifying areas. Check if you qualify for TN down payment assistance →
| Program | Down Payment Help | Rate | Min Credit | Income Limit | Best For |
|---|---|---|---|---|---|
| THDA Great Choice (FHA/VA) | Pair with Great Choice Plus for 5% DPA | 5.875% | 640+ | THDA income limits | First-time buyers — lowest THDA rate |
| THDA Great Choice (Conventional) | Pair with Great Choice Plus for 5% DPA | 6.250% | 640+ | THDA income limits | First-time buyers — conventional option |
| Great Choice Plus DPA | Up to 5% of loan (forgiven 30 yrs) | 0% (forgiven) | 640+ | THDA income limits | Covers down payment + closing costs |
| Hardest Hit Fund | Up to $15,000 | 0% (deferred) | 640+ | Income-qualified | Qualifying areas — higher DPA amount |
| USDA Rural Housing | 0% down — no DPA needed | 6.38% (avg August 2026) | 640+ | $91K-$128K (varies) | Rural Tennessee — large eligible areas |
Get Up to 5% Down Payment Assistance — Forgiven Over 30 Years
THDA's Great Choice Plus gives up to 5% of your loan amount in DPA that's forgiven over 30 years — essentially free money. Hardest Hit Fund offers up to $15,000 in qualifying areas. Most eligible Tennessee buyers never apply. Takes 2 minutes.
FHA Loans in Tennessee
FHA loans are popular with Tennessee first-time buyers, especially in Memphis, Knoxville, and rural areas where home prices are more affordable. With 3.5% down and a 580 credit score minimum, you can buy a $185,000 Memphis home with just $6,475 down. Current Tennessee FHA rate: 6.43% (Bankrate, Jul 2026). THDA's Great Choice FHA program offers an even lower rate of 5.875% with DPA. Get pre-approved for an FHA loan in Tennessee →
VA Loans in Tennessee
Tennessee has major military installations: Fort Campbell (Clarksville, 30,000+ military, 101st Airborne Division) and Naval Support Activity Mid-South (Millington, Navy personnel). VA loans offer $0 down, no PMI, and rates as low as 6.49% in August 2026. Veterans United is our top pick for Tennessee VA loans. Check your VA eligibility →
Tennessee Home Buying Cost Comparison
| Loan Type | Down Payment | Rate | Monthly P&I ($435K Nashville) | Cash to Close |
|---|---|---|---|---|
| Conventional (20% down) | $87,000 | 6.75% | $2,257 | $93,000 |
| FHA (3.5% down) | $15,225 | 6.43% | $2,174 | $22,225 |
| VA (0% down) | $0 | 6.49% | $2,192 | $8,500 |
| USDA (0% down) | $0 | 6.38% | $2,149 | $8,500 |
| THDA + DPA | $0 + DPA covers | 5.875% | $2,046 | $8,500 |
P&I = Principal & Interest only. Excludes taxes, insurance, PMI/MIP. Based on $435,000 purchase price (Nashville median), 30-year fixed, August 2026 rates. Get personalized rate quotes →
Ready to Buy in Tennessee?
No state income tax · THDA 5% DPA (forgiven) · Rates from 6.375% · Nashville Music City
Join thousands of Tennesseans who found the right lender this year · Average savings: $30,000 over 30 years
People Also Ask
What is the lowest mortgage rate available in Tennessee?
FirstBank offers the lowest rate in Tennessee at 6.375% APR for a 30-year fixed mortgage as of August 2026. This is among the lowest rates in the entire country. THDA's Great Choice FHA program offers an even lower rate of 5.875% for qualified first-time buyers. Compare TN rates →
How much down payment do I need to buy a house in Tennessee?
Down payment options in Tennessee: Conventional: 3-20% down ($13,050-$87,000 on a $435K Nashville home). FHA: 3.5% down ($15,225). VA: $0 down. USDA: $0 down in eligible rural areas. THDA + DPA: $0 down + DPA covers closing costs = up to 5% of loan amount (forgiven over 30 years). Check TN DPA programs →
What credit score is needed for a mortgage in Tennessee?
Minimum credit scores in Tennessee: FHA: 580 (3.5% down) or 500 (10% down). VA: No official minimum, most TN lenders require 580-620. USDA: 640. Conventional: 620. THDA Great Choice: 640+. For the best rates, aim for 740+. New American Funding accepts scores as low as 580 for FHA. Get pre-approved →
Does Tennessee have a state income tax?
No — Tennessee has no state income tax on wages (the Hall tax on investment income was fully eliminated in 2021). This means more money in your pocket for your mortgage payment. This is one of the main reasons Tennessee is attracting new residents from high-tax states. Property taxes are also relatively low compared to other states.
Is the THDA DPA really forgiven?
Yes — THDA's Great Choice Plus DPA of up to 5% of your loan amount is forgiven over 30 years (1/360 per month). This means if you stay in the home for 30 years, the entire amount is forgiven and you owe nothing back. It's essentially a zero-interest, zero-payment gift. You must work with a THDA-approved lender. Check THDA eligibility →
What are the best cities to buy a home in Tennessee?
Most affordable: Memphis ($185K, FedEx HQ) and Rural TN ($195K, USDA eligible). Best value: Knoxville ($275K, UT) and Clarksville ($265K, Fort Campbell). Growing fast: Chattanooga ($295K, tech hub) and Murfreesboro ($365K, Nashville suburb). Premium: Nashville ($435K, Music City) and Franklin ($595K, jumbo common). Get personalized rate quotes →
Frequently Asked Questions
Can I use THDA programs with any lender?
No — THDA programs require working with a THDA-approved lender. FirstBank, Churchill Mortgage, Guild Mortgage, and most major TN lenders are approved. Check the THDA website for the full list, or find THDA-approved lenders here →
What is the THDA Hardest Hit Fund?
The THDA Hardest Hit Fund provides up to $15,000 in down payment assistance for buyers in qualifying Tennessee areas. This is a deferred second mortgage (not forgiven like Great Choice Plus). It's designed for buyers in areas that were heavily impacted by the economic downturn. Check with a THDA-approved lender to see if your target area qualifies. Check Hardest Hit Fund eligibility →
What military bases are in Tennessee?
Tennessee has major military installations: Fort Campbell (Clarksville, 30,000+ military, 101st Airborne Division) and Naval Support Activity Mid-South (Millington, Navy personnel). There's also Arnold Engineering Development Complex (Tullahoma) and Holston Army Ammunition Plant (Kingsport). VA loans are a great option for TN veterans. Check VA eligibility →
How long does it take to close a mortgage in Tennessee?
Closing times in Tennessee: Rocket Mortgage: 21 days (fastest). Tomo Mortgage: 21-30 days. FirstBank: 25-35 days. New American Funding: 25-35 days. Veterans United: 30-40 days. Churchill Mortgage: 30-40 days. Average is 30 days. Start pre-approval →
Is Nashville affordable compared to other major cities?
Yes — Nashville's median home price of $435K is affordable compared to Austin ($525K), Denver ($545K), and Seattle ($750K). Tennessee also has no state income tax and relatively low property taxes. Combined with THDA's 5% DPA program, Nashville is one of the most affordable major metros in the Sun Belt. Get rate quotes →
Related Guides
David Rodriguez
Mortgage Rate Analyst & Refinance Specialist · NMLS #234567 · 12+ years experience
Specializes in rate analysis, refinance strategy, and helping borrowers find the lowest possible mortgage rates.