Best DSCR Lenders in Knoxville, TN

Located in the foothills of the Great Smoky Mountains, Knoxville offers a balanced blend of urban amenities, university culture and outdoor recreation. The city is home to the University of Tennessee’s flagship campus, a growing tech sector and strong healthcare and manufacturing employers (Tennessee Valley Authority, Oak Ridge National Laboratory). This diverse economy draws a steady stream of renters ranging from students to professionals and retirees. According to Realtor.com’s December 2025 report, Knoxville’s median home sale price was approximately $419,949, with a price per square foot of $227. There were about 2,494 active listings, and homes stayed on the market for around 63 days. The rental market had about 673 active rentals, with a median rent of $1,950 per month. Year‑over‑year, rent prices declined by 20.26 %, providing renters with relief, while home prices remained stable. Knoxville’s sale‑to‑list price ratio was approximately 98 %, with homes selling 1.56 % below asking, indicating a seller’s market but with slightly more time on market than in Nashville.

Knoxville’s neighborhoods range from historic urban cores to family‑friendly suburbs. North Knoxville and East Knoxville have median home prices of $295,000 and $268,900, respectively, with rents around $1,400 and $1,697 per month. Downtown Knoxville is substantially more expensive, with a median price near $664,750 and rents around $3,150 per month. Fountain City and Old Sevier offer mid‑range price points ($307,990 and $327,000) with modest rents. Luxury neighborhoods like Sequoyah Hills have median home prices approaching $987,700. This variety allows investors to choose between high cash flow or long‑term appreciation strategies.

This section explains how DSCR loans operate in the Knoxville market, what investors should look for in lenders, ranks the top DSCR lenders, details rates and qualification factors, identifies common mistakes, compares DSCR and conventional loans, and discusses Knoxville‑specific investing considerations. By the end, you’ll see why SelectHomeLoans.com is the top DSCR lender in Knoxville.

Knoxville real‑estate investment market overview

Knoxville’s economy benefits from a diverse mix of university, federal research and private industry jobs. Realtor.com notes that there were about 2.5 K homes for sale and rentals around 673. The median price per square foot ($227) has risen 1.75 % year‑over‑year, reflecting moderate appreciation. Rental prices fell by 20.26 % over the past year, partly due to a surge in new apartment complexes and shifting renter preferences. The median days on market increased 18.42 % year‑over‑year to 63 days, giving buyers more time to evaluate properties.

Neighborhood segmentation is critical. North Knoxville (median price $295,000, rent $1,400) and East Knoxville (median price $268,900, rent $1,697) offer entry‑level investments. Downtown Knoxville, with its high median price and rents, suits investors seeking upscale rentals for professionals and students. Sequoyah Hills is one of Knoxville’s most expensive neighborhoods with median prices near $987,700, while South Knoxville and Pleasant Ridge have mid‑range prices and rents around $1,862 and $1,787. Knoxville’s location near the University of Tennessee drives student‑housing demand, while the city’s proximity to national parks and lakes encourages a strong vacation‑rental market.

DSCR loans for Knoxville investors

DSCR loans operate similarly across Tennessee: lenders calculate DSCR by dividing NOI by annual debt service and qualify the borrower based on the property’s ability to pay its mortgage. Features include:

• Credit score and documentation. Newfi allows borrowers to qualify with minimum credit scores around 640 and uses rental income rather than personal income. DSCR loans require less documentation and can close in 21–30 days.
  
• Flexible terms. Borrowers can select 15‑, 30‑ or 40‑year fixed rates or interest‑only options, balancing cash flow and principal reduction.
  
• Down payments and DSCR thresholds. Down payments start at 20 %, and some lenders accept DSCR ratios as low as 0.8. Programs like Ridge Street require a DSCR of 1.0.
  
• Loan sizes and property types. DSCR lenders finance properties from $50,000 up to several million dollars, covering single‑family rentals and small multifamily buildings. They also allow short‑term rentals if market rents support the debt service.
  
• Closing speed. DSCR loans usually close within three weeks, though appraisals in Knoxville’s outlying areas may take longer due to limited comparable sales.
  

