Bank Statement Loans in Tennessee

Why Bank Statement Loans Matter in Tennessee’s Market

Tennessee home prices sit below the national average, and with no state income tax, more of what you earn stays in your pocket. For self-employed borrowers, though, that affordability can still feel out of reach, because conventional loans are built around W-2 employees and penalize business owners and contractors who write off expenses on their tax returns.

Here’s why bank statement loans make sense for self-employed borrowers in Tennessee:

• Tennessee has a deep self-employed and small-business base. The state is home to nearly 741,200 small businesses, which represent 99.5% of all businesses in Tennessee. Business owners and self-employed workers make up a meaningful share of the workforce, especially across construction, healthcare, logistics, and music and creative industries.
• Write-offs make qualifying harder than it should be. The same deductions that keep a Nashville contractor or small business owner profitable at tax time shrink the taxable income a conventional underwriter sees. IRS data shows that, nationally, sole proprietors report net income at roughly 20-23% of business receipts on average, well below the 50% of deposits Griffin Funding counts toward qualifying income by default. A profitable business owner can look underqualified on a tax return even when the deposits hitting their account each month tell a different story. A bank statement loan looks at real deposits instead of an adjusted tax figure.
• Affordable prices keep loan amounts accessible. With the average Tennessee home value around $339,643, which sits below the national figure, loan amounts and monthly carrying costs are more manageable here than in most states. A self-employed buyer with strong cash flow can comfortably support a payment once qualification is based on bank statements, rather than a tax return. 

Sources: Zillow home value data (June 2026), U.S. Small Business Administration Office of Advocacy, and IRS Statistics of Income (Nonfarm Sole Proprietorships, 2008-2015; SOI Bulletin, Spring 2025).

How Tennessee Bank Statement Loans Work

Business owners and contractors who write off expenses often show a taxable income far below what they actually earn. This tends to leave them underqualified on paper for conventional loans, even when their cash flow tells a different story.

Bank statement loans qualify you based on cash flow shown in bank statements, rather than traditional tax-return income.

Griffin Funding reviews 12 to 24 months of bank statements and calculates income from actual deposit history. The percentage of deposits that count toward your income depends on whether you use personal or business bank statements. Personal statements count 100% of deposits; business statements typically apply a 50% expense factor, which can go as low as 10% depending on your business type.

To qualify for a bank statement loan, you’ll need:

• Credit score: 620 minimum
• Self-employment history: 2 years minimum (or 1 year if you’ve stayed in the same industry)
• Down payment: 10% with a 680+ credit score; 20% minimum with a 620-679 score
• Bank statements: 12 or 24 months of personal or business statements showing consistent deposits
• Property types: Single-family homes, multi-family homes, townhomes, condos, manufactured homes, and rural properties are all eligible
• LLC ownership: Properties can be held in an LLC

Prior bankruptcy requires a two-year waiting period before applying.

View Bank Statement Loan Requirements

Today’s Bank Statement Mortgage Loan Rates in Tennessee

As a national direct-to-consumer lender, Griffin Funding cuts out the broker markup and keeps non-QM (non-qualified mortgage) rates competitive. Your specific rate depends on your credit score, down payment, loan amount, and buydown points.

Tennessee Housing Markets for Self-Employed Buyers

From the Nashville and Memphis metros with the most economic activity to affordable cities with music- and culture-driven communities, Tennessee has real options for self-employed buyers at every price point. Here’s where borrowers are buying across the state.

Major Metros

• Nashville: Tennessee’s capital and largest metro is driven by healthcare, the music and creative industries, advanced manufacturing, and higher education. Its diverse local economy gives self-employed borrowers in those sectors a deep and growing client base. Nashville is the highest price point on this page, which is where the gap between your tax returns and your deposit history decides whether you qualify.
• Memphis: Home to the FedEx World Hub and one of the largest logistics economies in the country, Memphis offers the second-lowest price point on this page, roughly half of Nashville’s. Its job base paired with low costs makes Memphis a strong fit for self-employed borrowers who want a major-metro client base without a major-metro mortgage. 
• Knoxville: A growing healthcare sector, the University of Tennessee, and steady population growth give self-employed buyers in healthcare, education, and services a stable, year-round client base to build a business around. A walkable downtown and easy access to the Smoky Mountains make Knoxville a place people move to and stay, which keeps that client base from turning over. It’s the third-highest price point on this page, so expect a deposit threshold above Chattanooga’s or Memphis’s.

