Tennessee Rental Property Loans

Investment Property Loans in Tennessee Based on Rental Income.

30 Year Fixed Rate

Interest only or fixed rate rental property loans designed exclusively for real estate investors.

  • Up to 80% LTV
  • Based on potential rental income
  • Short-term rentals allowed
  • Min loan amount: $75,000
  • Max loan amount: $3M


Refinance to increase cash flow, lower mortgage payments or cash out refinance to buy another property.

  • Up to 80% LTV (Refinance)
  • Up to 75% LTV (Cash out refinance)
  • Roll closing costs in loan proceeds
  • Min loan amount: $75,000
  • Max loan amount: $3M

Rental Portfolio Loans

Consolidate 5 or more rental properties into a single loan and one monthly payment.

  • Up to 80% LTV
  • Minimum 5 or more properties
  • Consolidated into 1 payment
  • Min loan amount: $500k
  • Max loan amount: $50M

Rental Loan Terms

Here are rental property loan terms for Tennessee. Qualify based on the future rental income, not personal income.

Credit score Minimum 680
LTV Up to 80% LTV
Interest rate As low as 7%
Property types Single family home, condo, townhouse or 1-4 unit properties
Prepayment No prepayment penalty after 3 years
Loan types Amortized or interest only
Loan terms 30 year, 15 year, 5/1 and 7/1 ARMs

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Minimum Loan Requirements

Here are the minimum rental property loan requirements in the Volunteer State.

Minimum Credit Score

The minimum credit score to get approved for a Tennessee rental property loan is 680.

Minimum Loan Amount

The minimum loan amount is $75,000.

Minimum DSCR Ratio

A minimum DSCR ratio of 1.2 is required. Use our DSCR loan calculator to determine your investment property’s DSCR.

Business Entity Required

Since these are business purpose loans, a legally registered business is required to get approved for a private money loan. Most lenders in Tennessee will require this, so it’s a good idea to apply for a new LLC in the state of Tennessee if you don’t already have one.

Minimum Documentation

The following documents will be required to get approved for any Tennessee rental loans.

Best cities to buy a rental property in Tennessee

These are the best cities to buy a rental property in TN, based on the rental property market, local demand and growth potential.

  • Memphis
  • Nashville
  • Knoxville
  • Chattanooga
  • Clarksville
  • Johnson City

Is it hard to get a loan for a rental property in Tennessee?

Tennessee investment property loans are not based on personal income. Therefore, real estate investors can get ultra-competitive terms as long as they can come up with the minimum down payment, closing costs and find a good deal.

How do I qualify for a DSCR loan in Tennessee?

You can qualify for Tennessee DSCR loans if you meet the minimum credit score requirement, minimum DSCR requirement, have access to the down payment and meet any other lender loan criteria.

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Rental Loan FAQ’s

There are many types of rental property loans that are available to investors. Here are some common questions you may have.

What is the down payment for a rental property in Tennessee?

The minimum down payment to purchase or refinance a rental property in Tennessee is 20%. However, it can vary based on your credit score, LTV and and DSCR.

What are the current rental loan interest rates?

The current interest rates for rental loans as of March 2024 range from 7% to 11%. Rates are subject to change and fluctuate daily.

What determines my interest rate on a rental loan in Tennessee?

Your interest rate will vary depending on your credit score, loan to value, real estate market risk and investment property risk.

Does Capital Ton LLC work with new investors?

Yes, we have various options for securing Tennessee DSCR loans for new investors. Those typically come with slightly higher origination fees. Repeat or seasoned investors, can expect lower closing costs.

Does Capital Ton LLC offer loans for short term rentals?

Yes, Capital Ton LLC has flexible loan options such as DSCR and AirDNA for short term rentals. Seasoned and first-time investors are eligible for ultra-competitive terms.

Does Capital Ton LLC offer interest-only rental loans?

Yes, investors can secure “partial” interest-only rental loans which typically come with lower interest rates. These type of loans are interest-only for the first 10 years and then amortize for the following 20 years.

Is Tennessee a landlord friendly state?

Tennessee stands out as a landlord-friendly state for several reasons. First, there’s no state-imposed limit on security deposits, giving landlords flexibility in setting these charges. Landlords can increase rent with a 30-day notice for month-to-month leases.

For evictions, especially regarding unpaid rent, Tennessee law allows landlords to give a brief notice of just 14 days before proceeding with eviction actions. Landlords have the right to enter rental units for inspections, repairs, or emergencies as long as they provide a reasonable notice (typically 24 hours).