Written & reviewed by Stephen A. Sobin, President of Select Commercial Funding LLC
Tennessee
Tennessee Apartment Loans
Select Commercial arranges Tennessee apartment loans from $1,500,000, up to 80% LTV, with rates as low as 5.67%. We compare Fannie Mae, Freddie Mac, FHA, bank and bridge programs to fit your property. For larger balances, see multifamily loans. See current rates on every loan type we offer.
Get a Free QuoteFinancing Options in Tennessee
Tennessee apartment, multifamily and commercial properties each have dedicated financing. Pick the page that matches your property:
Financing more of the state? See Tennessee commercial mortgages.
Financing in another state? Explore our apartment loans, multifamily loans and commercial mortgages nationwide.
Tennessee Apartment Loan Rates
Rates updated as of August 29, 2026
| Loan Type | Rate* | Max LTV |
|---|---|---|
| 5 Year Fixed | 6.07% | Up to 80% |
| 7 Year Fixed | 6.17% | Up to 80% |
| 10 Year Fixed | 6.25% | Up to 80% |
| Loan Type | Rate* | Max LTV |
|---|---|---|
| 5 Year Fixed | 5.67% | Up to 75% |
| 7 Year Fixed | 5.77% | Up to 75% |
| 10 Year Fixed | 5.85% | Up to 75% |
- Streamlined underwriting for institutional multifamily
- Cash-out refinances are acceptable
- Interest-only and non-recourse options
- Minimum 1.25x debt-service-coverage ratio
Rates last updated August 29, 2026. Rates and maximum LTV shown represent our best-case pricing scenarios. Actual rates, LTV, and loan terms are subject to underwriting approval and may vary.
Compare Tennessee Apartment Loan Programs
As a broker we compare every program for your best-fit Tennessee apartment financing:
| Program | Typical rate* | Max leverage | Best for |
|---|---|---|---|
| Fannie Mae Small Loan | 6.07% | Up to 80% | Non-recourse, fixed to 30 yrs |
| Freddie Mac SBL | 6.15% | Up to 80% | $2M to $10M small balance |
| FHA / HUD | 6.12% | Up to 85% | Highest leverage, longest term |
| Bank / portfolio | 6.25% | Up to 75% | Flexible, value-add |
| Bridge | 9.00% | Up to 80% LTC | Reposition, lease-up |
Most apartment lenders look for a debt-service-coverage ratio (DSCR) of at least 1.25x.
2026 Tennessee Apartment Loan Market
Tennessee’s two big apartment markets have opposite problems, and confusing them is the fastest way to misprice a deal here. Nashville has too much new supply. Memphis has almost none, and still the highest vacancy in the state.
Nashville is the concession capital of the country right now. Forty-seven percent of Nashville listings were offering at least one month free as of August 2026, up from 36% a year earlier, against a national figure near 30%. That is the direct consequence of one of the fastest per-capita apartment permitting paces in the nation, roughly 48,000 units permitted across the metro between 2020 and 2023 with a single-year peak near 15,000 in 2021. Vacancy has been falling steadily, from 11.8% a year ago to 10.3% in the second quarter of 2026 on an all-product basis, with quarterly absorption of 2,911 units. But 11,714 units are still under construction, about 6.5% of the metro’s 180,582-unit inventory, so the concessions are not finished yet. Asking rent held near $1,722 and essentially flat over the year.
Memphis is the mirror image. Vacancy of 14.5% in the second quarter is the highest of the major Tennessee markets, but only 823 units are under construction, less than 1% of inventory, and just 230 units delivered year to date. Memphis rents around $1,210 were up slightly over the year. This is not a supply problem and it will not be solved by the pipeline emptying, which means a lender underwrites a Memphis apartment building on its own operations and its own submarket rather than on a metro recovery thesis.
Knoxville sits between them, at 9.1% vacancy with 2,831 units under construction and asking rents near $1,549, up modestly over the year.
Across Tennessee we arrange apartment building loans from $1,500,000 through agency, bank, FHA and bridge programs. Rate and leverage follow the rent roll and the trailing twelve months of operating income, not your personal income.
Tennessee Markets We Finance
Four metros, four different underwriting conversations. What separates them is supply, and a Tennessee apartment mortgage gets structured to the metro rather than to the state.
