Which Loan Is Right for Me
A side-by-side comparison of Tennessee's major mortgage programs to help you identify the best fit for your financial situation and goals.
Most Tennessee home buyers qualify for more than one loan program. The right choice depends on your credit score, available down payment, military service history, property location, and long-term financial goals. Use this comparison as a starting point, then talk to Morgan Hardy about which program makes the most sense for your specific numbers.
| Program | Min. Down | Min. Credit | Mortgage Insurance |
|---|---|---|---|
| Conventional | 3–5% | 620 | PMI until 20% equity (cancellable) |
| FHA | 3.5% | 580 | MIP for life of loan (if <10% down) |
| VA | 0% | 580–620 (lender overlay) | No PMI. One-time funding fee (waived for disabled vets) |
| USDA | 0% | 640 (for automated approval) | Annual fee of 0.35% (lower than FHA) |
| Jumbo | 10–20% | 700–720 | None (no PMI on most jumbo products) |
Conventional Loans
Best for: Borrowers with good credit (680+) and at least 5% down. Best long-term cost for most buyers.
Not ideal for: Borrowers with credit below 640 or very limited savings.
FHA Loans
Best for: First-time buyers, lower credit scores (580–679), or limited savings. More flexible qualification.
Not ideal for: Borrowers who want to avoid lifetime mortgage insurance or need loans above FHA limits.
VA Loans
Best for: Eligible veterans and active-duty service members. Best available program for those who qualify.
Not ideal for: Non-military borrowers. Investment properties and second homes.
USDA Loans
Best for: Buyers in eligible rural/suburban Tennessee areas within income limits. Excellent zero-down option.
Not ideal for: Properties in major metro cores. Borrowers above income limits.
Jumbo Loans
Best for: Buyers in Nashville, Brentwood, and other higher-priced markets purchasing above $766,550.
Not ideal for: Borrowers with limited reserves, lower credit, or high debt ratios.
Decision framework
Are you a veteran or active-duty service member? If yes, start with VA. It's almost always the best option for eligible borrowers — zero down, no PMI, competitive rates.
Is the property in a rural or suburban area outside a major metro? Check USDA eligibility. If the property qualifies and you're within income limits, USDA offers zero-down financing with lower ongoing costs than FHA.
Is your credit score below 680? FHA is typically more forgiving on credit and offers more predictable qualification. Conventional pricing gets expensive below 680.
Do you have 20% or more to put down? Conventional with 20% down eliminates PMI entirely and usually offers the best long-term cost.
Is the purchase price above $766,550? You'll need jumbo financing regardless of other factors.
Get a personalized comparison
The right loan depends on your specific numbers. Morgan Hardy can run a side-by-side cost comparison for the programs you qualify for — showing total costs over your expected ownership period, not just the monthly payment.
Contact Morgan Hardy