Memphis, the cultural hub of the Mississippi Delta and home of blues, soul and rock ‘n’ roll, offers real‑estate investors a very different landscape from Nashville. With a low cost of living, a diversified economy anchored by healthcare (St. Jude Children’s Research Hospital), manufacturing (International Paper, FedEx) and logistics (the busiest cargo airport in the United States), Memphis attracts both renters and bargain‑seeking buyers. Realtor.com reports that as of December 2025 the median home sale price in Memphis was just $199,900, with a price per square foot of $129. The market had about 3,333 active listings, and homes took approximately 75 days to sell. There were roughly 2,150 rental properties available, with a median rent of about $1,395 per month. Year‑over‑year, the median sale price declined 15.26 %, reflecting buyer leverage and greater affordability. The sale‑to‑list price ratio was about 97 %, meaning properties sold 2.94 % below asking price. Despite the price softness, Memphis remains attractive to investors due to steady rental demand and relatively low entry costs.
Neighborhoods vary widely in price and rent. Midtown and East Memphis command mid‑tier prices ($275,000–$375,000) and rents around $1,400–$1,800 per month. Downtown Memphis has a median home price of roughly $287,000 and rents near $1,697, attracting young professionals and tourists. University District and Cordova are more expensive than average, with median prices around $260,000 and $335,000 and rents near $1,300–$1,762. Affordable options include Frayser, South Memphis and Westwood, where median home prices range from $85,000 to $115,000 and rents hover around $895–$1,136. The variety of submarkets allows investors to pursue value‑add strategies in low‑cost neighborhoods or cash‑flow plays in mid‑range areas.
This article explores Memphis’s real‑estate landscape for investors seeking DSCR loans. We explain DSCR financing, highlight what to look for in a lender, rank top DSCR lenders, examine rates and qualification factors, outline common mistakes, compare DSCR loans with conventional mortgages and discuss Memphis‑specific considerations. By the end, you’ll understand why SelectHomeLoans.com is the premier DSCR lender for the Bluff City.
Memphis real‑estate investment market overview
Memphis benefits from its status as a logistics hub: FedEx’s global headquarters and the Memphis International Airport (the busiest cargo airport in North America) create tens of thousands of jobs. The city also hosts major healthcare and higher education institutions. Realtor.com notes that about 3.3 K homes were listed for sale, offering buyers options without driving up competition. Rental inventory remained high, with around 2.2 K active rental listings. The median price per square foot of $129 provides a convenient gauge for comparing neighborhood value. The market is considered balanced: Memphis ranked around #7077 on the Hotness Index, with homes selling in a median of 75 days. Investors thus have time to negotiate and conduct due diligence before closing.
Neighborhood analysis reveals diverse opportunities. University District features mid‑priced single‑family homes and multifamily properties, with a median home price of $260,000, $165 per square foot, and rents around $1,300 per month. Midtown offers slightly higher prices (about $275,000 and $159 per square foot) and rents near $1,400 per month. East Memphis commands a median price around $375,000 with rents near $1,800. Affordable neighborhoods like Frayser and South Memphis have median home prices below $110,000 and rents in the $895–$1,050 range, making them ideal for investors targeting high cash‑on‑cash returns. Cordova and Southeast Memphis are popular suburban markets with median prices around $335,000 and $184,950, respectively, and rents between $1,470 and $1,762. The wide spread in price points means investors can find deals suited to their budgets and risk tolerance.
DSCR loans for Memphis real‑estate investors
As with Nashville, DSCR loans in Memphis allow investors to qualify based on rental income rather than personal income. The DSCR formula remains the same: NOI divided by annual mortgage payments. Many lenders accept a DSCR of 1.0 (breakeven) or even 0.8 with compensating factors. Key characteristics include:
- Low documentation. Lenders rely on a rent survey and appraisal; personal tax returns and W‑2s aren’t required. Newfi highlights that DSCR loans permit qualification with a minimum 640 credit score and do not require income verification.
- Varied term options. Investors can choose 15‑, 30‑ or 40‑year fixed‑rate DSCR loans or interest‑only loans to maximize cash flow.
- Down payment and leverage. Down payments start at 20 %; programs like Express Capital Finance offer up to 85 % LTV for purchases. Newfi typically accepts DSCR ratios as low as 0.8, while Ridge Street prefers 1.0.
