Many Nashville rentals started as construction loans. The tall-and-skinny homes and two-unit HPR builds in The Nations, Wedgewood-Houston and East Nashville were often financed short term. A DSCR rate-and-term refinance replaces that debt with a 30-year payment based on long-term rent.
In short: LendingStreet refinances 1-8 unit rentals in the Nashville area with DSCR rate-and-term loans that pay off hard money, a bridge loan or an existing mortgage and qualify on the property's rent, with no W-2s or tax returns. Loans start at $150,000, rate-and-term goes up to 80% LTV on some programs, and the standard minimum DSCR is 1.0x with a 620 minimum credit score. In Nashville, most refinances involve newer infill homes, HPR duplexes and suburban rentals, and Metro's short-term rental limits mean most loans are underwritten on 12-month leases.
Nashville's growth in healthcare, music, tech and corporate offices has brought steady renter demand. Investors build or buy newer infill homes and suburban rentals, often with construction or bridge loans, and refinance once the property is leased.
Others bought during the short-term rental boom and now need to switch to long-term leases because of Metro's rules. A rate-and-term DSCR refinance on the long-term rent can lower the payment or extend the term.
Nashville rentals range from in-town infill to suburban homes, each with its own refinance issues.
| Area | Typical rental stock | Common refinance situation |
|---|---|---|
| The Nations, Wedgewood-Houston and East Nashville | Newer tall-and-skinny and HPR duplexes | Refinancing a construction or bridge loan |
| Antioch, Madison and Donelson | 1970s to 2000s single-family homes | Replacing a bank or bridge loan |
| Murfreesboro, Smyrna and La Vergne | Newer suburban homes, many HOAs | Rate-and-term on a newer rental |
| Bordeaux and Whites Creek | Older homes on larger lots | Paying off rehab money |
A rate-and-term refinance pays off the existing loan and closing costs and changes the rate, term or structure, without taking meaningful cash out. Because it adds no new equity draw, leverage can reach up to 80% LTV on some programs, versus up to 75% on a cash-out. If you need cash for the next deal, see our Tennessee cash-out page instead.
Common reasons to choose rate-and-term:
This example is illustrative and not a quote. A newer three-bedroom home in Antioch was bought with a bridge loan, updated and leased for 12 months. It appraises at $415,000 and rents for $2,650 a month. The bridge loan balance is $285,000, with an interest-only payment of about $2,731 a month.
A rate-and-term DSCR refinance of $293,500 covers the payoff plus about $8,500 in estimated closing costs, roughly 71% LTV. Estimated principal and interest on a 30-year fixed loan is about $1,977. With taxes of $210 and insurance of $175 plus $40 in HOA dues, the monthly payment is about $2,402, for a DSCR of about 1.10x.
The new payment is about $754 a month lower than under the bridge loan, and it is fixed for 30 years instead of coming due. The ratio clears the 1.0x standard minimum.
| Item | Before (bridge loan) | After (DSCR refinance) |
|---|---|---|
| Loan balance | $285,000 | $293,500 |
| Monthly loan payment | $2,731 (interest-only) | $1,977 (est. principal and interest) |
| Property taxes | $210 | $210 |
| Insurance and HOA | $215 | $215 |
| Total monthly payment | $3,156 | $2,402 |
| DSCR at $2,650 rent | About 0.84x | About 1.10x |
| Loan term | Short term, comes due | 30-year fixed |
For a rate-and-term refinance, the appraisal sets both the value used for LTV and the market rent used for DSCR. Single-family homes get a rent schedule with the appraisal, and 2-4 unit properties are appraised on a small residential income form. In Nashville, appraisers compare HPR units and tall-and-skinny homes to similar new builds, and a home that operated as an STR is valued on long-term rent.
Tennessee assesses residential property at a 25% assessment ratio. Davidson County reappraises on a four-year cycle, and recent reappraisals raised values sharply. Inside the Urban Services District, the Metro rate is higher than in the General Services District.
A newly built home may only have a land assessment on file. Budget taxes on the finished value. Tennessee charges a recordation tax on new mortgages; ask the title company how it applies to the refinance.
Homes in Rutherford, Williamson, Wilson and Sumner counties each have their own county rate and reappraisal schedule, so a Murfreesboro rental and an Antioch rental with the same rent can produce different ratios.
Middle Tennessee has seen major tornadoes and the 2010 flood. Homes near the Cumberland River, Mill Creek or Richland Creek may be in flood zones. Newer construction usually helps the premium.
Metro Nashville does not issue new non-owner-occupied short-term rental permits in most residential zones, so many investors who bought for STR income have moved to long-term leases. If your plan uses STR income, the property needs a valid permit and zoning that allows it.
Two-unit infill homes are often split under a horizontal property regime (HPR), so each side can be financed on its own. The appraiser treats each as a separate home with its own rent.
Start the refinance 45 to 60 days before your short-term loan matures. Seasoning rules, meaning how long you must own the property before the new loan can use the appraised value, vary by program. In Nashville, refinances often follow construction completion, when a builder or investor leases a new home and pays off the construction loan.
Send the address, payoff letter, lease and target loan amount through the form below or call (877) 298-1001. The financing team will run the ratio at a few loan amounts and come back with options, including sub-1.0 DSCR programs where they fit. We look at rentals across Davidson County and the surrounding Rutherford, Williamson, Wilson and Sumner counties. If you want to test the numbers first, our DSCR calculator works best with the real tax bill and a current insurance quote rather than estimates.
Yes. Many investors switch to 12-month leases because of Metro's rules. The loan then qualifies on long-term market rent.
Each HPR unit is usually treated as a separate home, so each side can be refinanced on its own rent.
It can. Reappraisal years can raise the assessed value. Use the latest value notice and tax rate.
Yes. We look at 1-8 unit rentals across the Nashville area.
A rate-and-term refinance pays off existing debt and closing costs with little or no cash back, and some programs allow up to 80% LTV. A cash-out refinance lets you pull equity, up to 75% LTV.
Some programs accept a DSCR below 1.0x. A smaller loan or a lower insurance quote can also raise the ratio.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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