Tennessee House Bill HB0908

Tennessee 2025-2026 Regular Session

• Introduced: 2/4/25
• Refer: 2/6/25
• Refer: 2/19/25
• Refer: 2/26/25
• Engrossed: 3/4/25
• Enrolled: 4/8/25
• Passed: 4/24/25
• Chaptered: 4/28/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 45 and Title 47, relative to interest on home loans.

Summary

HB0908 revises Tennessee’s statutory cap on the effective interest rate for home loans. Under current law, the maximum rate is tied to a benchmark formula; this bill keeps that structure but sets the ceiling at four percentage points above the average prime offer rate for a 30-year fixed loan, as published by the federal financial institutions examination council or its successor. The bill also adds an absolute cap, providing that the effective annual rate on home loans may not exceed 18%. The measure applies to Tennessee home loans and updates Tennessee Code Annotated, Section 47-15-102, within Titles 45 and 47. It takes effect July 1, 2025, and therefore changes the legal framework lenders must use when pricing covered home loans after that date. In practical terms, it affects mortgage and home-loan interest calculations, lender compliance practices, and borrowers seeking residential financing.

Impact

The bill amends Tennessee’s home-loan interest-rate statute by replacing the existing maximum-rate language with a benchmark-based formula tied to the federal average prime offer rate, while also imposing a hard 18% annual ceiling. This changes the legal standard for permissible interest on home loans in Tennessee and may affect lenders, mortgage brokers, and consumers by clarifying the upper limit on rates for covered loans.

Sentiment

The bill appears to have been broadly supported in the House and ultimately enacted, with unanimous or near-unanimous committee and floor support in the House and a favorable final Senate vote. The recorded votes suggest the measure was generally noncontroversial and viewed as a technical or consumer-finance adjustment rather than a divisive policy change.

Contention

There is little evidence of substantive opposition in the available record. The only notable procedural resistance appears in the Senate motion to recall the bill from the Senate calendar, which failed 23-70, indicating some disagreement over timing or procedure rather than the substance of the home-loan interest-rate change. No committee transcript is available showing specific policy objections.