**Exhibit 35.1**

**SERVICER      COMPLIANCE STATEMENT (ITEM 1123)**

**First      Horizon Mortgage Pass-Through Trust 2006-AR3**

|   | First                Horizon Home Loan Corporation                                                                                                                                                                                                                                         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                       |
|   | By:                /s/ Kim                Yowell                                        |
|   | Date:                03/01/07                                                                                                                                                                                                                                                              |
|   | Name:                Kim Yowell                                                                                                                                                                                                                                                            |
|   | Title:                SVP, Servicing Manager                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                       |
|   | First                Tennessee Mortgage Services, Inc.                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                       |
|   | By:                /s/ Terry                L.                McCoy                                                        |
|   | Date:                03/01/07                                                                                                                                                                                                                                                              |
|   | Name:                Terry L. McCoy                                                                                                                                                                                                                                                        |
|   | Title:                Vice President                                                                                                                                                                                                                                                       |

----