Purchasing a home in Nashville may seem like a dream for first-time buyers or individuals lacking significant savings. However, there’s good news—there are several ways to buy a home in Nashville with low or no money down.
Whether you’re a local renter looking to transition into homeownership or relocating to Music City from another state, here’s everything you need to know to make your dream of owning a home a reality.
Explore Your Financing Options
Before beginning your home search, it’s essential to understand the mortgage programs available for buyers with limited financial resources.
Zero Down Payment Mortgages
- USDA Loans: Available in eligible rural areas—including some Nashville suburbs—USDA loans require no down payment and offer low interest rates to buyers who meet income and location requirements.
- VA Loans: If you’ve served in the military, are currently serving, or are a qualifying spouse, you may be eligible for a VA loan. These loans require no down payment or private mortgage insurance (PMI) and offer competitive interest rates.
Low Down Payment Mortgages
- FHA Loans: Backed by the Federal Housing Administration, FHA loans require as little as 3.5% down. They are ideal for buyers with lower credit scores or limited savings.
- Conventional Loans: Some lenders offer conventional loan programs with down payments as low as 3%, especially for first-time buyers or those meeting specific income thresholds.
Down Payment Assistance Programs
In Tennessee, several local and state programs help qualified buyers with down payment assistance (DPA).
- THDA’s Great Choice Home Loan Program: Through the Tennessee Housing Development Agency (THDA), eligible buyers can receive up to $6,000 in down payment assistance.
- NeighborhoodLIFT Program (availability may vary): In partnership with Wells Fargo, this program has provided down payment grants to buyers in the Nashville area.
- Local Grants and Nonprofits: Several Nashville-area nonprofits offer grants or forgivable loans to help cover down payments, particularly for low- to moderate-income families and essential workers.
Consider Seller Concessions or Gifted Down Payments
Even if you don’t qualify for a specific loan program, you can still reduce upfront costs with creative strategies:
- Seller Concessions: Some sellers may agree to pay part of your closing costs, reducing your out-of-pocket expenses.
- Gift Funds: Many mortgage programs allow down payments to be gifted by family members, friends, or charitable organizations. Be sure to properly document the gift for lender verification.
Work with a Local Real Estate Agent and Lender
A Nashville-based real estate agent can be a powerful ally in your homebuying journey. They can:
- Help you find homes eligible for no- or low-down payment programs
- Negotiate favorable terms with sellers
- Connect you with lenders experienced in affordable financing
Local professionals understand the nuances of Nashville’s housing market and can guide you toward the best deals.
Strengthen Your Financial Profile
Even with low or no money down, improving your financial position will help you qualify for better loan terms:
- Check Your Credit Score: A higher score usually results in better mortgage rates.
- Reduce Your Debt: Lenders assess your debt-to-income ratio to determine affordability.
- Get Preapproved: Preapproval shows sellers you’re a serious buyer and strengthens your offer in a competitive market.
Explore Affordable Neighborhoods Near Nashville
If home prices within the city feel overwhelming, consider nearby communities that may offer more affordable options—and may even qualify for USDA loans:
- Antioch
- Donelson
- Madison
- La Vergne
- Smyrna
These neighborhoods often provide budget-friendly housing and are within commuting distance of downtown Nashville.
Final Thoughts
You don’t need a large down payment to buy a home in Nashville. With the right loan program, local assistance, and a knowledgeable real estate team, homeownership in Music City is within reach—even if you’re working with limited funds.