Tennessee · owner financing
Tennessee owner financing, explained.
A plain-English guide to owner financing (also called seller financing) in Tennessee — statute, recording, default remedies, interest caps, and where deals actually happen.
Tenn. Code Ann. § 66-24-101 et seq. (recording); common law; no dedicated CFD statute
Recording with county Register of Deeds permitted under Tenn. Code Ann. § 66-24-101; not strictly mandated but unrecorded contracts subordinate to BFPs.
Hybrid trending toward foreclosure. Tennessee courts have held that CFDs may be treated as equitable mortgages where buyer has acquired substantial equity, requiring foreclosure rather than forfeiture. Forfeiture remedies subject to equitable scrutiny.
Is owner financing legal in Tennessee?
Tennessee recognizes 'contracts for deed' / 'installment land contracts' under common law as a form of seller financing.
How do you record a owner financing agreement in Tennessee?
Recording with county Register of Deeds permitted under Tenn. Code Ann. § 66-24-101; not strictly mandated but unrecorded contracts subordinate to BFPs.
What happens if the buyer defaults?
Hybrid trending toward foreclosure. Tennessee courts have held that CFDs may be treated as equitable mortgages where buyer has acquired substantial equity, requiring foreclosure rather than forfeiture. Forfeiture remedies subject to equitable scrutiny.
What is the maximum interest rate?
10% if no written agreement; up to formula rate equal to 4% above weekly average prime loan rate or 24%, whichever is less (Tenn. Code Ann. § 47-14-103); commercial generally exempt.
What disclosures are required?
Tennessee Residential Property Condition Disclosure required for 1-4 family residential (Tenn. Code Ann. § 66-5-201 et seq.); lead-based paint (federal).
Who's protected — buyer vs. seller
Buyer protections
Equitable mortgage treatment where applicable; statutory residential disclosure; courts disfavor forfeiture of substantial equity.
Seller protections
Forfeiture available where buyer has minimal equity; ejectment via detainer action; retention of payments.
Where in the state do these deals happen?
Rural East Tennessee land and Appalachian properties; West Tennessee farmland; Memphis and Nashville inner-city residential historically.
Tennessee cities
Per-city market notes for owner financing buyers and sellers.
Notable case law
McLemore v. Charleston & Memphis R.R., 111 Tenn. 639 (1903); Williamson v. Bishop, 1991 Tenn. App. LEXIS 425.
Looking at a Tennessee deal?
Send the parcel and the terms — we'll walk through whether owner financing fits, how to record it, and what the cure period looks like if things go sideways.
Talk to WyattEducational content only. Statute citations are public-record research, not legal advice. Tennessee contracts and remedies are fact-specific — consult a licensed Tennessee real-estate attorney before signing anything.