Nashville
The largest and most heavily supplied apartment market in Tennessee, with 11,714 units under construction against a 180,582-unit inventory and nearly half of all listings offering free rent. Vacancy is falling, from 11.8% a year ago to 10.3%, and quarterly absorption of 2,911 units is genuinely strong. The important point for a borrower is that effective rent sits well below asking rent while concessions are running, and the lender sizes on collections. A stabilized Nashville apartment complex with concessions burned off borrows very differently from an identical building still buying traffic.
Nashville apartment loans · Nashville commercial · Clarksville
Memphis
The highest vacancy in the state at 14.5%, and almost no construction to blame for it, with 823 units under way against a 91,887-unit inventory. Memphis runs on logistics, distribution and healthcare employment, and its stock skews older and lower-basis than anywhere else in Tennessee. That makes the property condition report and a documented capital plan carry unusual weight, and it makes submarket selection matter more than the metro number. Regional banks, credit unions and the agency small-balance programs do most of the lending here.
Memphis apartment loans · Memphis commercial
Knoxville
The steadiest of the four, at 9.1% vacancy with asking rents near $1,549 and modest positive growth over the year, on 2,831 units under construction. University and healthcare employment anchors demand, and the market has neither Nashville’s supply overhang nor Memphis’s occupancy problem. Apartment building loans in Knoxville are frequently the most straightforward files we see in the state.
Chattanooga and the smaller markets
Chattanooga, Murfreesboro, Franklin, Johnson City and Jackson trade at a lower cost per unit with far less new construction competing against existing buildings. These are relationship markets where a local bank or credit union frequently beats a national lender on Tennessee apartment loan rates because they understand the collateral directly.
Where we do not yet have a dedicated apartment page for a Tennessee city, the link goes to our commercial mortgage page for that market, which covers apartment and mixed-use property alongside other commercial types.
Tennessee Assessment Ratios and Rent Rules
Check your assessment ratio before you underwrite anything. Tennessee assesses residential property at 25% of appraised value and commercial and industrial property at 40%. That difference is roughly 1.6 times, applied before the local rate, and it lands directly on your net operating income and therefore on your loan amount. Apartment buildings are generally treated as commercial-type property for assessment and are valued by the income approach, grouped with offices, warehouses and retail. Because the classification of a specific parcel is what governs, and because the difference is this large, confirm the ratio actually applied to your building with the county assessor rather than assuming. It is a five-minute call that can move a pro forma materially.
Reappraisal cycles vary by county. Tennessee counties reappraise on a six-year default cycle, or on a four-year cycle with state approval, or a five-year cycle with local approval. Davidson County, covering Nashville, and Hamilton County, covering Chattanooga, both run four-year cycles and both reappraised in 2025, which means their next reset is some years out and their current values already reflect recent market conditions. Cycles differ elsewhere in the state, so confirm where your county sits before assuming the tax line on a trailing operating statement will hold.
Tennessee prohibits local rent control outright. State law bars any local government from enacting or enforcing an ordinance controlling rent on private rental property, residential or commercial. The same statute also prevents localities from conditioning zoning approvals or permits on setting aside below-market units, though voluntary incentive programs remain permitted, and it gives owners a private right of action for violations. For a lender, that means nothing constrains projected rent growth by statute. Combined with the absence of a state income tax, Tennessee removes two variables that have to be modeled in most other states.
Refinancing a Tennessee Apartment Building
The right refinance answer in Tennessee depends almost entirely on which metro you are in, because the two big markets are not facing the same problem.
In Nashville, concessions are the whole conversation. With nearly half of listings offering free rent, your effective income is well below your rent roll, and the lender sizes on collections. Every quarter you hold occupancy without buying it back with concessions improves the trailing twelve that a lender will underwrite. For many Nashville owners the arithmetic favors a shorter-term bank or bridge structure now and permanent agency debt once the pipeline empties, rather than locking a smaller loan today against a concession-depressed operating statement.
In Memphis the calculation is different, because the vacancy is not going to be fixed by the pipeline emptying. Here a lender is underwriting your building and your submarket rather than a metro recovery. Owners who can document consistent occupancy, a stable expense line and a funded capital plan on older stock get materially better treatment than those who cannot, and waiting does not obviously help.