- Short‑term rental eligibility. Many DSCR lenders will fund Airbnb or vacation rentals in Memphis, provided the investor can demonstrate market rent via STR data. However, some neighborhoods have restrictions on short‑term rentals, so confirm local ordinances.
- Closing speed. DSCR loans generally close within three weeks, but the timeline may be longer in Memphis if appraisers are busy or if the property is multifamily.
What to look for in a Memphis DSCR lender
- Rates and fees. Memphis investors should shop for the best combination of rate and fees. Easy Street offers rates from 5.75 % with no minimum DSCR, while Express Capital begins at 5.875 %. Ridge Street’s long‑term rentals start around 6.25 % and short‑term at 6.5 %. Lower rates may be available for high credit scores and DSCR above 1.25.
- Maximum LTV and DSCR thresholds. Express Capital’s high leverage (85 %) is appealing, but Newfi’s 0.8 DSCR tolerance may help investors purchase lower‑rent properties. Compare LTV and DSCR requirements to match your capital.
- Credit score requirements. Borrowers with credit scores 640–660 can qualify with Newfi or Express Capital. If your credit score exceeds 700, Ridge Street may offer better pricing. Lower scores may require paying points or using private lenders.
- Property types and loan sizes. Ensure the lender finances the type of property you want (single‑family, small multifamily, condo). Express Capital finances loan amounts from $50,000 to $3 million, while CoreVest finances $75,000 and up.
- Local experience. Work with lenders familiar with Memphis neighborhoods and rental demand. Underwriters who understand the difference between Midtown and Frayser will evaluate rent comps more accurately.
Top DSCR lenders in Memphis, TN
1. SelectHomeLoans.com – Best overall
SelectHomeLoans.com ranks #1 in Memphis due to its flexible terms, competitive rates and strong local expertise. The company offers DSCR loans with LTV up to 80 %, DSCR thresholds around 1.00–1.20, and credit scores as low as 660. Borrowers can choose 30‑year fixed, 5/1 and 7/1 ARM or 30‑year interest‑only terms. SelectHomeLoans.com tailors loan terms by neighborhood; for example, it may offer higher leverage in Cordova or University District and require more conservative DSCR ratios in Westwood or Frayser. The firm’s underwriters know local zoning, rental regulations and property taxes. Applications typically close within three weeks. Combined with dedicated service, these features make SelectHomeLoans.com the top DSCR lender in Memphis. Visit their website SelectHomeLoans.com Or Call them (888) 550-3296
2. Express Capital Financing
Express Capital’s high leverage program is attractive for investors looking to maximize returns. It provides 85 % LTV on purchases, 80 % LTV on rate‑and‑term refinances and 75 % LTV on cash‑out refinances. Loan amounts range from $50,000 to $3 million; properties can have up to nine units. Borrowers need a 650 credit score, and the minimum DSCR is 1.0. Interest rates start around 5.875 %, and loans close in about three weeks. This program suits investors purchasing mid‑priced properties in Midtown or Cordova. However, high leverage may carry higher rates and reserves.
3. Newfi
Newfi offers DSCR loans with credit score minimums of 640, 20 % down payments and DSCR ratios as low as 0.8. The lender provides 15‑, 30‑ and 40‑year fixed loans and interest‑only options, making it easy to tailor cash flow. Newfi supports short‑term rentals and multi‑family properties, including cash‑out refinances. Digital applications speed the process, but rates may be slightly higher for DSCR <1.0.
4. Ridge Street Capital
Ridge Street Capital’s long‑term DSCR program features rates starting at 6.25 %, LTV up to 80 %, 0 % origination points, minimum DSCR 1.0 and closings in roughly 21 days. Its short‑term rental program has rates starting at 6.5 %, with similar leverage but higher credit score requirements around 700. Ridge Street is ideal for experienced investors seeking minimal fees and quick closings on high‑cash‑flow properties in Midtown or Downtown.
5. Easy Street Capital
Easy Street’s Tennessee DSCR program advertises rates starting at 5.75 %, up to 80 % LTV, 75 % LTV cash‑out, and no minimum DSCR requirement. Loan amounts range from $75,000 to $3.5 million. The program finances long‑term, medium‑term and short‑term rentals and even vacant properties using projected market rents. Borrowers typically need credit scores around 660. Easy Street appeals to investors seeking maximum flexibility and high leverage, though points may be higher.
