Documented-income financing on Tennessee investment property.
The conventional route for a non-owner-occupied purchase or refinance: up to 80% LTV, credit from 580, qualified on documented income. Slower and cheaper than hard money, and it still runs into Tennessee's two closing taxes and the county assessment calendar. Business-purpose only, and every structure is set in underwriting.
Typical figures, subject to underwriting and market conditions. Not a commitment to lend.
How it works
For investors who qualify conventionally, this is usually the lowest-cost long-term money on a buy-and-hold. We help you weigh it against our DSCR and bank-statement programs so the loan matches your file and your goals.
What are the Tennessee-specific costs on a conventional investment closing?
The transfer tax and the indebtedness tax, both on you. Tennessee taxes the conveyance at $0.37 per $100 of the greater of consideration or value, payable by the grantee, meaning the buyer, by statute rather than by custom. It taxes the debt separately at $0.115 per $100, first $2,000 exempt, paid by the mortgagor and remitted by the note holder, with a legend on the recorded instrument stating the maximum principal indebtedness for Tennessee recording tax purposes. On a $325,000 purchase with a $260,000 loan that is $1,202.50 on the deed (325,000 / 100 x 0.37 = 1,202.50) plus $296.70 on the note (258,000 / 100 x 0.115 = 296.70). Recording fees are separate and county-set. There is no local-option transfer tax we could find layered on top.
Will my Tennessee property tax bill jump after I buy?
Not at closing. Tennessee has no acquisition-value reset. Assessed values are frozen between countywide reappraisals, and counties run a six-year cycle, a four-year cycle with State Board of Equalization approval, or a five-year cycle where the assessor agrees and the county legislative body votes it. So you inherit the last reappraisal's value rather than being reassessed to your purchase price the way a California buyer is. Residential is assessed at 25 percent of value and commercial and industrial at 40 percent. There is no homestead cap for an investor to lose, because the relief programs, the elderly and disabled freeze and tax relief, never applied to you. When a reappraisal does land, the county must compute a revenue-neutral certified tax rate and hold a public hearing to exceed it.
Does Tennessee's lack of an income tax improve a documented-income file?
It helps the return and complicates the paperwork. The Hall income tax was repealed for tax years beginning on or after January 1, 2021, so there is no Tennessee wage tax and no state capital-gains tax, and rental income is not reduced by a state income tax. Because a conventional file qualifies on documented income, expect the documentation to come from federal returns and entity filings rather than a state return. Your entity may still owe franchise and excise tax, at excise 6.5 percent of Tennessee net earnings and franchise 0.25 percent of net worth with a $100 minimum payable even when inactive. Sole proprietors and general partnerships are outside it. Ask your Tennessee CPA which filings we should expect to see.
How should I budget insurance on a Tennessee investment property?
From a real quote, and with the deductible structure in view. Tennessee's dominant perils are tornado, straight-line wind and hail. Wind and hail sit inside the standard homeowners form here rather than being carved out to a separate windstorm policy, but percentage wind and hail deductibles of roughly 1 to 5 percent of dwelling coverage are common, so a hail claim can cost far more out of pocket than a flat deductible would suggest. Tennessee also has no state FAIR plan and no insurer of last resort, so any vacancy period is a surplus-lines conversation. We do not publish a Tennessee average premium; the available secondary figures conflict badly and none is worth underwriting to. For market-level context on a specific area, start with Nashville conventional investment loans.
What credit score do I need for a Tennessee conventional investment loan?
580 is the floor, and it is the lowest score threshold we publish. Because this program qualifies on documented income rather than on the asset alone, the underwriting is more conventional in every sense: income, reserves and the credit file all get read. There is no hard credit pull to start. Above the floor, a stronger score generally shows up in leverage and pricing rather than as a pass-fail gate. Non-owner-occupied only. Subject to underwriting.
How much do I put down on a Tennessee conventional investment purchase?
At least 20 percent, because we lend up to 80% LTV. On a $400,000 Tennessee purchase that is $320,000 from us and $80,000 from you (400,000 x 80% = 320,000), before closing costs. Then add the state's own lines: $0.37 per $100 of transfer tax paid by you as grantee, plus $0.115 per $100 of debt after the first $2,000. The program is non-owner-occupied and qualified on documented income. Subject to underwriting.
Can a first-time investor use this program in Tennessee?
Yes, and it is often the cheapest way in. There is no prior-property requirement. What the file needs is documented income, a credit score from 580, and at least 20% down on a non-owner-occupied property. If your income documentation is the problem rather than your credit, look at a Tennessee bank statement loan instead. If speed is the problem, the asset-based programs close faster. Subject to underwriting.
More Conventional Investment questions, answered on the program page
Local rules move. Every tax rate, fee, ordinance and market figure here comes from a primary source and carries the date we read it, and we correct them as the rules change. Where a number is mid-change or we could not verify it, we say so rather than guess. Before you commit a budget, confirm anything that drives it with the city or county, and talk to your attorney or CPA on questions of law or tax.
Published by USA Mortgage Funding, LLC, NMLS #152588. Researched from primary sources by our team, drafted with AI assistance, and every figure checked against its source before publishing. Where an answer rests on a public record, that record is linked under it. Figures read on 2026-08-23.
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