DSCR INVESTOR LOANS · LICENSED IN TENNESSEE (2412324)
DSCR financing for Tennessee rental property investors from Integrity Home Lending. The deal qualifies on its own cash flow, not your personal income. Licensed in Tennessee, 2412324.
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Integrity Home Lending, LLC · NMLS #2412324 · Equal Housing Opportunity
DSCR loans are for investment/business purpose only. Not available for primary residences.
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Tennessee Investor Loans
A DSCR (Debt Service Coverage Ratio) loan is an investment property loan that qualifies on the rental income the property produces rather than on your personal income. There are no tax returns, no W-2s, and no employment verification, and you can close in an LLC.
Tennessee draws investors for two reasons that rarely appear together: no state personal income tax, and the Smoky Mountains corridor, which is one of the highest-revenue short-term rental markets in the country. Both are real. The short-term rental legal position is more complicated than most investors are told, and it matters most at the moment you buy.
Integrity Home Lending is licensed in Tennessee by the Tennessee Department of Financial Institutions, Mortgage License 2412324, and we work as a broker with wholesale investor lenders rather than as a retail bank. That means we shop your scenario across multiple DSCR programs instead of fitting you to one lender’s box.
This is the single most important thing a Tennessee short-term rental buyer can know, and it is routinely missed.
The Short-Term Rental Unit Act (T.C.A. §§ 13-7-601 through 13-7-606, effective May 17, 2018) is often described as a state preemption. That is only half right. It does restrict local governments from prohibiting short-term rentals based on classification, use, or occupancy, and § 13-7-603 grandfathers a property that was already being used as a short-term rental before the local ordinance was enacted, so a city cannot retroactively shut down an existing operator.
But that protection is not permanent and it is not attached to the building. It ends when the property is sold or transferred, or when short-term rental use stops for thirty continuous days.
The consequence for an investor is direct: if you buy a property whose short-term rental use only survives because it was grandfathered, you do not inherit the grandfather rights. The seller's operating history does not carry over to you, and a property that has been generating short-term rental income for years can become non-conforming the day it changes hands. Confirm that the current ordinance permits short-term rental use on its own terms, independent of any legacy status, before you go under contract.
Tennessee imposes no personal income tax, so rental income is not taxed at the state personal level. As with any no-income-tax state, that does not mean no taxes: short-term rentals carry state and local sales tax plus local occupancy or lodging taxes, and in the Sevier County tourism corridor the combined lodging tax load is substantial. Model those lines rather than assuming them away.
Gatlinburg & Pigeon Forge (Sevier County) — the center of Tennessee short-term rental investing and one of the strongest cabin-rental markets in the United States. It is also where the grandfather question above is most likely to decide a deal, because the permit landscape has changed repeatedly.
Nashville — a deep long-term rental market with a large and actively enforced short-term rental permitting regime. Owner-occupancy distinctions matter here more than almost anywhere else in the state.
Knoxville — lower entry pricing than Nashville with a university and hospital employment base underneath long-term rental demand, and proximity to the Smokies corridor.
Memphis — the state's classic long-term rental cash-flow market, where rent-to-price ratios clear DSCR thresholds more easily than in the middle of the state.
Market characterizations are general and are drawn from third-party rental market data and public sources. They are not projections, and they are not a representation about any specific property. Rental income, occupancy, and property values vary and can decline. Statutory and regulatory references are provided for general information and are not legal or tax advice; confirm current law and local rules with your own advisors.
The ratio is the property's gross rental income divided by its total monthly debt obligation, including principal, interest, taxes, insurance, and any association dues. A property that produces more income than it costs to carry has a ratio above 1.0.
Two Tennessee-specific items move that calculation more than investors expect, and both are worth modeling before you go under contract:
For short-term rentals, lenders differ on how they treat income — some use market rent for a long-term tenancy, others will use documented short-term rental history or a projection from a recognized data source. Which approach a lender takes can decide whether a given property qualifies at all, and it is a large part of why we shop the scenario rather than sending it to one desk.
Full program parameters, including credit and reserve requirements, are on our investor loans page. Terms and eligibility are determined by the wholesale lender and are subject to underwriting approval.
Yes. A DSCR loan qualifies on the property's rental income rather than your personal income, so tax returns, W-2s, and employment verification are not part of the file. Credit, reserves, and the property's cash flow are what drive the decision.
Yes. DSCR loans are business-purpose loans and can close in the name of an LLC, LP, or corporation. This is one of the main structural differences between a DSCR loan and a conventional investment property mortgage, which generally requires you to take title personally.
Yes. Cabin and short-term rental properties in the Smoky Mountains corridor are a common DSCR use case. Lenders differ in how they underwrite the income: some use documented short-term rental history, others use long-term market rent, and that choice can decide whether a given cabin qualifies. Because programs vary, this is a scenario worth shopping across multiple lenders rather than sending to one desk.
No. Under T.C.A. § 13-7-603 the protection ends when the property is sold or transferred, and also if short-term rental use stops for thirty continuous days. You do not inherit the seller's grandfather rights. Before you go under contract, confirm the current local ordinance permits short-term rental use on its own terms rather than relying on the property's operating history.
Tennessee has no state personal income tax, so rental income is not taxed at the state personal level. Short-term rentals still carry state and local sales tax plus local occupancy or lodging taxes, and in the Sevier County tourism corridor that combined load is substantial. Consult your tax advisor about your situation.
Yes. Integrity Home Lending, LLC is licensed by the Tennessee Department of Financial Institutions under Mortgage License 2412324, NMLS #2412324. You can verify our license at NMLS Consumer Access. Integrity Home Lending is a mortgage lender and broker, not a bank or credit union.
Tell us the property and what you are trying to do with it. A licensed loan officer from our team responds within one business day.
Equal Housing Opportunity
Integrity Home Lending, LLC | NMLS ID # 2412324 (www.nmlsconsumeraccess.org) | 877-445-3631 | 7185 Colfax Ave #100-F, Cumming, GA 30040
Tennessee: Licensed by the Tennessee Department of Financial Institutions, Mortgage License 2412324.
Licensed in: AK (AK2412324), AL (23350), CO (2412324), FL (MLD 2366), GA (2412324), MD (2412324), MS (2412324), NC (L-216384), NJ (2412324), OK (MB018168), PA (112728), SC (2412324), TN (2412324), VA (MC-7702).
DSCR loans are non-QM, business-purpose loans. For investment/business purpose only. Not available for primary residence or for personal, family, or household use. This is not a commitment to lend. Terms, rates, and eligibility are subject to underwriting approval and may vary. Rental income figures and market characterizations are general information drawn from third-party sources, are not projections, and are not a representation about any specific property. Integrity Home Lending, LLC is a licensed mortgage lender and broker and is not a bank, credit union, or depository institution, and is not affiliated with or endorsed by any government agency.
