VA Loans and Luxury Homes in Tennessee: What Military Buyers Should Know

Morrell Property Collective November 11, 2026

Tennessee

On Veterans Day, we're grateful for everyone who has served. One of the most valuable benefits veterans and service members earn is the VA home loan. Many people assume it's only for starter homes, but that's not the case.

If you have full VA entitlement, there is no VA loan limit. That means a VA loan can be a powerful tool for buying a luxury home in Nashville, Franklin, Knoxville, or anywhere in Tennessee, as long as you qualify with your lender. Here's how it works.

Key takeaways

With full entitlement, the VA does not set a maximum loan amount, so no down payment is required by the VA on higher-priced homes.
If you have partial entitlement, 2026 county loan limits apply: $1,029,250 in the Nashville metro and $832,750 in Knox County.
Most first-time VA borrowers with less than 5% down pay a 2.15% funding fee; veterans who receive VA disability compensation are generally exempt.
Tennessee offers property tax relief for qualifying disabled veteran homeowners.

Is There a VA Loan Limit in 2026?

If you have full VA entitlement, there is no VA loan limit. The VA guarantees part of the loan to your lender, and since 2020 that guarantee isn't capped by county limits for borrowers with full entitlement, according to VA.gov. Your lender will still set a maximum based on your income, credit, debts, and assets.

If you have partial entitlement, for example because you still have an active VA loan on another home, county limits help determine how much you can borrow without a down payment. For 2026, that limit is $1,029,250 in the Nashville metro, including Davidson and Williamson counties, and $832,750 in Knox County.

Can I Use a VA Loan for a $1 Million Home?

Yes, if you qualify. With full entitlement, the VA doesn't require a down payment no matter the price. The real limits come from your lender's guidelines. Some lenders have their own maximums or require stronger credit and reserves for larger loans, sometimes called VA jumbo loans. Compare a few lenders who regularly close higher-balance VA loans.

How the VA Funding Fee Works

Most VA borrowers pay a one-time funding fee, which can be paid at closing or added to the loan. According to the VA, the fee depends on your down payment and whether you've used the benefit before:

Down payment	First use	After first use
Less than 5%	2.15%	3.3%
5% to less than 10%	1.5%	1.5%
10% or more	1.25%	1.25%

On a $1,000,000 loan with no down payment, a 2.15% fee is $21,500. Putting 10% down lowers the fee to 1.25% of the smaller loan amount.

Important: Veterans who receive VA compensation for a service-connected disability are generally exempt from the funding fee. Check your eligibility on VA.gov.

Do Disabled Veterans Pay Property Tax in Tennessee?

Tennessee doesn't fully exempt disabled veterans from property tax, but the state offers a Property Tax Relief program for qualifying disabled veteran homeowners and their surviving spouses. Through the program, the state reimburses part of the tax on a portion of the home's value. For 2026, sources report that limit as $175,000 of market value. Apply through your county trustee and confirm details with the Tennessee Comptroller's office.

Tips for Military Buyers Shopping in the Luxury Market

Get your Certificate of Eligibility (COE) early. It confirms your entitlement and speeds up approval.
Choose an experienced VA lender. Not every lender closes many higher-balance VA loans.
Write a strong offer. VA loans are competitive with conventional loans when your agent explains them clearly to the listing agent.
Plan for the appraisal. VA appraisals include minimum property requirements, so build time into your contract.
Consider the funding fee. Decide whether to pay it at closing or finance it.

Frequently Asked Questions

Can I have two VA loans at the same time?
In some cases, yes, if you have enough remaining entitlement. Your lender can review your Certificate of Eligibility and explain your options.

Are VA loan rates higher for larger loans?
Rates vary by lender and loan size. Some lenders price higher-balance VA loans differently, so compare several quotes.

Can I use a VA loan on new construction?
Yes, VA loans can be used on new construction, but the builder and home must meet VA requirements. Ask your lender early in the process.

Do VA loans require mortgage insurance?
No. VA loans don't require monthly private mortgage insurance, which can save buyers a significant amount on larger loans.

Next Steps for Military Buyers

Request your Certificate of Eligibility through VA.gov or your lender.
Talk with two or three lenders experienced with higher-balance VA loans.
Check whether you're exempt from the funding fee.
Ask your county trustee about property tax relief if you're a disabled veteran.
Work with an agent who can present your VA offer with confidence.

Conclusion

The VA home loan is one of the most valuable benefits you've earned, and it isn't limited to modest homes. With full entitlement, the right lender, and a clear plan, a VA loan can help you buy a luxury home in Tennessee with little or no money down.

Let's Talk About Your Move

Morrell Property Collective works with lender partners who regularly close VA loans in Nashville and Knoxville. We'd be glad to introduce you and help you plan your search. Call (615) 593-3103 to start the conversation. Thank you for your service.