Looking for jumbo loans in Tennessee? You’ve come to the right place. We have a complete and detailed guide featuring the most up-to-date loan limits right here.
In 2021, home prices surged by an unprecedented 18%. Since then, depending on where you live, they’ve either remained relatively stagnant or experienced a slight uptick. As of January 2025, home prices in Tennessee have experienced a 5.3% year-over-year growth, making it one of the most in-demand states in the entire country.
When you’re looking to purchase an upscale home or luxury property in Tennessee, understanding your financing options becomes crucial to your success.
For high-value properties that exceed conventional loan limits, jumbo loans provide the solution you need. This comprehensive guide explores jumbo loans in detail, with special attention to Tennessee’s diverse real estate markets for 2025.
What Are Jumbo Loans and When Do You Need One?
Jumbo loans come into play when your desired mortgage exceeds the conforming or FHA loan limits set by the government. In Tennessee’s dynamic real estate market, these limits vary by county and significantly impact whether you’ll require jumbo financing.
As home values continue to appreciate across Tennessee’s most desirable areas, more buyers are finding themselves in need of jumbo loan options. Understanding when and why you might need jumbo financing can help you navigate the luxury home-buying process more effectively.
2025 Tennessee Conforming and FHA Loan Limits by County
Here’s the latest breakdown for the top six most populated Tennessee counties:
| County | FHA Loan Limit | Conforming (FHFA) Loan Limit |
| Shelby (903,727) | $806,500 | $524,225 |
| Davidson (717,317) | $989,000 | $989,000 |
| Knox (500,669) | $806,500 | $524,225 |
| Hamilton (379,864) | $806,500 | $524,225 |
| Rutherford (367,101) | $989,000 | $989,000 |
| Williamson (264,460) | $989,000 | $989,000 |
If your county isn’t on this list, consult the full list from Bankrate.
These limits directly determine when jumbo financing becomes necessary for your property purchase. Any loan amount that exceeds the conforming loan limit for your specific county would be classified as a jumbo loan.
Tennessee Counties with Higher Loan Limits
Certain counties have higher conforming and FHA loan limits ($989,000), reflecting more expensive housing markets:
- Cannon
- Cheatham
- Davidson (Nashville)
- Dickson
- Macon
- Maury
- Robertson
- Rutherford
- Smith
- Sumner
- Trousdale
- Williamson (Franklin)
- Wilson
If you’re purchasing in these counties, you have more flexibility before a jumbo loan becomes necessary.
However, premium luxury homes may still require jumbo financing even in these higher-limit areas.
Key Tennessee Markets for Jumbo Loans
Let’s explore specific markets where jumbo loans are particularly relevant and examine the unique characteristics of each:
1. Knoxville
- Avg Home Price: $382,000 (source)
- Conforming Limit: $524,225
When You Might Need a Jumbo Loan: Even though Knoxville’s average home price falls comfortably below the conforming limit, buyers targeting premium neighborhoods often require jumbo financing. The city’s luxury market has grown substantially in recent years, with high-end properties commanding prices well above conforming limits.
Premium Neighborhoods:
- Sequoyah Hills – Historic homes with expansive lots and Tennessee River views
- Farragut – Newer luxury developments with high-end amenities
- Gettysvue – Golf course properties and custom estates
- Waterfront properties along Fort Loudoun Lake and the Tennessee River
Jumbo financing becomes necessary for Knoxville’s most prestigious homes, particularly those with custom features, significant acreage, or spectacular views. The city’s relatively affordable luxury market compared to Nashville makes it an attractive destination for high-end buyers.
2. Nashville
- Avg Home Price: $470,000 (source)
- Conforming Limit: $989,000
When You Might Need a Jumbo Loan: Nashville’s booming luxury real estate market has flourished as the city’s national profile has grown. Despite having one of Tennessee’s highest conforming limits at $989,000, many of Nashville’s finest properties exceed this threshold, making jumbo loans a common necessity.
Premium Neighborhoods:
- Belle Meade – Historic mansions and new luxury builds
- Green Hills – Upscale homes near premium shopping
- Forest Hills – Expansive lots and privacy
- The Gulch – Luxury high-rise condominiums
- Brentwood – Executive homes and estates
Nashville’s status as a destination for wealthy transplants, music industry executives, and healthcare leaders has driven prices for premium properties well beyond conforming limits. Jumbo loans are commonplace in these areas, with properties frequently selling for $1.5-5 million or more.
