Nashville multifamily lending

Short answer: Stabilized 5–20 unit multifamily in Nashville trades at roughly 5.25%–6.25% cap rates — one of the tighter markets on this list — with +1.9% YoY rent growth supported by sustained in-migration. At the low cap end many deals fall below the 1.25 DSCR floor and need 70% LTV or a balance-sheet loan.

Nashville right now

Nashville is one of the tighter cap markets on this list — 5.25–6.25% — but it's also one of the few where rent growth (+1.9% YoY) is supported by sustained in-migration and a diversified employer base.

Why do low-cap Nashville deals miss the DSCR floor?

At a 5.5 cap and today's DSCR rates, an 8-unit Nashville deal underwrites to roughly 1.18–1.22 DSCR at 75% LTV — below the 1.25 floor. Most Nashville deals at the low cap end need either 70% LTV financing or a credit-union balance-sheet loan.

Where the inventory is

• East Nashville / Inglewood — 5.5–6.0%, gentrification continues.
• Madison / Donelson — 5.75–6.25%, bread-and-butter LO market.
• Antioch / South Nashville — 6.0–6.5%, value-add common.

Tennessee specifics

No state income tax, sales tax is high. Property tax is by appraised value × assessment ratio (40% for income-producing). Insurance has risen 11% YoY — lower than the deep south but rising.

PathIQ supports the TN assessment ratio so your year-2 tax line reflects the actual exposure.

Frequently asked questions

What are cap rates in Nashville right now?

Nashville is one of the tighter markets on this list, with stabilized 5–20 unit product trading around 5.25%–6.25%. East Nashville and Inglewood price at the low end, while Antioch and South Nashville run wider with value-add stories.

Why do so many Nashville deals fall below the DSCR floor?

At a 5.5 cap and current rates, an 8-unit deal underwrites to roughly 1.18–1.22 DSCR at 75% LTV — below the 1.25 floor. That's why low-cap Nashville deals often need 70% LTV financing or a credit-union balance-sheet loan to close.

How does Tennessee property tax work for multifamily?

Property tax is calculated as appraised value times the assessment ratio, and income-producing property is assessed at 40%. Tennessee has no state income tax, but sales tax is high, so model the 40% ratio in your year-2 tax line.

Is Nashville rent growth strong enough to underwrite?

Rent growth is about +1.9% YoY, supported by sustained in-migration and a diversified employer base — steadier than many peer metros. It's reasonable to underwrite modest, in-line growth rather than aggressive assumptions.