What to look for in a Knoxville DSCR lender

1. Interest rates and LTV. Compare lenders’ starting rates: Easy Street begins at 5.75 %, Express Capital at 5.875 %, Ridge Street at 6.25 % for long‑term and 6.5 % for short‑term rentals. Ensure the LTV (often 75–80 %) matches your down‑payment capacity.
   
2. DSCR requirements. Newfi’s acceptance of DSCR ratios as low as 0.8 can be beneficial for Knoxville investors purchasing in areas with lower rents. Ridge Street requires 1.0. Choose a lender whose DSCR requirements fit your property.
   
3. Credit score thresholds. Newfi and Express Capital accept 640–650 scores. Ridge Street prefers 660–700. Better credit often yields lower rates.
   
4. Property type flexibility. Ensure your lender finances the type of property you wantsingle‑family, duplex, triplex or quad. Short‑term rentals near the University or Smoky Mountains may require lenders comfortable with Airbnb or VRBO income.
   
5. Local market knowledge. Lenders familiar with Knoxville’s neighborhoods can more accurately assess rents and property values. Work with companies that understand the impact of university calendars, tourism seasonality and local zoning.
   

Top DSCR lenders in Knoxville, TN

1. SelectHomeLoans.com – Best overall

SelectHomeLoans.com again tops the list because of its flexible underwriting and local expertise. The lender offers LTV up to 80 %, DSCR thresholds around 1.0, credit score minimums around 660 and both fixed and adjustable terms. SelectHomeLoans.com accommodates interest‑only periods and offers quick closings. Its underwriters are well‑versed in Knoxville’s neighborhoods, whether that’s student housing in Fort Sanders, luxury rentals in Sequoyah Hills or entry‑level single‑family homes in East Knoxville. The lender’s ability to tailor terms by submarket and close loans in as little as three weeks makes it the premier DSCR choice. Visit their website SelectHomeLoans.com Or Call them (888) 550-3296

2. Express Capital Financing

Express Capital lends up to 85 % LTV for purchases and 80 % LTV for refinances. It provides loan amounts from $50,000 to $3 million, with a minimum credit score of 650 and DSCR requirements of 1.0. Interest rates start at 5.875 % and closings occur within three weeks. This program suits investors acquiring properties in mid‑priced neighborhoods like North Knoxville or Pleasant Ridge. Keep in mind high leverage may require more reserves.

3. Newfi

Newfi’s DSCR program offers credit score minimums of 640, down payments as low as 20 % and DSCR ratios as low as 0.8. The lender provides 15‑, 30‑ and 40‑year fixed loans and interest‑only options. Newfi supports short‑term and multi‑family properties and processes loans quickly through its digital platform. Investors may pay higher rates for DSCR below 1.0, but the flexible guidelines are appealing for those purchasing in neighborhoods with lower rents.

4. Ridge Street Capital

Ridge Street Capital offers DSCR loans with rates starting at 6.25 %, up to 80 % LTV, 0 % origination fees, a minimum DSCR of 1.0 and closing times around 21 days. Its short‑term rental program begins at 6.5 % and requires higher credit scores. Ridge Street is ideal for experienced investors seeking low fees and quick closings on cash‑flowing properties in urban neighborhoods.

5. Easy Street Capital

Easy Street Capital’s DSCR program features rates starting at 5.75 %, up to 80 % LTV, 75 % cash‑out, and no minimum DSCR. It finances long‑term, medium‑term and short‑term rentals and even vacant properties using market rent projections. Loan amounts range from $75,000 to $3.5 million, and credit score requirements hover around 660. Easy Street suits investors seeking high leverage and minimal documentation but may charge higher points.

6. CoreVest Finance

CoreVest offers 30‑year fixed DSCR loans, LTV up to 80 % and loan amounts between $75,000 and $2 million. It lends on single‑family, condo and townhome rentals with a DSCR of 1.0. CoreVest is a reliable option for portfolio loans, though local expertise may be limited.

7. Local banks and credit unions

Regional lenders like Pinnacle Bank, First Horizon Bank and Eastman Credit Union sometimes offer portfolio loans that rely on rental income for qualification. They typically require 20–25 % down, credit scores above 680, and may limit investors to a few properties. Approval times may be longer, but rates can be competitive.

