Does Grafton Funding offer DSCR loans for rental properties?

Yes — DSCR (Debt Service Coverage Ratio) loans are our most popular product. We lend on single-family rentals, 2–4 unit properties, short-term rentals (like Airbnb and VRBO), and small multifamily up to 10 units. We qualify the property on its rental income rather than your personal income or tax returns. Minimum DSCR is typically 1.0x, and we lend in TX, FL, GA, NC, SC, and other states.

Does Grafton Funding do fix and flip loans or bridge loans?

Yes. We provide fix and flip loans and bridge loans for non-owner occupied investment properties. Our programs cover the purchase price plus rehab costs, with fast closings. Loan terms are short-term (typically 12–18 months) and are designed around the investor's exit strategy — either sale or refinance.

Can I get a DSCR loan for an Airbnb or short-term rental property?

Yes — we specialize in short-term rental (STR) financing. We use either the property's actual Airbnb or VRBO income history or a market-rate STR income estimate to qualify the loan. You don't need W-2s or tax returns.

Does Grafton Funding offer new construction loans for investment properties?

Yes. We offer new construction loans for non-owner occupied residential investment properties, including spec builds, ground-up construction, and lot + build projects. These are short-term loans that fund in draws as construction progresses.

Does Grafton Funding lend in North Carolina?

Yes — we actively lend in North Carolina, including the Charlotte metro, the Triangle (Raleigh/Durham/Chapel Hill), Wilmington, and Asheville. We offer DSCR rental loans, fix and flip loans, and new construction financing for NC investment properties. Local NC line: (910) 218-1286.

Can I qualify for a loan without showing tax returns or personal income?

Yes — our DSCR loans are underwritten based on the property's rental income, not your personal income or tax returns. This makes them ideal for self-employed investors and business owners. We do require a credit check and down payment, but there's no traditional income verification.

What credit score do I need to get a loan from Grafton Funding?

For most DSCR rental loan programs, we generally look for a minimum credit score in the 660–680 range, though this can vary by program and loan-to-value. Fix and flip loans may have different requirements depending on experience and deal strength.

How much do I need to put down for a DSCR loan?

For DSCR rental loans, we typically lend up to 75–80% loan-to-value (LTV), meaning you'd need 20–25% as a down payment. The exact LTV depends on the property type, DSCR ratio, and your credit profile. We lend exclusively on non-owner occupied investment real estate.

How quickly can Grafton Funding close a loan?

Many of our transactions close in 2–4 weeks depending on the loan type, property, and how quickly documentation is provided. We prioritize responsive communication and efficient underwriting for investors who need to move fast on deals.

Does Grafton Funding work with first-time real estate investors?

Yes — we work with both new and experienced investors. For DSCR rental loans, first-time investors are welcome as long as the property cash flows and the borrower meets our credit and down payment requirements. For fix and flip loans, some experience is preferred but not always required.

Investment Property Loans in Tennessee (2026 Guide)

Jun 11
5 min read

Tennessee has quietly become one of the most sought-after real estate investment states in the country.

Nashville continues its remarkable run as one of the nation's fastest-growing cities — driven by corporate relocations, a booming tourism economy, and a steady influx of residents from higher-cost states. Memphis remains one of the highest-yield cash-flow markets in the entire country. Knoxville and Chattanooga offer affordable entry points with growing economies. And the Smoky Mountains deliver some of the strongest short-term rental returns on the East Coast.

Tennessee also has no state income tax — a meaningful advantage for investors tracking net returns.

Quick Answer: Investment property loans in Tennessee are available for DSCR long-term rentals, fix & flip projects, STR DSCR loans for vacation rentals, new construction, and bridge financing — without W-2s or tax returns. Most programs require a 640+ credit score and 20–25% down. Grafton Funding finances investment properties throughout Tennessee.

Why Tennessee Attracts Real Estate Investors

Nashville

Nashville has transformed from a regional city into a top-10 US metro by population growth. The combination of a thriving music and entertainment industry, major corporate headquarters (Amazon, Oracle, AllianceBernstein), and consistent relocation from California, New York, and Illinois has driven rental demand to historic highs.

Nashville is also one of the strongest Airbnb markets in the Southeast, consistently ranking among the top short-term rental cities nationally due to bachelorette parties, music tourism, and convention traffic.

Memphis

Memphis is one of the most compelling cash-flow markets in the country. Median home prices remain well below the national average, while rents produce gross yields that make DSCR ratios easy to achieve. The city has a large working-class and workforce renter population, a significant medical and logistics employment base (FedEx is headquartered here), and consistent rental demand.

Knoxville

Knoxville combines the University of Tennessee's large student population with a growing healthcare and technology sector. It's become a target market for investors seeking affordable entry prices relative to the cash flow they produce.

Smoky Mountains / Gatlinburg / Pigeon Forge

The Great Smoky Mountains National Park is the most visited national park in the United States. Gatlinburg and Pigeon Forge are the gateway cities — and their short-term rental markets are among the highest-grossing in the nation. Cabin rentals in this region regularly achieve annual revenues that dwarf their purchase prices.

Investment Property Loan Types Available in Tennessee

DSCR Loans (Long-Term Rentals)

DSCR loans are available throughout Tennessee for single-family homes, 2–4 unit properties, and condos. The loan qualifies on the property's rental income — no W-2s or tax returns required.

