The quick read: Compare Tennessee hard money lenders by lender type first, then by the dollar amount each will advance, how the rehab is funded, points plus interest over a realistic hold, whether the term outlasts local selling time, and what an extension costs. Tennessee adds its own lines: a published formula rate, two recordation taxes at closing, and franchise and excise tax on entity profits.
A fix-and-flip or short-term rehab in Tennessee can be financed by several kinds of lender, and each reads the same file differently. This guide sets out a statewide comparison framework by lender type, the Tennessee-specific costs and rules that belong in your spreadsheet, and the selling-time data for Nashville, Memphis, Knoxville and Chattanooga that should set your loan term. It names no lenders; it tells you what to ask each type. For a city-level scoring rubric on draws and holdbacks, see how to compare hard money lenders in Chattanooga.
How do you compare hard money lenders in Tennessee?
You compare hard money lenders in Tennessee by putting every quote on one grid: the dollar advance on purchase, the rehab share funded, points plus interest over your realistic hold, the term against local selling time, the extension right and fee, and the Tennessee recording taxes due at closing. A headline rate leaves most of those lines out.
Build the grid with one row per quote and these columns:
Dollar advance: the maximum loan in dollars at your purchase price and rehab budget, and which test produced it (purchase price, as-is value, after-repair value or total project cost).
Rehab funding: the share of the budget funded, whether it is paid in arrears by draw or held back at closing, and the number of business days from a complete draw request to the wire.
Total cost: points charged at closing plus interest over the hold you actually expect, and whether interest accrues on the full commitment or only on funded dollars.
Term: months to maturity, measured against rehab time plus the local selling time shown later in this guide.
Extension: whether it is a contractual right or a discretionary request, what triggers it, and the fee.
Tennessee closing costs: the realty transfer tax and the mortgage tax, covered below.
A percentage answer to the dollar-advance question is not comparable across lenders, because each one may apply its percentage to a different base. A dollar answer is.
Which lender types finance hard money deals in Tennessee?
Tennessee fix-and-flip and short-term rehab deals are financed by four lender types: private asset-based lenders, banks, bridge lenders and debt funds, and term rental lenders that take out the short loan. Each type answers to different rules and sizes the loan on a different base. The table dates each published reference and names its source.
Table: Tennessee hard money lender types compared, references as of September 2026
| Lender type | What sizes the loan | Published reference (dated, sourced) | Ask before you sign |
|---|---|---|---|
| Private asset-based (hard money) lender | Ask whether it is purchase price, as-is value, after-repair value or total cost | No regulator-published leverage grid found. TDFI formula rate: 10.85% per annum as of Sept. 22, 2026; the page does not say which loans it governs | Which Tennessee interest statute the note is written under, and the maximum loan in dollars |
| Bank | For a purchase, value is the lesser of actual acquisition cost or the estimate of value (12 CFR part 34, App. A) | Supervisory LTV limits: 85% improved property, 85% 1- to 4-family residential construction, 80% commercial and multifamily construction, 75% land development, 65% raw land (12 CFR part 34, App. A, 2024 edition) | Whether its internal limit sits below the supervisory ceiling, and what recourse it requires |
| Bridge lender or debt fund | Ask whether it sizes on as-is value, the business plan or the exit | SOFR: 3.87% as of Sept. 23, 2026 (FRED) | Whether the rate floats over SOFR or prime, any floor, and prepayment terms |
| Term rental (DSCR) lender, the takeout | Ask how it tests rent against the new payment | 10-year Treasury: 4.96% as of Sept. 22, 2026 (FRED) | How long you must own before it will appraise at the after-repair value |
| Brokerage (YieldStack, publisher of this page) | YieldStack is a commercial mortgage brokerage, not a lender. | Zero upfront; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing. | Every credit decision is made by the lender. |
Two rows carry the most weight. First, the bank row's valuation rule: under the supervisory appendix, a loan to purchase an existing property measures value as the lesser of the actual acquisition cost or the estimate of value, so a discount you negotiate does not raise a bank's advance. Ask any non-bank lender which base it uses instead. Second, the supervisory limits are ceilings for internal policy, and the same appendix allows individual loans above them when other credit factors support it, so ask the bank for its own number rather than assuming the ceiling.
How does Tennessee's formula rate show up in a hard money quote?
Tennessee's Department of Financial Institutions publishes a formula rate, stated as 10.85 percent per annum as of September 22, 2026, which is a ceiling of 4 percent over the weekly average prime loan rate of 6.85 percent published by the Federal Reserve on September 21. Ask every lender which interest statute its note relies on.
The department's page identifies Chapter 464, Public Acts of 1983, as the legislation regulating interest rates in Tennessee, and says the rate remains in effect until the average prime loan rate announced by the Federal Reserve changes. The page does not say which loans the formula rate governs, so this guide does not either. Put the question to the lender and to your own attorney before you compare two quotes on rate.
The rate backdrop moved this month. The Federal Reserve raised the federal funds target range by a quarter point on September 16, 2026, to 3.75 to 4.00 percent. FRED's daily bank prime series read 7.00 percent as of September 21, and SOFR stood at 3.87 percent as of September 23. The department's 6.85 percent figure is a weekly average; FRED's 7.00 percent is a daily print. A quote that floats over prime or SOFR moves with those indexes; a fixed quote does not. Ask which one you are being offered and whether a floor applies.