3. Franklin
- Avg Home Price: $875,625 (source)
- Conforming Limit: $989,000
When You Might Need a Jumbo Loan: Franklin’s charm, historic downtown, and excellent schools have made it one of Tennessee’s most desirable communities. With an average home price approaching the conforming limit, jumbo loans are frequently needed for premium properties.
Premium Neighborhoods:
- Westhaven – Master-planned luxury community
- Berry Farms – New upscale mixed-use development
- Leiper’s Fork – Rural estates and historic properties
- Downtown Franklin – Restored historic homes
Individual home values frequently surpass the $1 million mark, meaning jumbo loans are typically required for Franklin’s top-tier properties. The area’s historical homes and new luxury developments often command prices that necessitate jumbo financing solutions, with many properties selling for $2 million or more.
4. Memphis
- Avg Home Price: $144,131
- Conforming Limit: $524,225
When You Might Need a Jumbo Loan: Although the average Memphis home price is significantly below the conforming limit, the city has distinct pockets of luxury real estate where jumbo loans become necessary.
Premium Neighborhoods:
- Germantown – Upscale suburban estates
- East Memphis – Established luxury neighborhoods
- River Oaks – Prestigious gated communities
- Mud Island – Riverfront properties with skyline views
- Central Gardens – Historic mansions and restored homes
These premium locations feature luxury homes with values easily above $600,000 to $1 million. Buyers interested in these areas often find jumbo loans necessary to finance their purchases. Historic mansions in areas like Central Gardens or new luxury developments may require jumbo financing despite the city’s overall affordable housing market.
Benefits of Jumbo Loans for Tennessee Luxury Buyers
Despite the more stringent requirements, jumbo loans offer several advantages for high-end property buyers:
1. Higher Borrowing Power
Jumbo loans allow you to borrow beyond conforming limits, giving you access to Tennessee’s most desirable luxury properties without being limited by conventional loan restrictions.
2. Competitive Interest Rates
While jumbo rates were historically higher than conforming loans, today’s jumbo loans often feature competitive interest rates, especially for well-qualified borrowers with excellent credit and substantial assets.
3. Flexible Loan Terms
Many jumbo loan programs offer various term options, including 15, 20, and 30-year fixed-rate mortgages as well as adjustable-rate options that might better suit your financial strategy.
4. Single Loan Solution
Rather than combining multiple loans (like a first and second mortgage), a jumbo loan provides a single loan solution with one payment and potentially better overall terms.
5. Prestige Properties
Jumbo loans give you access to Tennessee’s most prestigious addresses and unique properties that often appreciate faster than the general housing market.
The Jumbo Loan Application Process in Tennessee
Pre-Approval Stage
- Credit evaluation – Lenders will conduct a thorough review of your credit history
- Income verification – Expect to provide extensive documentation of all income sources
- Asset assessment – Verification of your savings, investments, and other assets
- Debt analysis – Comprehensive review of your existing financial obligations
Property Evaluation
- Professional appraisal – Often involving specialized luxury property appraisers
- Home inspection – Thorough examination of the property’s condition
- Title search – Verification of clean title and property history
- Additional evaluations – May include specialized inspections for unique features
Closing Process
- Final approval – Comprehensive underwriting review
- Closing disclosure – Detailed breakdown of all loan terms and costs
- Document signing – Executing the loan agreement and related paperwork
- Funding – Disbursement of the loan amount to the seller
Choosing the Right Jumbo Loan Lender in Tennessee
When seeking jumbo loan financing in Tennessee, consider these factors:
1. Local Market Knowledge
Work with lenders who understand Tennessee’s unique real estate markets and the specific characteristics of luxury properties in your target area.
2. Specialized Jumbo Loan Experience
Choose lenders with extensive experience in jumbo loans and a track record of successful closings on luxury properties.
3. Competitive Rates and Terms
Compare offers from multiple lenders to ensure you’re getting the most favorable interest rates and loan terms.