Minimum credit score: 640–680
Down payment: 20–25%
DSCR requirement: 1.0 or higher
Available statewide: Nashville, Memphis, Knoxville, Chattanooga, Clarksville, Murfreesboro, and all Tennessee markets

Fix & Flip Loans

Tennessee's growing urban cores and suburban expansion have created consistent fix and flip opportunities. Nashville suburbs and Memphis cash-flow neighborhoods are both active flip markets. Fix and flip loans are short-term (6–18 months), interest-only, and qualify based on ARV.

STR DSCR Loans (Airbnb / Vacation Rentals)

Tennessee has some of the strongest short-term rental markets in the country — Nashville, Gatlinburg, Pigeon Forge, and Chattanooga all support STR DSCR financing. STR DSCR loans use projected or actual short-term rental income (verified through AirDNA) to qualify.

Important for Smoky Mountain investors: The Gatlinburg/Pigeon Forge market uses cabin-specific income data. AirDNA provides market-level projections that most lenders accept for qualification purposes.

New Construction Loans

Tennessee's population growth has driven significant new construction demand. Draw-based construction loans are available for investors building new single-family rentals, duplexes, or small multifamily.

Bridge Loans

Fast-closing bridge loans are available for time-sensitive acquisitions, auction purchases, or situations where a property needs stabilization before permanent financing.

Ready to Finance an Investment Property in Tennessee?

Grafton Funding offers DSCR, fix & flip, and STR loan programs throughout Tennessee — no income documentation required.

View DSCR Loan Programs

Tennessee-Specific Considerations for Investors

No State Income Tax

Tennessee has no state income tax — meaning rental income is not subject to state-level taxation. This is a meaningful difference from states like California or New York and directly improves net returns.

Property Taxes

Tennessee's property tax rates are generally moderate — ranging from approximately 0.5%–1.5% of assessed value depending on the county. Davidson County (Nashville) tends to be on the higher end; rural counties are typically lower.

Landlord-Tenant Laws

Tennessee is generally considered landlord-friendly. The state has clear eviction procedures and does not have rent control.

Short-Term Rental Regulations

Nashville: Has implemented STR permitting with owner-occupied and non-owner-occupied permit categories. Verify current Nashville Metro zoning and permit requirements before closing.
Gatlinburg / Pigeon Forge: Both cities are highly STR-friendly and have historically welcomed vacation rentals as a core part of their economies.
Chattanooga: Has its own STR permitting; verify current regulations.

Top Tennessee Markets for Investment Property Loans

Market	Best For	Notes
Nashville	DSCR rentals, STR, fix & flip	Strong appreciation + rental demand
Memphis	High cash-flow DSCR rentals	Exceptional gross yields; neighborhood selection critical
Knoxville	DSCR rentals, student housing	University market, affordable entry
Chattanooga	DSCR rentals, STR downtown	Growing tech hub
Gatlinburg / Pigeon Forge	STR DSCR — cabin rentals	Among the highest-grossing STR markets nationally
Murfreesboro / Clarksville	Suburban DSCR rentals	Military base (Clarksville), commuter markets

What You Need to Qualify

For a DSCR loan in Tennessee:

Credit score: 640+ (680+ for best rates)
Down payment: 20–25%

DSCR: 1.0 or higher. No W-2s, tax returns, or employment verification required.

Out-of-state investors are welcome and commonly finance Tennessee investment properties.

Bottom Line

Tennessee offers exceptional investment fundamentals — no state income tax, strong rental demand in Nashville and Memphis, and some of the highest-performing STR markets nationally
DSCR, fix & flip, STR DSCR, new construction, and bridge loans available statewide
No W-2s or tax returns required; LLC financing supported
Smoky Mountain cabin STR market (Gatlinburg/Pigeon Forge) is one of the strongest in the country
Out-of-state investors welcome; borrower does not need to reside in Tennessee

Frequently Asked Questions

Can I finance an Airbnb in Tennessee without tax returns?

Yes. STR DSCR loans are available for Airbnb and vacation rental properties throughout Tennessee — including Nashville, Gatlinburg, Pigeon Forge, and Chattanooga. These loans qualify using AirDNA projected revenue rather than personal tax returns. No W-2s or employment verification required.

Does Grafton Funding lend throughout all of Tennessee?

Yes — statewide, including Nashville, Memphis, Knoxville, Chattanooga, Gatlinburg, Pigeon Forge, Murfreesboro, Clarksville, and all Tennessee markets. Tennessee is one of our primary Southeast focus states.

Are DSCR loans available for Smoky Mountain cabin rentals?

Yes. The Gatlinburg/Pigeon Forge area is one of the strongest STR markets in the country, and STR DSCR loans are available using AirDNA cabin income projections. This is one of the most active markets for STR DSCR financing — the high revenue-to-price ratios in this market often produce strong DSCR ratios.

What is the minimum down payment for a Tennessee investment property loan?

Most programs require 20–25% down for DSCR rental and STR loans. Fix and flip loans are evaluated on LTC and ARV. No W-2s or tax returns are required for either product.

Do I need to live in Tennessee to finance an investment property there?

No. Out-of-state investors commonly finance Tennessee investment properties — particularly in the cash-flow Memphis market and the STR-heavy Smoky Mountains. The subject property must be located in Tennessee, but the borrower can live anywhere.

Ready to Finance an Investment Property in Tennessee?

Grafton Funding lends throughout Tennessee — from Nashville and Memphis to Knoxville, Chattanooga, and the Smoky Mountains. Whether you're buying a long-term rental, a Nashville STR, or a Gatlinburg cabin, we can structure the right financing for your deal.

Start Your Pre-Qualification