Ready to buy your first home in Franklin but not sure which loan fits your budget? You are not alone. Choosing between FHA, conventional, VA, USDA, and state programs can feel overwhelming when you are juggling rent, savings, and a fast-moving market. In this guide, you will get a simple breakdown of your loan options, how down payment assistance works in Tennessee, what lenders need for pre-approval, and smart steps to stay within budget. Let’s dive in.
First-time loan options in Franklin
FHA loans at a glance
FHA loans are designed to help buyers with smaller savings or less-than-perfect credit. You can often put down 3.5% if you meet credit guidelines, and most borrowers pay mortgage insurance called MIP. You can learn more about FHA features and county loan limits by checking HUD’s FHA resources. In Franklin, pay attention to Williamson County loan limits, property condition rules, and potential repair requirements.
What to weigh:
- Lower down payment can help you get in the market sooner.
- Monthly MIP adds to your payment and lasts longer than conventional PMI in many cases.
- Appraisals and property standards can be stricter, which may require repairs before closing.
Conventional loans, including 3% options
Conventional conforming loans are widely used by first-time buyers with solid credit and steady income. Programs like Fannie Mae’s HomeReady and Freddie Mac’s Home Possible can allow 3% down with income limits and education requirements. Review program overviews at Fannie Mae and Freddie Mac to understand basics and borrower education needs.
What to weigh:
- Private mortgage insurance (PMI) is required if you put less than 20% down.
- PMI often costs less long term than FHA MIP for strong-credit buyers.
- Conventional loans have tighter credit and debt-to-income standards than FHA.
VA loans for eligible borrowers
If you are a veteran, active-duty service member, or a qualifying spouse, a VA loan can be a powerful option. VA loans commonly require no down payment, do not charge monthly PMI, and offer competitive rates. Explore the benefit at the U.S. Department of Veterans Affairs.
What to weigh:
- A funding fee may apply unless you are exempt.
- VA appraisals and property standards can be unique.
- Some condos or townhomes need VA approval to qualify.
USDA loans and area eligibility
USDA Rural Development loans can provide 0% down financing if the property is in an eligible area and your household income meets program limits. In suburban Franklin, many parcels will not be eligible, and eligibility is address-specific. Learn about the program at USDA Rural Development.
What to weigh:
- Income limits and property location rules apply.
- If you are looking at the edges of Williamson County, check an address before assuming USDA is off the table.
Tennessee programs through THDA
The Tennessee Housing Development Agency (THDA) partners with approved lenders to offer mortgages and down payment assistance for qualifying buyers. Some THDA programs can pair with FHA, VA, USDA, or conventional financing. Review general program information and participating lender guidance at THDA.
What to weigh:
- DPA often comes as a second lien that is deferred or repaid later. Terms vary by program.
- Borrower education is commonly required.
- Income, price limits, and availability can change, so verify current details with a THDA-approved lender.
Down payment assistance in Tennessee
Common DPA types
Down payment help can come in several forms. You will see:
- Grant or no-repayment funds when conditions are met.
- Deferred second mortgages paid back when you sell, refinance, or reach maturity.
- Low-interest second mortgages that you repay over time.
- Closing-cost assistance or matching grants tied to homebuyer education.
Where Franklin buyers should look
- THDA is the primary statewide resource for DPA and first-time buyer loans. Check THDA for current programs and participating lenders.
- Local city or county resources may exist at times. Reach out to Franklin or Williamson County housing or community development offices to confirm availability.
- Nonprofits and employers sometimes offer assistance or incentives.
- For unbiased guidance, connect with a counselor listed on HUD’s housing counseling directory for education and budgeting support.
How to confirm program fit
Before you apply, review:
- Income and purchase price limits, eligible property types, and primary-residence rules.
- Whether assistance is forgivable or repayable and what triggers repayment.
- Stacking rules with your loan type, such as combining THDA assistance with FHA or conventional financing.
Get pre-approved with confidence
Pre-qual, pre-approval, and underwritten approval
- Pre-qualification is a quick estimate based on what you report to a lender. It is a good first step but not strong for offers.
- Pre-approval verifies your credit, income, and assets and confirms a target loan amount. Sellers view this as more credible.
- Underwritten pre-approval goes further. A lender’s underwriter reviews your file upfront, often leaving only the appraisal and final verifications.
For a clear walkthrough of mortgage shopping and documents, review guidance from the Consumer Financial Protection Bureau.