Affordable Markets

• Jackson: Sitting between Memphis and Nashville, Jackson is a West Tennessee hub for distribution and manufacturing, giving self-employed borrowers and contractors in those sectors a solid local client base. It carries the lowest deposit requirement of any market on this page, which makes it the most reachable entry point for a newer business.
• Clarksville: Fort Campbell, just north of Clarksville on the Kentucky line, is home to over 30,000 active-duty soldiers along with their families. Service members rotate in and out on set schedules, which keeps movers, contractors, childcare providers, and other local service businesses in steady demand. That turnover, along with one of the fastest-growing populations among Tennessee cities, gives a self-employed buyer recurring work that shows up as deposit volume across a full 12 months. 
• Johnson City: East Tennessee State University and the Tri-Cities healthcare sector give borrowers in education, healthcare, and related services a dependable client base to build on. Johnson City also ranks among the more affordable markets on this page, third-lowest of the eight, so the deposit bar here sits below Clarksville’s and Chattanooga’s.

Lifestyle Markets

• Chattanooga: Chattanooga’s citywide gigabit fiber network earned it the nickname “Gig City” and put it on the map for remote workers, startups, and tech companies, making it a strong fit for location-independent self-employed buyers. A Volkswagen manufacturing presence and access to the Tennessee River Gorge round out an economy that isn’t built on one industry. When your clients are elsewhere, what qualifies you here is the deposit record your business already has.
• Sevierville: The Sevier County seat and gateway to the Great Smoky Mountains, Sevierville shares Gatlinburg and Pigeon Forge’s tourism-driven economy, giving self-employed buyers in hospitality, retail, and outdoor recreation a steady, visitor-driven client base. For location-flexible buyers, it pairs national park access with small-town character rather than resort-town crowds. It’s the second-highest price point on this page, so the Smokies come at a premium over Knoxville.

Free Tools for Self-Employed Borrowers in Tennessee

Run the numbers before you commit. These free tools give you an instant read on your buying power and the Tennessee market.

• Bank Statement Loan Calculator: Quickly estimate how much home you could afford with a Tennessee bank statement loan. 
• Bank Statement Loan Refinance Calculator: See how much you could potentially save using a bank statement refinance loan in Tennessee. 
• Home Affordability Calculator: Get a better idea of how much home you may be able to afford based on your financial profile and mortgage details. 
• Housing Market Insights: Explore estimated values, transaction history, and appreciation trends for properties across the state of Tennessee. 

Apply for a Bank Statement Home Loan in Tennessee

Self-employed borrowers with non-traditional income still have options to purchase property in Tennessee. With a bank statement home loan, you can qualify for up to $4.5 million in financing, no tax returns or pay stubs required. Down payments start at 10% for qualified borrowers.

Griffin Funding has helped self-employed borrowers, small business owners, freelancers, tradespeople, and independent contractors qualify for bank statement mortgage loans across Tennessee. We lend throughout the entire state, from Nashville and Memphis to Knoxville, Chattanooga, Clarksville, and the Smokies.

Reach out today to learn more about how to qualify for a mortgage in Tennessee if you’re self-employed. If you’re ready to get pre-approved and lock in your rate, get started now.

• Malik Abiola, Griffin Funding Tennessee Loan Officer | NMLS# 1877867
• Ryne Sweeney, Griffin Funding Tennessee Loan Officer | NMLS# 2415016
• Justin Guthrie, Griffin Funding Tennessee Loan Officer | NMLS# 2328091
• Guy Troxler, Griffin Funding Tennessee Loan Officer | NMLS# 1642169