4. Personalized Service
Luxury property transactions often have unique aspects that require personalized attention and customized solutions.
5. Reputation and Reliability
Research lender reviews and ask for recommendations from real estate professionals who specialize in luxury properties.
Questions to Ask Your Jumbo Loan Lender
When evaluating lenders for jumbo loans in Tennessee, ask:
- What are your specific jumbo loan requirements for Tennessee properties?
- Do you have experience with properties in my target neighborhood?
- What are your current jumbo loan interest rates and fee structures?
- What is your typical closing timeline for jumbo loans?
- Do you offer any specialized programs for luxury buyers?
- How do you handle unique property types or features?
- What documentation will I need to provide?
- Are there any prepayment penalties or other restrictions?
Final Thoughts: Navigating Tennessee’s Luxury Real Estate Market
Whether you’re purchasing a historic mansion in Nashville’s Belle Meade, a waterfront estate in Knoxville, a luxury farm in Franklin’s Leiper’s Fork, or a prestigious property in Memphis’ East Memphis, jumbo loans provide the financial foundation for accessing Tennessee’s most desirable properties.
By working with knowledgeable lenders who understand the unique aspects of Tennessee’s luxury market, you can secure optimal financing terms that align with your financial goals and help you acquire the exceptional property you desire.
FAQs: Tennessee Jumbo Loan Guide
What is the difference between a jumbo loan and a conventional loan?
A conventional loan adheres to the conforming loan limits set by Fannie Mae and Freddie Mac ($726,200 in most counties for 2025), while a jumbo loan exceeds these limits. Jumbo loans typically have stricter qualification requirements including higher credit scores, larger down payments, and more extensive documentation.
Do jumbo loans have higher interest rates than conventional loans?
Not necessarily. While jumbo loans historically had higher interest rates, today’s market often sees competitive rates for well-qualified jumbo borrowers. In some cases, jumbo loan rates may be comparable to or even lower than conventional loan rates, depending on the borrower’s financial profile.
What credit score do I need for a jumbo loan in Tennessee?
Most lenders require a minimum credit score of 700 for jumbo loans, though some premium products may require 720 or higher. The higher your credit score, the better rates and terms you’ll be offered.
Are there alternatives to jumbo loans for high-value properties?
Yes. If you don’t qualify for a jumbo loan or prefer other options, you might consider:
- Non-QM loans – Alternative qualification methods that look beyond traditional criteria
- Portfolio loans – Loans kept on a lender’s books rather than sold to government agencies
- Combination loans – Using a first mortgage up to the conforming limit and a second mortgage for the remainder
- Foreign national loans – For borrowers without U.S. credit scores
Can I get a jumbo loan for an investment property in Tennessee?
Yes, jumbo loans are available for investment properties, though requirements are typically more stringent than for primary residences. You’ll generally need a larger down payment (often 25-30%) and demonstrate stronger financial qualifications. For investment properties, you might also want to explore specialized loan products designed specifically for investors.
How long does it take to close on a jumbo loan in Tennessee?
The closing process for jumbo loans typically takes 30-45 days, slightly longer than conventional loans due to the more extensive underwriting process and specialized appraisal requirements for luxury properties.
Do jumbo loans require mortgage insurance?
Unlike conventional loans with less than 20% down payment, jumbo loans typically don’t require mortgage insurance. However, this is offset by the larger down payment requirement, usually 20% or more of the purchase price.
Can I refinance my current jumbo loan to a better rate?
Yes, jumbo loan refinancing is available and can be beneficial if interest rates have decreased or if your financial situation has improved. Refinancing can potentially lower your monthly payments, reduce your loan term, or allow you to cash out equity for other purposes.
What happens if home values decrease after getting a jumbo loan?
Like any mortgage, a decline in property values can result in owing more than your home is worth (negative equity). This is one reason why jumbo loans typically require larger down payments – to create an equity cushion against market fluctuations.
Are jumbo loan interest payments tax-deductible?
Mortgage interest may be tax-deductible, including on jumbo loans, subject to IRS rules and limits. The Tax Cuts and Jobs Act of 2017 limited the mortgage interest deduction to the first $750,000 of mortgage debt. Consult with a tax professional regarding your specific situation.