Documents you will likely need
- Photo ID and Social Security number
- Recent pay stubs and W-2s or 1099s
- Federal tax returns in some cases
- Bank and asset statements
- A list of monthly debts
Timeline and lender shopping
- Many lenders can issue an initial pre-approval in 24 hours to a few days once documents are complete.
- From contract to close, expect several weeks for full underwriting.
- Get written estimates from 2 to 3 lenders and request a Loan Estimate to compare rates, fees, and lock policies.
About credit checks
- Soft pulls are common early and do not affect your score.
- Hard pulls for pre-approval can cause a small, temporary impact, which is normal when you are getting mortgage-ready.
What you can afford in Franklin
Your total monthly payment
Build your budget around the full payment, not just principal and interest. Include:
- Property taxes for Williamson County and the city, as applicable
- Homeowners insurance and flood insurance if required
- FHA MIP or conventional PMI when putting less than 20% down
- HOA or condo fees for planned communities and condo buildings
Upfront and closing costs
In addition to your down payment, plan for lender fees, title insurance, escrow, recording, and prepaid taxes and insurance. Ask lenders for a Loan Estimate early so you know your cash-to-close target.
What underwriters review
- Credit score minimums vary by loan type. FHA is often more flexible, while conventional needs stronger credit.
- Debt-to-income ratio matters for both housing and all debts combined.
- Some programs require cash reserves. Stable employment and clear documentation help.
Property factors that matter locally
- Appraisals and condition standards can require repairs before closing, especially on FHA.
- Flood zones affect insurance costs. Check a property’s flood status early in your search.
- Condos and some HOAs must meet program rules. Ask about FHA, VA, or other approval requirements if you are considering a condo.
A simple plan for first-time buyers
- Check your credit and fix errors early. Give yourself a few months if possible.
- Use a conservative budget that includes taxes, insurance, PMI, and HOA fees.
- Talk with 2 to 3 lenders. Include at least one with THDA experience and request written pre-approval estimates.
- If you need help with funds to close, review THDA programs and reach out to a counselor through HUD’s counseling directory.
- Verify property-specific items early, such as USDA eligibility if you are considering outlying areas, flood status, HOA rules, and condo project approvals.
- Partner with a local agent who knows Franklin’s neighborhoods and first-time buyer programs so your offers are structured to win.
Avoid common pitfalls
- Ignoring the total monthly payment. Taxes, insurance, HOA, and mortgage insurance can change your affordability picture.
- Skipping pre-approval. Sellers expect a current letter and may favor underwritten approvals.
- Overlooking DPA rules. Know if assistance is forgivable or a repayable lien and how it affects refinancing or resale.
- Stretching the budget on older homes without a repair cushion. Plan for maintenance and potential appraisal-required fixes.
- Assuming USDA is available everywhere. Franklin is largely suburban, so check address-specific eligibility.
How we help you move forward
Buying your first home should feel safe, clear, and achievable. You deserve a guide who protects your interests, explains your options in plain language, and coordinates with lenders from pre-approval to closing. Our team’s Protect and Serve mindset means we help you avoid costly missteps and negotiate with confidence.
If you are ready to compare loan options, explore down payment assistance, and build a realistic plan to buy in Franklin, reach out to Kenny Stephens. We will walk you through the process, connect you with trusted lenders, and help you secure the right home with the right financing.
FAQs
What is the minimum down payment for a first home in Franklin?
- You may qualify for 0% down with VA or USDA if eligible, 3% down with some conventional first-time buyer programs, or 3.5% down with FHA.
How do I find down payment assistance in Tennessee?
- Start with THDA for statewide programs, then check local options and talk with a HUD-approved counselor using HUD’s counseling directory.
Are USDA loans available in Franklin?
- USDA eligibility is parcel-specific and many suburban areas are ineligible, so confirm address eligibility through USDA Rural Development resources.
Is FHA or conventional cheaper long term?
- It depends on your credit, down payment, and mortgage insurance costs. Compare written estimates from lenders and review PMI versus FHA MIP over time.
How long does mortgage pre-approval last?
- Many pre-approvals last 60 to 90 days, but each lender sets its own policy, and rate locks are separate and typically shorter.
Who can help me understand loan rules and budgeting?
- Review borrower guides from the Consumer Financial Protection Bureau and talk with a HUD-approved housing counselor for education and budgeting support.
