Tennessee Investment Property Loans

Tennessee is a business-purpose lending state for us. We finance non-owner-occupied investment property here through DSCR, non-owner bank statement, NONI, bridge, and commercial programs.

Owner-occupied and consumer mortgage products (FHA, VA, USDA, conventional, jumbo, reverse) are not offered in Tennessee.

Memphis and Nashville are opposite trades

Tennessee gives investors two well-known markets that behave nothing alike, and the financing conversation is different for each.

Memphis is the cash-flow market. Illustrative 2026 figures: roughly $155,000 median price against $1,100 median rent, working out to about a 9% cap rate with vacancy near 7.5% and property tax around 1.7%. That price-to-rent relationship is one of the healthier ones in the country for DSCR purposes — files that clear 1.25 are routine rather than exceptional.

Memphis corridors behave differently from one another:

The standard local caution applies and is worth repeating: Memphis changes block by block. An appraisal supports a value; it does not tell you whether the street rents. Drive it, or have someone you trust drive it.

Nashville is a permit market, which is a different risk entirely. See below.

Statewide, Tennessee has no state income tax at all — not on wages, not on rental income, not on capital gains. For out-of-state investors that is a real after-tax difference against comparable yields elsewhere.

For current observed pricing across credit tiers, see the non-QM rate index , updated weekly.

Nashville short-term rentals: the permit is the asset

If your Nashville thesis is short-term rental income, the permit matters more than the property, and this is where out-of-state buyers get hurt.

Nashville distinguishes owner-occupied from non-owner-occupied short-term rentals (NOOSTR), and NOOSTR is the category most investors need. It is:

• Restricted by zoning. Permitted in commercial zones, mixed-use zones, Downtown Code (DTC) districts, select mixed-use corridors, and condominium buildings approved for short-term rental use. Prohibited or restricted in single-family residential zones — and many residential neighborhoods bar it outright.
• Capped by density in some zones. Permits issue first-come until the zone cap is reached. Once a zone is full, no new NOOSTR permits issue there until an existing permit expires.
• Annually renewable, with documentation comparable to the original application. That is a recurring administrative obligation and a recurring renewal risk.

Two questions to answer in writing before you write an offer, because the answers change the value of the asset:

1. Does a NOOSTR permit currently attach to this specific property, and does it survive the sale?
2. Is the zone at its density cap?

Underwriting a Nashville file on short-term rental income without a confirmed, current permit is underwriting income that may not be legal to earn. Long-term rental strategies sidestep the issue entirely, which is why a lot of Nashville DSCR files pencil better as LTR than the listing photos suggest.

Tennessee lending mechanics that actually change deals

Two Tennessee rules affect structure more than most investors expect.

Second-lien financing is not available on Tennessee files. This is the one that surprises people. In Arizona or Georgia, a CLTV structure can rescue a tight down payment — a second behind the first gets the deal done. That option is off the table here. Tennessee files have to work on the first lien alone, which means the down payment conversation happens earlier and has to be real.

Tennessee is an attorney closing state. Document preparation typically requires a 24-hour approval window. It rarely moves a closing date materially, but it needs to be in the timeline rather than discovered in the final week. Build the extra day in.

Prepayment structures are not available everywhere. Availability and terms vary by state, by loan amount, and by whether the borrower takes title personally or through an entity. We confirm the structure for your state and vesting before quoting.

LLC vesting is standard on DSCR files and worth doing across a multi-property portfolio. Bring the operating agreement, EIN and formation documents to closing.

Programs available in Tennessee

• DSCR Loans — qualified on the property’s rental income, not your personal income. No limit on financed properties.
• Bank Statement Loans — non-owner occupied, 12 or 24 months of deposits for self-employed investors.
• NONI / Foreign National Loans — for borrowers with no documentable U.S. income.
• Hard Money Loans — Short-term, asset-based financing for fix-and-flip, lot acquisition, and value-add deals. Available in all 50 states.
• Rehab Loans — Purchase and renovation financing in one loan. Fix-and-flip, BRRRR, and value-add projects.
• Bridge Loans — Short-term financing between an acquisition and permanent loan, or while a property is stabilizing.
• Commercial Real Estate Loans

Tennessee city programs

• Memphis DSCR Loans
• Nashville DSCR Loans
• Nashville Bank Statement Loans

Tennessee investor FAQ

Why does Memphis pencil so much better than Nashville? Price-to-rent. Memphis runs roughly $155,000 against $1,100 monthly rent — near a 9% cap rate. Nashville’s entry pricing is far higher against rents that haven’t kept pace, so the same borrower clears DSCR more easily in Memphis. Nashville is usually an appreciation or STR thesis rather than a day-one cash-flow thesis.

Can I use a second mortgage to reduce my down payment on a Tennessee property? No. Second-lien structures aren’t available on Tennessee files, so CLTV approaches used in other states are off the table. Plan the down payment on the first lien alone.

Can I finance a Nashville Airbnb with a DSCR loan? Only with a confirmed non-owner-occupied short-term rental permit that attaches to the property, and only where zoning allows it. Many single-family residential zones prohibit NOOSTR entirely, and some zones are at their density cap. Confirm the permit status in writing before you write the offer.

Does the attorney closing requirement slow things down? Marginally. Budget a 24-hour document approval window. It is a scheduling item, not an obstacle.

Do you lend on Tennessee owner-occupied purchases? No. Tennessee is business-purpose only for us — investment and non-owner-occupied property financing. We do not offer FHA, VA, USDA, conventional, jumbo, or reverse mortgages in Tennessee.

Ready to run a specific Tennessee property? Check DSCR eligibility or call (833) 350-9185 .

For illustration only. Not a commitment to lend. Rates and terms subject to change and qualification. Market figures are illustrative observations and not guarantees of performance. Zoning and permit summaries are general information, not legal advice — confirm current Metro Nashville requirements directly. 1st Nationwide Mortgage Corporation, NMLS #1281. Equal Housing Lender.