Nashville, Memphis, Knoxville and Chattanooga: what a first home really costs

Ask four friends in four Tennessee cities what it costs to own a home and you'll get four different answers. Some of that is the price of the house. A lot of it is stuff nobody puts on the listing: the property tax rate, the income limit for state help, and whether the city has money of its own to add. Let's line them up.

What's the same everywhere

Before the differences, the common ground. These don't change with your zip code:

• THDA's purchase price limit is $500,000 in every county.
• Credit minimum: 640 for every borrower. Debt-to-income cap: 45%.
• Lender fees on a THDA first mortgage are capped at $1,800.
• The state transfer tax is $0.37 per $100 and the mortgage tax is $0.115 per $100. See the transfer tax guide.
• The Heroes Plus menu is the same: a 5% loan up to $15,000, a $6,000 or $10,000 forgivable loan, or up to $25,000 on new construction.

Income limits by metro

THDA sets its household income limits by county, and the spread is wide. These are from the chart effective Aug. 1, 2026:

So a two-teacher household earning $125,000 could fit the limit in Nashville but be over it in Memphis, Knoxville or Chattanooga. The Nashville-area figure also applies in Williamson, Rutherford, Sumner, Wilson and several other nearby counties. Check yours on the income limits page.

Property taxes: the real monthly difference

Tennessee taxes homes on 25% of the appraised value, then applies a rate per $100 of that assessed value. Inside a city, you usually pay both the county rate and the city rate. Here's how the 2025 rates in the Comptroller's Tax Aggregate Report play out on a home appraised at $250,000 (assessed value $62,500). Example only; rates are reset each year and reappraisals change values.

Nashville works a little differently because the city and county are one Metro government. The Comptroller lists Davidson's countywide rate at $2.782, and homes in the Urban Services District pay an added rate on top. Ask the Davidson County Trustee for the rate on your address.

Outside city limits, you'd pay only the county rate: $2.69 in Shelby, $1.554 in Knox and $1.5157 in Hamilton for 2025. That's a big part of why a house just past the city line can carry a noticeably smaller payment.

City and county help, metro by metro

Nashville

Metro Nashville doesn't run its own down payment program. The main local player is The Housing Fund, a Nashville nonprofit that offers a statewide down payment loan of $5,000 to $35,000 and a community land trust for first-time buyers at or below 80% of the area median income. In a land trust, you own the house and lease the land, which lowers the price in exchange for resale limits.

Memphis

Memphis has the most city programs. Its citywide program and incentive programs list up to 10% of the price, max $25,000, subject to funding. There are versions for low- to moderate-income buyers, for buyers in 15 designated areas up to 200% of median income, and for city police, front-line firefighters and Memphis-Shelby County Schools staff with no income limit. The home has to be inside Memphis city limits. Shelby County runs a smaller program of its own outside that.

Knoxville

The City of Knoxville's down payment program says applications are closed except for homes built by three nonprofit developers: East Tennessee Housing Development Corp., Home Source East Tennessee and Neighborhood Housing Inc. Knox County government doesn't list a homebuyer program. For most Knoxville buyers, THDA's Heroes Plus is the main help.

Chattanooga

Chattanooga's city program offers up to $15,000 as a forgivable loan, and up to $21,000 total when paired with THDA through a city partnership. You need to buy inside city limits under a $400,000 cap, be a first-time buyer under 120% of median income, and bring at least $1,000 of your own. Hamilton County also has a CNE and RockPointBank program of $10,000 to $50,000 for buyers at 80% of median income, with a 660 credit minimum.

Targeted tracts in every big county

Davidson, Shelby, Knox and Hamilton all have targeted census tracts on THDA's list. If the home you love sits in one, the three-year first-time buyer rule doesn't apply. It's worth asking your lender to check the address. The targeted areas guide explains how that works.

Putting it together

Here's how I'd sum it up over coffee:

• Nashville area: higher income limits make THDA easier to qualify for, but there's little city money, so Heroes Plus and The Housing Fund do the heavy lifting.
• Memphis: the city tax rate is the highest of the four, but the job-based city help is the most generous if you're an MPD officer, a firefighter or an MSCS employee.
• Knoxville: a moderate tax rate and a low county-only rate, with limited city help unless you buy a nonprofit-built home.
• Chattanooga: the clearest stacking deal with THDA, plus a second county program for lower incomes.

Whatever city you love, pull the tax bill for the exact house from the county trustee's website before you write an offer. Then check your eligibility and we'll show which state and local programs fit your county.

Things people ask

Keep reading

• Picking your Heroes Plus down payment option
• Ten-month paychecks, summer gaps and a THDA loan for teachers
• Buying near Fort Campbell with a VA loan and Homeownership for Heroes
• THDA's targeted counties and the first-time buyer rule
• Tennessee's transfer tax and mortgage tax at closing
• Property taxes on a Tennessee first home, and who gets relief
• No state income tax in Tennessee: what lenders actually count
• USDA loans just past the city limits
• Getting every borrower to 640 for a THDA loan