Tennessee
Tennessee VA IRRRL: Mind the Recordation Tax
Tennessee is one of the few states that taxes the new mortgage itself, and that changes the VA streamline math. Home Loans Inc is not licensed in Tennessee, so treat this as homework before you hire a local lender.
Home Loans Inc is not licensed in Tennessee and cannot take a Tennessee application. We lend in South Carolina, North Carolina, Virginia, West Virginia, Florida, Georgia, Alabama, Mississippi, Iowa and Wyoming.
Money first
The tax most states do not charge
Most states hit a refinance with recording fees and call it a day. Tennessee adds a recordation tax on the debt itself, often called the indebtedness tax. It runs $1.15 per $1,000 of principal above $2,000. The quick formula is the loan amount minus $2,000, times 0.00115, and that sits on top of the normal recording fees.
Why do I care so much? Because the VA streamline has a hard rule: the costs of the refinance must be recouped through monthly savings within 36 months. Every dollar of recordation tax goes into that cost pile. On a modest rate drop, Tennessee's tax can be the thing that pushes break-even past month 36 and kills the deal. Run it before you fall in love with a quote.
And the honest part. Home Loans Inc is not licensed in Tennessee. I cannot take your application there. This page is for education so you can hold a Tennessee licensed lender to the numbers.
Who signs, who closes
Tennessee closing mechanics
You pick the settlement agent
Tennessee refinances are handled by a title or escrow company, and since July 1, 2025 the borrower may choose the settlement agent. Use that. Get fee quotes from more than one.
Wet closings
Funds are wired at closing and held through the rescission window, then the old VA loan gets paid off.
The spouse question
On a marital residence, Tennessee generally has the non-owner spouse sign the deed of trust to release marital and homestead rights. The purchase-money exception does not apply to a refinance.
Confirm vesting
Your title underwriter decides exactly who signs. Ask early, especially if your spouse travels or is deployed.
Tennessee also runs its own net-tangible-benefit anti-flipping test over a 30-month window, and requires redisclosure at least one day before closing on high-cost loans. A clean VA streamline already has to show a benefit, so these mostly reinforce what VA demands. Tennessee uses non-judicial foreclosure. A prepayment penalty is unenforceable unless it is disclosed in 10-point bold type, and remote online notarization is generally available.
Fort Campbell and beyond
Where Tennessee VA borrowers cluster
Fort Campbell, home of the 101st Airborne Division, straddles the Kentucky line, but most of its people live on the Tennessee side around Clarksville. That corridor is the biggest source of VA loans in the state. Naval Support Activity Mid-South in Millington, near Memphis, houses Navy Personnel Command. Arnold Air Force Base in Tullahoma runs the Arnold Engineering Development Complex.
- Clarksville and the Fort Campbell corridor: a strong VA loan market with plenty of newer homes.
- Nashville metro: one of the fastest growing metros in the country.
- Memphis metro: affordable, with suburbs like Bartlett, Collierville and Germantown.
- Knoxville and East Tennessee: growing, with university influence.
- Chattanooga: a smaller metro with a growing tech presence.
For a purchase, location decides a lot. For a streamline, much less. VA usually does not order an appraisal on an IRRRL, so a house in rural Coffee County can refinance on roughly the same terms as one in Williamson County. The tax, the rate and the fees decide your deal.
VA's checklist
The streamline rules, Tennessee or not
- You already have a VA loan on the property. The IRRRL only refinances VA into VA.
- Wait until 210 days have passed since your first payment due date and you have made six payments. The later of the two controls.
- Show a net tangible benefit, like a lower rate or a fixed rate replacing an adjustable one.
- Certify that you lived in the home at some point. Soldiers who PCS out of Clarksville and keep the house as a rental can still streamline.
The funding fee is 0.5%, waived entirely if you receive VA disability compensation. Usually no appraisal and no income verification, though lenders can add overlays. Put the recordation tax, the funding fee and the lender fees in one column, your monthly savings in another, and divide. Under 36 months, keep going. Over it, stop.
Tennessee VA IRRRL questions
How much is the Tennessee mortgage tax on a VA streamline?
Tennessee charges a recordation tax of $1.15 per $1,000 of principal above $2,000. Roughly, take your new loan amount, subtract $2,000, and multiply by 0.00115. Recording fees are added on top. Count it as a closing cost when you check the 36-month recoup.
Can I choose my own title company in Tennessee?
Yes. Since July 1, 2025, a Tennessee borrower may choose the settlement agent on a refinance. Title or escrow companies handle these closings, and they close wet, with funds held through rescission. Shopping settlement fees can help your break-even math.
My spouse is not on title to our Tennessee home. Must they sign?
On a marital residence, generally yes. Tennessee usually has the non-owner spouse sign the deed of trust to release marital and homestead rights, and the purchase-money exception does not cover a refinance. Your title underwriter confirms what your closing needs.
Will Home Loans Inc refinance my Clarksville VA loan?
No. Home Loans Inc is not licensed in Tennessee and cannot take the application. This page is educational only. Bring the recordation tax math and the VA rules to a lender licensed in Tennessee and compare quotes.