Tennessee · Snapshot open-us-law v2026.08, retrieved 2026-09-17

Tenn. Code Ann. § 45-13-403: Payments to contractor from proceeds of mortgage loan for home improvement

(a) A licensed mortgage lender or mortgage loan broker shall not make any payments to a contractor or home improvement contractor from proceeds of a mortgage loan for home improvement other than: (1) In the form of an instrument that is payable to the borrower or jointly to the borrower and the contractor or home improvement contractor; or (2) At the election of the borrower by a third-party escrow agent in accordance with terms established in a written agreement signed by the borrower, the licensee and the contractor or home improvement contractor prior to the date of payment. (b) A licensed mortgage lender or mortgage loan broker shall not permit a contractor or home improvement contractor to be a cosigner or to act as a guarantor for a mortgage loan for home improvement. (c) As used in this section, "mortgage loan for home improvement" means a consumer credit mortgage loan transaction involving property located within this state regardless of the amount of the loan. (d) The commissioner is authorized to impose a civil penalty in an amount not to exceed twenty-five thousand dollars ($25,000) for each violation of this section after notice and opportunity for a hearing. Acts 2009, ch. 499, § 8.
(a) A licensed mortgage lender or mortgage loan broker shall not make any payments to a contractor or home improvement contractor from proceeds of a mortgage loan for home improvement other than: (1) In the form of an instrument that is payable to the borrower or jointly to the borrower and the contractor or home improvement contractor; or (2) At the election of the borrower by a third-party escrow agent in accordance with terms established in a written agreement signed by the borrower, the licensee and the contractor or home improvement contractor prior to the date of payment.
(1) In the form of an instrument that is payable to the borrower or jointly to the borrower and the contractor or home improvement contractor; or
(2) At the election of the borrower by a third-party escrow agent in accordance with terms established in a written agreement signed by the borrower, the licensee and the contractor or home improvement contractor prior to the date of payment.
(b) A licensed mortgage lender or mortgage loan broker shall not permit a contractor or home improvement contractor to be a cosigner or to act as a guarantor for a mortgage loan for home improvement.
(c) As used in this section, "mortgage loan for home improvement" means a consumer credit mortgage loan transaction involving property located within this state regardless of the amount of the loan.
(d) The commissioner is authorized to impose a civil penalty in an amount not to exceed twenty-five thousand dollars ($25,000) for each violation of this section after notice and opportunity for a hearing.

Where this section sits in the code

TN Code
Title 45
Chapter 13

(1) In the form of an instrument that is payable to the borrower or jointly to the borrower and the contractor or home improvement contractor; or

(2) At the election of the borrower by a third-party escrow agent in accordance with terms established in a written agreement signed by the borrower, the licensee and the contractor or home improvement contractor prior to the date of payment.

(b) A licensed mortgage lender or mortgage loan broker shall not permit a contractor or home improvement contractor to be a cosigner or to act as a guarantor for a mortgage loan for home improvement.

(c) As used in this section, "mortgage loan for home improvement" means a consumer credit mortgage loan transaction involving property located within this state regardless of the amount of the loan.

(d) The commissioner is authorized to impose a civil penalty in an amount not to exceed twenty-five thousand dollars ($25,000) for each violation of this section after notice and opportunity for a hearing.

Collected 2026-09-17T21:51:56Z. Source file · JSON

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