Question 1

Tennessee has no income tax, so what documents do I even have?

Accepted Answer

No state return, which is exactly the gap this program fills. The Hall income tax was repealed for tax years beginning on or after January 1, 2021, so Tennessee has no individual income tax and no state capital-gains tax, and a Tennessee borrower has no state return to hand a lender. Your entity is a different story: franchise and excise tax reaches corporations, LLCs, LPs and business trusts registered or doing business here, at excise 6.5 percent of Tennessee net earnings and franchise 0.25 percent of net worth, $100 minimum, so there is an entity filing even in a year the business barely traded. We qualify on bank statements or on no income documents at all rather than reconciling any of it. Bring the deposits. Subject to underwriting.

Question 2

Does a Tennessee FONCE election change how you read my file?

Accepted Answer

It changes what your returns look like, not what we lend against. Tennessee's family-owned non-corporate entity exemption relieves an LLC or LP from franchise and excise tax when at least 95 percent is family-owned and at least 66.67 percent of receipts are passive investment income, with residential rents qualifying only from properties of four units or fewer and commercial rents not qualifying. Investors structured that way often have entity paperwork that looks thin next to what the properties actually produce, and management fees generally disqualify the election anyway, so operators are frequently split across entities. A bank statement or no-document program sidesteps that reconciliation entirely. Keep the tax planning with your Tennessee CPA and let the deposits speak to us.

Question 3

What will Tennessee charge me at the closing table?

Accepted Answer

Two state taxes on top of the usual fees. The realty transfer tax is $0.37 per $100 of the greater of consideration or value, and in Tennessee the grantee, meaning you as buyer, pays it by statute. The indebtedness tax is $0.115 per $100 of debt with the first $2,000 exempt, paid by the mortgagor. On a $350,000 purchase with a $280,000 loan that is $1,295 on the deed (350,000 / 100 x 0.37 = 1,295) plus $319.70 on the note (278,000 / 100 x 0.115 = 319.70). Recording fees run separately, on a county schedule you should confirm locally. Put both taxes into your cash to close rather than discovering them on the settlement statement.

Question 4

Who closes the loan in Tennessee, and do I need a lawyer?

Accepted Answer

A title or escrow company, and no attorney is required. Tennessee is a title and escrow state, so closings are customarily handled by title companies and escrow agents routinely staffed by non-attorneys. The exception worth knowing: drafting a deed for another person is the practice of law in Tennessee under TCA 23-3-103, so that piece stays with a licensed attorney even when everything else does not. Since July 1, 2025 the buyer or borrower chooses the settlement agent, subject only to lender approval, and a seller may not require a particular one. We will not tell you who customarily pays for the owner's title policy in Tennessee, because we have no reliable source for that custom. Ask your closer for a written fee estimate early.

Question 5

What credit score do I need for a Tennessee bank statement loan?

Accepted Answer

640 is the floor on this program. Bank statement lending replaces the income documentation, not the credit file, so the score does real work here in a way it does not on our asset-based loans. There is no hard credit pull to start, and above the floor a stronger score generally buys better leverage rather than being a pass-fail gate. If you are below 640, the asset-based programs, meaning fix and flip, bridge and construction, carry no minimum score at all. Subject to underwriting.

Question 6

How much do I need to put down, and what is the minimum loan?

Accepted Answer

From 20 percent down, on loans from $100,000 to $3,000,000. At 20% down a $500,000 Tennessee purchase means $400,000 from us and $100,000 from you (500,000 x 80% = 400,000), before closing costs. Add Tennessee's transfer tax at $0.37 per $100 and the indebtedness tax at $0.115 per $100 of debt after the first $2,000. Qualification runs on bank statements or no income documents, with credit from 640. Subject to underwriting.

Question 7

Can I use a Tennessee bank statement loan on my first investment property?

Accepted Answer

Yes, if the deposits and the credit support it. There is no prior-property requirement on this program. What we need is a credit score from 640, at least 20% down, and either a clean set of bank statements or a file structured with no income documents. Self-employment history and how consistent the deposits look matter more than how many doors you already own. Business-purpose only, on investment property. Subject to underwriting.

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