New Construction Loans in Tennessee

From the foundation up, we’re by your side!

Ready to kick off your new construction project? BNB Lending offers fast, flexible financing with 1 to 2-year interest-only terms to help you get the job done efficiently. We provide funding for residential properties (1 to 4 units), multi-family units, condos, apartment complexes, commercial buildings, and hotel construction projects. Our financing covers up to 85% of the purchase price and 100% of vertical construction costs, ensuring your project is ready for rent or sale. Plus, with no prepayment penalties, you can refinance or sell whenever you're ready. Our quick closing process means you can get quoted and funded in as little as 14 days.

GET A QUOTE

How to qualify

To obtain a quote, we will need the following information:

Property Value and

 Purchase Price


Down Payment

Amount


Credit Score

 Asset Types

  • Single Family Homes
  • Townhomes
  • Condos
  • 2 - 4 Units (Duplex, Triplex, Quadplex)
  • Multi-Family: 5 - 8 Units
  • Mixed-Use: 2 - 8 Units
  • Multi-Family: 9+ Unit


Loan Terms

  • Loan Sizes: $100k up to $3.5 Million (Larger loan sizes available on a case by case basis)
  • Purchase LTV: Up to 85%
  • Rate & Term Refinance LTV: Up to 80% 
  • Cash Out Refinance LTV: Up to 80%
  • Amortization: 30 Year % 40 Year Amortization Options Available
  • Term Lengths: 5/6 ARMs, 7/6 ARMs, 10 Year Interest Only, 30 Year Fixed & 40 Year Fixed
  • Floor Rate: 5.50% (subject to change daily due to market volatility)
  • Full Recourse with personal guarantee required for all borrowers with majority ownership (typically 20%+ or 25%+ if closing in an Entity)
  • DSCR Requirement: 1.00x or greater depending on loan size and property type. Sub-1.00x DSCR and NO DSCR options available.
  • Vesting: Lending to Individuals, LLCs, and Corporations. Trusts Allowable on a Case by Case Basis.
  • Average Time to Close: 14 to 35 days

Wondering if you qualify for investment property financing in your area?


We offer lending services in all 50 states!

FIND OUT MORE

Frequently Asked Questions

What are the requirements for getting a construction loan?

To qualify for a construction loan, you need building permits, architectural plans, a licensed contractor, and a complete budget. Lenders also expect a credit score of at least 660 and a down payment of 15%–20%. Land ownership or a signed contract is required. BNB Lending disburses funds in draws linked to construction milestones. We also assess builder experience, reserves, and your exit strategy. Well-documented deals tend to close faster and receive more favorable terms. We focus on funding solid plans—not just paper qualifications.

How do home construction loans differ from traditional financing options?

Home construction loans fund your project in stages and only require interest payments during the build. Traditional loans fund in full at closing and start amortizing immediately. Construction financing is underwritten based on builder qualifications, permits, and project scope—not just your personal income or W-2s. Once construction is complete, most borrowers refinance into a DSCR loan or long-term mortgage. This staged model gives you more financial control, especially when managing timelines for STRs or investment properties.

What credit score is needed to qualify for new construction financing?

A 660 credit score is standard for most construction loans, but that’s not the only factor we consider. Strong builder history, a well-structured draw schedule, and good liquidity can offset a borderline score. If your credit isn’t perfect but your documents are organized, we may still approve your deal. At BNB Lending, we prioritize execution potential over conventional borrower profiles. The more solid your plan, the faster—and more affordably—we can help you get funded.

Are construction loans available to small business owners or just individuals?

Construction loans are available to small business owners, LLCs, and corporations—not just individuals. Most of our borrowers are STR investors or developers who operate through a business entity. A personal guarantor with 20–25% ownership is typically required. We underwrite based on the project—not on W-2s or tax returns. Whether you're building one rental cabin or scaling your portfolio across markets, we offer phased financing with terms tailored to real estate professionals.

What is the typical loan rate for construction financing?

Construction loan rates start around 5.50% and adjust based on credit, project type, and builder strength. These loans are interest-only during construction, which keeps your early-stage costs down. After completion, borrowers often refinance into DSCR or long-term mortgage products. Rates are determined by risk, documentation quality, and deal structure. We move fast when your project is organized—and that often leads to better pricing and faster closings. Our goal is speed without sacrificing clarity or flexibility.

What types of loans are best for new construction projects in Tennessee?

The best loans for new construction projects in Tennessee are draw-based, interest-only loans that disburse as your project progresses. Whether you're building STR cabins in Gatlinburg, duplexes in Nashville, or small multifamily projects in Memphis, we finance up to 85% of land value and 100% of vertical costs. Once completed, borrowers typically refinance into DSCR or traditional mortgages. Our Tennessee loan programs are designed for fast approvals, flexible structures, and minimal documentation—helping you build quickly and grow confidently.

Explore new construction loans and other Airbnb loans in neighboring states like Virginia , North Carolina , Georgia , Alabama , Mississippi , Arkansas , and Missouri to pursue more opportunities beyond Tennessee.