DSCR Loans in Tennessee
3 lenders, 0.71% property tax, $1,500/mo median rent. Landlord-friendly state.
Market Snapshot
Estimated DSCR assumes median price, median rent, 75% LTV, 30-year fixed at 7.45%, property tax and insurance only. Your deal will differ.
The Tennessee Rental Market
Memphis is one of the top DSCR markets nationally for cash flow. Nashville has appreciated past cash flow territory for many investors. Knoxville and Chattanooga are emerging alternatives.
Top markets in Tennessee
- Memphis
- Nashville
- Knoxville
- Chattanooga
How Tennessee Costs Affect Your DSCR
Two line items determine whether a Tennessee rental hits DSCR thresholds: property tax and insurance. Together they represent the bulk of operating expenses in a DSCR calculation (which excludes management fees and capital expenditures).
Property tax: 0.71%
Tennessee's property tax rate is near the national average. On a $290,000 property, expect about $172/month in property taxes.
Insurance: $1,400/year
Insurance in Tennessee runs about $1,400/year ($117/month), which is manageable. Rates can vary by city, property age, and condition. Get a real quote for your specific property.
Combined impact
On a median-priced Tennessee property, property tax plus insurance runs approximately $288/month. Subtract that from the $1,500 median rent, and your NOI is roughly $1,212/month before the mortgage payment. Run your own numbers in the DSCR calculator to see exactly where your deal lands.
DSCR Lenders in Tennessee
3 lenders in our database cover Tennessee. Low taxes and insurance make Tennessee deals easier to underwrite. Memphis properties regularly hit 1.5+ DSCR. No state income tax is a bonus for out-of-state investors.
| Lender | Min DSCR | Min FICO | Max LTV | STR |
|---|---|---|---|---|
| Visio Lending | 1.00 | 680 | 80% | Yes |
| Griffin Funding | 0.75 | 660 | 80% | Yes |
| Truss Financial Group | N/A | N/A | 75% | N/A |
See the full lender comparison matrix for all columns, or use the DSCR qualifier to find which lenders match your specific deal.
Landlord-Tenant Climate
Tennessee is generally considered a landlord-friendly state. Very landlord-friendly. Fast eviction through detainer warrant (14-day notice). No rent control. No mandatory security deposit limits.
Landlord-friendliness matters for DSCR investors because extended vacancies and eviction costs eat into the rental income that your DSCR depends on. A state where evictions take 3 months versus 3 weeks changes the effective vacancy factor in your underwriting.
Example Deal: Median Tennessee Property
To show how these numbers interact, here is a simplified underwrite of a median-priced Tennessee rental at current rates:
| Purchase price | $290,000 |
| Loan amount (75% LTV) | $217,500 |
| Rate (30yr fixed) | 7.45% |
| Monthly payment (P&I) | $1,513 |
| Monthly rent | $1,500 |
| Property tax | $172/mo |
| Insurance | $117/mo |
| NOI (rent minus tax and insurance) | $1,212/mo |
| DSCR | 0.80 |
The median deal falls short of the 1.0 DSCR minimum. You need to find properties with significantly above-median rents or below-median prices to make DSCR financing work in this market. Plug your actual numbers into the DSCR calculator.
Tools for Tennessee Investors
- DSCR Calculator - Check if your Tennessee rental qualifies
- Cash-Out Refi Calculator - Model a refinance on an existing Tennessee property
- DSCR Qualifier - Match your deal against lenders in Tennessee
- Lender Matrix - Compare all lenders side by side
- Rate Monitor - Track current DSCR rates weekly
- Rental Property Analyzer - Full deal analysis with NOI, cash flow, and ROI
FAQ
Can I get a DSCR loan in Tennessee?
Yes. 3 of the major DSCR lenders in our database operate in Tennessee. DSCR loans are available in all 50 states, though some lenders exclude specific states. Tennessee is one of the more active DSCR markets.
What DSCR do I need for a rental property in Tennessee?
Most lenders require a minimum DSCR of 1.0 to 1.25. Tennessee's low property tax rate (0.71%) helps your DSCR compared to the national average. On a median-priced Tennessee property, the estimated DSCR is around 0.80 at current rates.
What are property taxes in Tennessee?
The average effective property tax rate in Tennessee is 0.71%. On a $290,000 property, that is roughly $2,059/year or $172/month. This directly reduces your NOI and DSCR.
How much is rental property insurance in Tennessee?
The average annual insurance premium for a rental property in Tennessee is approximately $1,400. This is near or below the national average, which helps your DSCR.
Is Tennessee a good state for rental property investing?
Tennessee is generally considered landlord-friendly. Very landlord-friendly. Fast eviction through detainer warrant (14-day notice). No rent control. No mandatory security deposit limits. The best markets in Tennessee for DSCR investors are Memphis, Nashville, Knoxville.
Which DSCR lenders work in Tennessee?
Our database shows 3 DSCR lenders operating in Tennessee. Most national lenders cover Tennessee. Check our lender comparison matrix for specific lender requirements and filter by state.
What is the median rent in Tennessee?
The median rent for a single-family rental in Tennessee is approximately $1,500/month. Actual rents vary widely by market: Memphis may be higher or lower than Chattanooga. Always use actual rental comps for your specific property and neighborhood.