Owner financing in Tennessee: a guide for the seller who carries the note
If you sold Tennessee property and carried the note, it is most likely secured by a deed of trust with a power of sale. Tennessee sets the notice for a trustee's sale, taxes the debt when the deed of trust is recorded, and gives individual sellers a licensing exemption with a count attached.
Foreclosure under a deed of trust
Tennessee deeds of trust are normally foreclosed outside court under the power of sale. Notice of the sale is published, with the first publication at least 20 days before the sale, and a copy goes to the debtor (T.C.A. § 35-5-101). The notice rules were amended in 2025 (Public Chapter 515, effective July 1, 2025), which added an internet posting requirement to newspaper publication, so follow the current text.
A default notice and a sale both start from what the buyer actually owes. That number comes from your record of every payment and how it was applied.
The indebtedness tax at recording
Recording a deed of trust triggers Tennessee's tax on the indebtedness it secures: 11.5 cents per 100 dollars of debt, with the first 2,000 dollars exempt, owed by the borrower (T.C.A. § 67-4-409(b)). Your closing agent normally collects it.
Licensing
Tennessee's residential lending law exempts a seller financing a sale to an immediate family member, a seller financing the home that was their own residence, and a person making five or fewer residential mortgage loans in any 12 consecutive months who does not hold out as being in the lending business (T.C.A. § 45-13-201(b)(1)). A sixth loan in that window loses the last exemption.
Federal rules count seller-financed sales separately; see RMLO licensing thresholds and the de minimis exemption.
The record every Tennessee seller needs
Whatever the structure, the rules above all lean on the same thing: a complete record of every payment, the date it arrived, and how it was split between late fees, interest, principal and escrow. OwnerNote keeps that record. You log each payment as it arrives, and it applies every one the same way, keeps the balance current, produces payoff quotes good through any date, totals the year's interest, and prints statements for any period.
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