Tennessee is one of the most veteran-friendly states in the country — and not just because of its outstanding military installations. Tennessee has no state income tax at all, including no tax on military retirement income, wages, or any other form of earned or retirement income. Combined with the state’s relatively affordable housing markets (outside the Nashville MSA), VA financing in Tennessee stretches further here than in almost any comparable state.
If you’ve served our country, you’ve earned one of the most powerful home loan benefits available: the VA Loan. The Bookspan Baker Team at Guild Mortgage is proud to help Arizona veterans, active-duty service members, and surviving spouses use this benefit to achieve homeownership with unmatched financial advantages.
No down payment required in most cases
No monthly PMI even with zero down
VA-guaranteed loans typically carry rates at or below conventional market rates
No VA-set minimum credit score; most lenders look for 580–620+
The VA restricts certain fees lenders can charge veterans
VA Loans can be assumed by a qualified buyer
Tennessee Tax Advantage for Veterans: Tennessee is one of a small number of states with no state income tax whatsoever — no tax on wages, salaries, military pay, military retirement income, or Social Security. The Hall Income Tax on investment income was fully repealed effective January 1, 2021. For military retirees relocating from states like California, Virginia, or the Northeast, the Tennessee tax environment represents a dramatic ongoing financial benefit.
Active-duty service members who have served at least 90 continuous days
Veterans discharged under other than dishonorable conditions
Surviving spouses of service members who died in the line of duty or from a service-connected disability
National Guard and Reserve members with qualifying service
(typically 6 years, or 90 days active duty under Title 10 federal orders)
Fort Campbell (Montgomery and Stewart Counties, TN / Clarksville, TN): Fort Campbell straddles the Kentucky-Tennessee state line, with Clarksville, Tennessee serving as the primary civilian community. Home of the 101st Airborne Division (Air Assault) — the Army’s only air assault division, the “Screaming Eagles” — and the 160th Special Operations Aviation Regiment (SOAR), the “Night Stalkers.” Blanchfield Army Community Hospital is the on-post medical facility.
Fort Campbell and the Clarksville area have one of the fastest-growing veteran populations in the country — more than 21,000 veterans currently enrolled in VA health care, with an additional 29,100 eligible. The Clarksville housing market is large, affordable, and actively growing, with significant new construction. VA financing is deeply embedded in this market.
Naval Support Activity Mid-South (NSA Mid-South) — Millington, Tennessee: The Navy’s Human Resources Center of Excellence — home to Navy Personnel Command, Navy Recruiting Command, and the 4th Marine Logistics Group. Over 7,500 military, civilian, and contract
personnel; one of the largest employers in the state. Personnel typically purchase homes throughout northern Memphis metro —
Millington, Atoka, Munford, and parts of Shelby County.
Arnold Air Force Base — Tullahoma, Tennessee (Coffee/Franklin Counties): Home of the Arnold Engineering Development Complex (AEDC) — the world’s most advanced and largest complex of flight simulation and aerospace testing facilities. AEDC tests virtually every major US aerospace system. Personnel typically purchase homes in Tullahoma, Manchester, Winchester, and the Coffee County area.
McGhee Tyson Air National Guard Base — Knoxville area (near Alcoa, TN): Home of the 134th Air Refueling Wing of the Tennessee Air National Guard — 68+ years of air refueling excellence, 16 Air Force Outstanding Unit Awards. Being considered for KC-46 Pegasus main operating base designation. Guard members typically live throughout the Knoxville-Maryville-Alcoa corridor.
Berry Field / 118th Wing — Nashville International Airport: The 118th Wing of the Tennessee Air National Guard. Guard members live
throughout the Nashville metro.
Memphis Air National Guard Base: Home of the 164th Airlift Wing (C-5 Galaxies). Guard members throughout Shelby and surrounding counties.
THDA’s Homeownership for Heroes program provides Great Choice Loan benefits with a 0.5% interest rate reduction for active-duty military, National Guard and Reserve members, and veterans. Critically, it waives the first-time homebuyer requirement for military and veterans statewide — allowing repeat buyers in the military community to access THDA’s favorable rates and DPA.
For a Fort Campbell or NSA Mid-South veteran using a VA loan through THDA’s Heroes program, the combination of zero down payment, no PMI, no Tennessee state income tax, and a reduced interest rate represents an exceptional financial position.
For veterans with full entitlement, there is no VA loan limit. In affordable Tennessee markets like Clarksville, Millington, Tullahoma, and even Knoxville and Chattanooga, VA buyers can purchase well within conventional limits with zero down. Even in the Nashville MSA’s $1,029,250 high-cost zone, VA’s no-limit benefit gives full access.
No. Tennessee has no state income tax of any kind — military
retirement income, active-duty pay, Social Security, and all other income are completely exempt from Tennessee state income tax. One of the most significant financial benefits for veterans choosing Tennessee.
Yes. THDA’s Homeownership for Heroes provides a 0.5% interest rate reduction and waives the first-time buyer requirement for veterans and military. VA Loans don’t require down payment, so the Heroes program primarily benefits veterans on the rate side, with DPA available for closing costs.
Absolutely. Clarksville is one of the most active VA loan markets in the state. Home prices are affordable, new construction is abundant, and the Fort Campbell military community has a deep familiarity with VA financing.
Guard members who have completed qualifying federal service — typically 6 years of service, or 90 days active duty under Title 10 federal orders — may be eligible. The Bookspan Baker Team can help you confirm your Certificate of Eligibility.