Everywhere, three documents do the work. The current rent roll and twelve months of operating statements set proceeds. Your assessment ratio and county reappraisal position tell you whether the tax line on that statement is the one the lender will use. And the note itself: confirm maturity and whether prepayment is yield maintenance, a step-down or open, then start six to nine months ahead of a balloon so there is room to shop more than one lender rather than accept an extension.
Send the rent roll and the trailing twelve and we will underwrite the building the way the lender will, then come back with written options inside 48 hours at no cost. Tennessee apartment loans start at $1,500,000, whether it is a twenty-four unit property in Memphis or a garden complex outside Nashville.
Tennessee Multifamily Financing
Apartment loan and multifamily loan are the same product: debt on a building with five or more residential units. We arrange it across Tennessee, from a small Knoxville walk-up to an institutional Nashville portfolio, and which term you use changes nothing about the underwriting.
Loan size changes the bidder list. Smaller Tennessee balances usually price best with regional banks, credit unions and the agency small-balance programs, where local knowledge and a clean rent roll carry the file. Larger balances open the field to Fannie Mae, Freddie Mac, FHA, life companies and CMBS, and multifamily loan rates there are frequently tighter because the loan is big enough to securitize, at the cost of a heavier package: full appraisal, property condition report, environmental review, and sizing driven by net operating income, debt service coverage and debt yield.
Tennessee multifamily lenders are watching the concession line in Nashville and the occupancy history everywhere else. Document both, confirm your assessment ratio, and the file moves. Send the rent roll and the trailing twelve months and we will tell you which multifamily lenders are sharpest on your property, and what multifamily financing looks like at that size.
Tennessee Apartment Loan Types We Serve
We arrange financing across Tennessee for:
- Urban high-rise apartment buildings
- Suburban garden apartment complexes
- Small apartment buildings with 5+ units
- Underlying cooperative apartment loans
- Portfolios of small apartment and rental properties
- Mixed-use and other multifamily property
Apartment Loans Across Tennessee
We arrange apartment loans throughout Tennessee, not only in the four largest metros. Murfreesboro, Franklin, Johnson City, Jackson and the smaller cities are financed through the same agency, bank and credit union programs, and a well-occupied building outside Nashville often supports more leverage than its owner expects.
For larger balances see our Tennessee multifamily loans. For office, retail, industrial and owner-occupied property see Tennessee commercial mortgages, and nationwide we lend in most major U.S. cities.
Recent Apartment Loan Closings
A sample of apartment and multifamily loans we have arranged for investors nationwide.
Other Property & Loan Types We Finance in Tennessee
As a full-service commercial mortgage broker, we arrange Tennessee financing across every major property and loan type:
We consider commercial loan requests of all sizes, beginning at $1,500,000.
What Our Clients Say
“I am a veterinarian who purchased an existing practice. I was surprised to find a company that offered 100% financing at a good rate, with great terms and rates for medical office financing.”
Carol K. · Chicago, IL“I spoke to several commercial lenders before finding Select Commercial. They got me a lower rate and their service was exceptional. If you need a multifamily loan, you need to talk to Stephen.”
Nathan B. · Philadelphia, PA“Select Commercial was very helpful with my multifamily mortgage. Stephen went over several options and we came up with the best lender to meet my needs. I got the funds and also lowered my payments.”
Gary M. · Portland, OR“Select Commercial offered 100% financing for my medical practice when my bank would have required 20% down. They delivered something my bank could not, and handled everything professionally.”
John C. · Boston, MAGet Your Tennessee Apartment Loan Quote
No cost, no obligation. Written answers within 48 hours on Tennessee apartment loans from $1,500,000.
- No application or processing fees
- Written answers within 48 hours
- For 5+ unit and commercial properties, $1.5M and up
Tennessee City Spotlights: 2026 Apartment Market Notes
Beyond the major metros, we finance apartment buildings across Tennessee. Current market notes for cities where borrowers ask us to lend:
- Knoxville: median 1-bedroom rent about $1,190, flat year over year (July 2026 rent report), a stable university-anchored market.
National baseline for context: the U.S. median rent was $1,388 in July 2026, down 1.1% year over year, with rental vacancy near 7.2% (national rent report, July 2026). Each city above links to our local commercial mortgage page, and we finance 5+ unit apartment properties in every Tennessee market from $1,500,000.