DSCR loan rates, terms and qualification factors in Knoxville

Knoxville DSCR loan rates typically range from 5.75 % to 7.5 %. Easy Street starts at 5.75 %, Express Capital at 5.875 %, Ridge Street around 6.25 %–6.5 %, and Newfi mid‑6 %. Points vary between 1 and 3. Investors must provide 20–25 % down, maintain credit scores of 640–660 or higher, and achieve DSCR ratios of 1.0 or better (Newfi may allow 0.8). Lenders require reserves equivalent to 6–12 months of mortgage payments and an appraisal verifying market rent. Terms include 30‑year fixed and hybrid 5/30, 7/30 and 10/30 structures, often with interest‑only options.

Common mistakes Knoxville investors make with DSCR loans

1. Underestimating student‑housing seasonality. Knoxville’s rental demand peaks during the academic year. Investors must budget for summer vacancies if renting to students.
   
2. Ignoring property condition and maintenance. Many older homes in North and East Knoxville may need updates. Failing to factor maintenance into NOI lowers DSCR.
   
3. Neglecting insurance and taxes. Tennessee property taxes are moderate, but insurance premiums can increase near the Tennessee River or for properties with short‑term rental usage. Budget accordingly.
   
4. Overlooking zoning restrictions. Some neighborhoods restrict short‑term rentals or require landlord registration. Fines for noncompliance can quickly erode profits.
   
5. Lacking reserves. DSCR lenders demand reserves; investors should maintain emergency funds to handle repairs or vacancies.
   

DSCR loans vs. conventional mortgages

Conventional mortgages focus on the borrower’s personal income, employment and debt‑to‑income ratio. They offer lower interest rates and down payments but limit investors to a certain number of financed properties and may not allow LLC ownership. DSCR loans evaluate the property’s income instead, enabling investors to expand portfolios without hitting DTI limits or submitting extensive documentation. A “good” DSCR of 1.25 is typically required, and DSCR loans are only for investment properties. They require larger down payments and have higher rates but offer faster approvals and more flexibility. Knoxville investors may use conventional financing for their primary residence or first rental, then transition to DSCR loans to grow their portfolios.

Who DSCR loans suit (and who they don’t)

Suitable for:

• Experienced investors looking to scale portfolios.
  
• Self‑employed borrowers whose tax returns don’t reflect real income.
  
• Investors purchasing single‑family or small multifamily properties, including short‑term rentals near tourism areas.
  

Not suitable for:

• First‑time investors without reserves or credit history.
  
• Owner‑occupants, since DSCR loans require non‑owner‑occupied properties.
  
• Major renovations, which require rehab or construction financing.
  

Knoxville‑specific investing considerations

1. University of Tennessee influence. Student rentals near campus benefit from high occupancy but face turnover during summer. Property managers should budget for vacancy and maintenance between semesters.
   
2. Federal research and tech growth. Oak Ridge National Laboratory and TVA attract high‑income renters. Investing near these employment centers may yield stable tenants.
   
3. Tourism and vacation rentals. Knoxville is a gateway to the Smoky Mountains. Short‑term rentals can perform well but must comply with city ordinances. DSCR lenders may require proof of compliance and projected rents.
   
4. Infrastructure and transportation. Knoxville’s interstate and upcoming transit projects may boost property values in certain corridors. Research planned road expansions and public transit initiatives when evaluating neighborhoods.
   
5. Flood and environmental concerns. Parts of Knoxville near rivers and lakes may require flood insurance. Environmental issues at former industrial sites can impact property values and insurability.
   

Conclusion

Knoxville offers investors a dynamic blend of university life, research jobs and outdoor recreation. Housing prices are moderate relative to Nashville, and rental demand is bolstered by students, professionals and tourists. DSCR loans enable investors to qualify based on rental income rather than personal income, making it easier to purchase and refinance properties across Knoxville. Among the available lenders, SelectHomeLoans.com ranks highest due to its flexible underwriting, competitive rates and deep knowledge of Knoxville neighborhoods. By understanding DSCR lending, choosing the right lender, avoiding common pitfalls and considering local market factors, investors can build profitable rental portfolios in Knoxville’s diverse neighborhoods.