What Tennessee taxes land on a financed flip at closing?
Tennessee charges two recordation taxes on a typical financed flip purchase: a realty transfer tax of 37 cents per $100 of purchase price, and a mortgage tax of 11.5 cents per $100 of indebtedness on the recorded loan, with the first $2,000 of the debt exempt, according to the Tennessee Department of Revenue rates page as read in September 2026.
Illustrative example (not a real transaction): a $250,000 purchase financed with a $200,000 loan.
Realty transfer tax: $250,000 × 0.37% (37 cents per $100) = $925.00
Mortgage tax: ($200,000 − $2,000) × 0.115% (11.5 cents per $100) = $227.70
These taxes do not change between lenders on the same loan amount, but the loan amount does. A lender that advances more, or that records a larger commitment including the rehab budget, produces a larger mortgage-tax line. The department describes the mortgage tax as imposed on the recordation of instruments evidencing indebtedness, so ask your title company how a refinance takeout, or any recorded modification for an extension, would be taxed before you pick a lender whose extension depends on one.
How do Tennessee income and entity taxes change flip math?
Tennessee's Hall income tax reached only interest from bonds and notes and dividends from stock, and it was repealed for tax periods beginning on or after January 1, 2021; an LLC or corporation doing business in Tennessee still pays franchise and excise tax, at 0.25 percent of Tennessee net worth and 6.5 percent of Tennessee taxable income.
That split matters for a lender comparison because it sits between the lender's payoff and your profit. A deal that works on gross margin at one lender's points and rate can look thin once the excise tax comes out of the entity's taxable income. The department also states a minimum franchise tax of $100 for entities registered through the Secretary of State, whether active or inactive. Run your comparison on after-tax profit per quote, and confirm your entity's position with a tax adviser; exemptions exist, and this guide does not assess them.
How long a loan term do Tennessee's metros call for?
Set the loan term to cover the rehab plus local selling time: Realtor.com data on FRED put August 2026 median days on market at 60 in the Nashville metro, 68 in Memphis, 58 in Knoxville and 65 in Chattanooga, so a term that only fits the construction schedule leaves no room to sell.
| Metro (CBSA) | Median days on market, August 2026 |
|---|---|
| Nashville-Davidson--Murfreesboro--Franklin, TN | 60 |
| Memphis, TN-MS-AR | 68 |
| Knoxville, TN | 58 |
| Chattanooga, TN-GA | 65 |
Table: median days on market by Tennessee metro, Realtor.com via FRED, August 2026
FRED describes this metric as the median number of days listings spend on the market, measured from the listing date to closing, pending or off-market status depending on data availability. Two cautions follow. It is a median, so half of listings took longer. And where the clock stops at pending, your buyer's closing period still sits on top of it. Add your rehab schedule, the marketing period for your metro, and a buyer's closing window, then compare that total with each quote's term and extension. For the statewide picture, see the Tennessee market hub; for a Memphis-specific product view, see fix-and-flip loans in Memphis.
What should you ask every Tennessee hard money lender before signing?
Ask every Tennessee hard money lender the same written questions, so the answers line up in one grid: the maximum loan in dollars and the test behind it, the rehab draw process in days, total points and the interest accrual basis, the term and extension terms, and which interest statute governs the note.
Dollar advance: "At my purchase price and rehab budget, what is the maximum loan in dollars, and which of your tests produced it?"
Draws: "How many business days from a complete draw request to the wire, and who orders the inspection?"
Cost: "Are points charged on the full commitment, and does interest accrue on undrawn rehab funds?"
Term: "Is the extension a right or a request, what triggers it, and what does it cost?"
Rate law: "Which Tennessee interest statute is this note written under?"
Recording: "Will the recorded amount be the full commitment, and will an extension require a recorded modification?"
Takeout: "If I keep the property, what does your takeout, or the takeout you expect, require before it appraises at the after-repair value?"
How do you get lenders competing for a Tennessee hard money loan?
You get Tennessee hard money lenders competing by sending one complete file, meaning the purchase contract, rehab budget and scope, after-repair value support, timeline and exit, to several lender types at once, so every quote answers the same dollar-advance, cost, term and extension questions side by side.
YieldStack is a commercial mortgage brokerage, not a lender. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed. To see how the product works, read the hard money loans overview, then submit your Tennessee deal.
The bottom line
Comparing hard money lenders in Tennessee is a grid exercise, not a rate hunt. Size each quote in dollars, fund the rehab on a known draw clock, price points and interest over the real hold, and set the term against selling time: August 2026 medians ran 58 to 68 days on market across Knoxville, Nashville, Chattanooga and Memphis. Then add what Tennessee adds. The Department of Financial Institutions put its formula rate at 10.85 percent as of September 22, 2026, so ask which statute each note relies on. Budget the recordation taxes, 37 cents per $100 on the transfer and 11.5 cents per $100 of debt above $2,000, and net the franchise and excise tax out of the entity's profit before deciding which quote is cheapest.