6. CoreVest Finance
CoreVest provides 30‑year fixed DSCR loans, LTV up to 80 % and loan amounts from $75,000 to over $2 million. It finances single‑family and small multifamily properties and requires a DSCR of 1.0. CoreVest’s national scale and portfolio loan options make it suitable for investors acquiring multiple properties. However, underwriting is more standardized and may not cater to unique Memphis submarkets.
7. Local banks and credit unions
Local institutions such as Pinnacle Bank, First Horizon Bank and Memphis City Employees Credit Union offer investor loans or portfolio loans. These loans typically require 20–25 % down, credit scores above 680, and may limit the number of financed properties. Approval may take longer than DSCR lenders, but rates can be competitive. Check whether these programs allow properties held in LLCs and whether they consider rental income for qualification.
DSCR loan rates, terms and qualification factors in Memphis
DSCR loan rates in Memphis fall between 5.75 % and 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 range from 1–3 %. Borrowers must provide 20–25 % down, maintain credit scores of at least 640–660, and achieve DSCR ratios of 1.0 or higher (Newfi may allow 0.8). Lenders require 6–12 months of reserves. Terms include 30‑year fixed, 5/30, 7/30 and 10/30 hybrids, often with interest‑only periods. Short‑term rentals may have additional documentation requirements.
Common mistakes Memphis investors make with DSCR loans
- Underestimating vacancy and turnover costs. Memphis has more affordable rental stock, but vacancy rates can vary widely by neighborhood. Investors must budget for tenant turnover, especially in student‑oriented areas.
- Ignoring property condition. Many Memphis properties are older and may require significant repairs. DSCR lenders expect rent‑ready condition; failing to account for renovation costs can delay closings or reduce loan amounts.
- Overleveraging in declining neighborhoods. Neighborhoods like South Memphis and Lamar have seen slower appreciation. Investors should ensure local employment and crime trends support long‑term value before using high leverage.
- Neglecting insurance costs. Memphis lies along the New Madrid seismic zone; some lenders require earthquake endorsements. Insurance and property taxes reduce NOI and DSCR.
- Noncompliance with rental licensing. Certain neighborhoods require landlord registration and property inspections. Failure to comply can result in fines and DSCR loan default.
DSCR loans vs. conventional mortgages
Conventional mortgages require personal income verification and debt‑to‑income calculations. They often feature lower rates but limit investors to about ten financed properties and may not allow LLC ownership. DSCR loans, by contrast, focus on rental income and allow unlimited properties under an entity. They require larger down payments and have higher rates, but they offer faster approvals and greater flexibility. The Federal Savings Bank notes that DSCR loans often require a “good” DSCR of 1.25 and that they are only for investment properties, not primary residences. Investors may choose conventional loans for primary residences or their first few rentals, then shift to DSCR financing to expand portfolios.
Who DSCR loans suit (and who they don’t)
DSCR loans are best for:
- Experienced investors seeking to acquire multiple rental properties beyond conventional loan limits.
- Self‑employed borrowers whose tax returns may not show enough income for conventional underwriting.
- Buy‑and‑hold investors purchasing 1–9 unit properties.
- Short‑term rental hosts operating in permitted areas.
They may not suit:
- First‑time investors without adequate cash reserves or credit history.
- Owner‑occupants, as DSCR loans require properties to be non‑owner‑occupied.
- Heavy fix‑and‑flip projects, which require bridge or rehab loans.
Memphis‑specific investing considerations
- Logistics and employment drivers. FedEx, International Paper and AutoZone support stable employment. Properties near these employers or the airport may benefit from steady rental demand.
- Higher property taxes. Shelby County property taxes are higher than many other Tennessee counties. Include taxes in DSCR calculations.
- Crime and tenant screening. Some Memphis neighborhoods have higher crime rates. Thorough tenant screening and security measures help protect cash flow.
- Flood and seismic risk. Memphis is near the Mississippi River and the New Madrid seismic zone. Flood and earthquake insurance may be required.
- Historic districts. Downtown neighborhoods may have historic preservation guidelines that limit renovations. Investors should verify property restrictions.
Conclusion
Memphis offers some of the most affordable real estate among major U.S. cities and the potential for attractive cash‑on‑cash returns. DSCR loans enable investors to leverage rental income rather than personal earnings, making it easier to buy and finance multiple properties. Among the lenders examined, SelectHomeLoans.com distinguishes itself with flexible underwriting, competitive terms and strong local expertise. Whether you’re investing in Midtown, Cordova or Frayser, understanding DSCR lending and partnering with a knowledgeable lender can help you build a profitable Memphis rental portfolio.
