Rental property financing built on rental income.
A Alabama DSCR loan is a rental property mortgage sized on the rent, with no personal income documents. HUD puts the 2 bedroom Fair Market Rent for the Birmingham metro at $1,375 a month (HUD User). Pillar Mortgage Group (NMLS 2700076) arranges DSCR loans in Alabama up to $5 million.
Facts checked November 1, 2026. Not a commitment to lend.
DSCR loans by state
We lend DSCR in 35 states. Pick yours.
Pulled from state statutes, state agencies, the Census Bureau and FRED. Each row links to its source.
| Alabama fact | Value | Source |
|---|---|---|
| Security instrument | Mortgages; Alabama Code Title 35 Chapter 10 Article 1A covers foreclosure by power of sale (nonjudicial) for mortgages executed after Dec 31, 1988 | law.justia.com |
| Foreclosure | Mortgages; Alabama Code Title 35 Chapter 10 Article 1A covers foreclosure by power of sale (nonjudicial) for mortgages executed after Dec 31, 1988 | law.justia.com |
| Security deposit | 1 month's periodic rent (exceptions for pets, alterations, increased liability risk) | Ala. Code § 35-9A-201 |
| Notice for unpaid rent | 7 business days after receipt of written notice | Ala. Code § 35-9A-421(b) |
| Rent control | Preempted | alison.legislature.state.al.us |
| LLC formation fee | $200 (Secretary of State domestic LLC filing) | sos.alabama.gov |
| Median listing price | $325,000 in September 2026 ($329,973 in September 2025) | Realtor.com via FRED |
| HUD 2 bedroom Fair Market Rent | $1,375, The Birmingham metro | HUD User |
Full walk through: how DSCR is calculated.
What PMG can place for a Alabama rental, in short.
Loan amount
Up to $5M
Credit
660 and up
Down
20 to 25%
Vesting
LLC ok
Guidelines summarized; subject to program terms, property and borrower eligibility. Not a commitment to lend. Compare with typical DSCR programs.
Rent is the number that qualifies a DSCR loan, so start with what Alabama rentals actually command.
Median listing price
$325,000
September 2026, down 1.5% from $329,973 in September 2025
Quick math (computed from the figures above): At the Alabama median listing price of $325,000, 25% down is $81,250 and the loan is $243,750. A year of rent at the Fair Market Rent for the Birmingham metro ($1,375) is $16,500, or 5.1% of that price. A year of rent at the Fair Market Rent for the Huntsville metro ($1,341) is $16,092, or 5.0% of that price.
Fair Market Rent is a HUD benchmark, not an appraisal.
The rent field starts at the HUD 2 bedroom Fair Market Rent for the Birmingham metro. HUD also lists the Birmingham metro at $1,375 and the Huntsville metro at $1,341. Swap in your lease or appraisal rent, then add your quoted rate. For a price reference, the median Alabama listing was $325,000 in September 2026.
See how a rental's income stacks up against its full monthly payment. Your numbers stay in your browser.
Enter rent, price and your quoted rate to see your DSCR.
Loan amount (L) = Price × (100 minus Down %) ÷ 100
P&I (30 year fixed) = L × r × (1 + r)^360 ÷ ((1 + r)^360 minus 1), where r = annual rate ÷ 100 ÷ 12
P&I (40 year interest only) = L × r
PITIA = P&I + Tax ÷ 12 + Insurance ÷ 12 + HOA
DSCR = Monthly rent ÷ PITIA
Rent needed for a target DSCR = Target × PITIA
Estimates only. Not a loan offer. Rates and terms vary by lender, property and borrower. Company NMLS #2700076. Example values are illustrations, not a quote.
Hypothetical PITIA of $1,775 (P&I $1,400, taxes $250, insurance $125), real Alabama rents. Not a quote or a rate.
0.77DSCR
$1,375 / $1,775 = 0.77: fits programs down to 0.50.
0.76DSCR
$1,341 / $1,775 = 0.76: fits programs down to 0.50.
Share the deal and we will run the ratio, compare lenders and lay out your options in plain numbers.
Investors from any state can buy in Alabama.
No commitment · Under 2 minutes
We will reach out shortly to run your numbers.
Most Alabama DSCR deals land in these markets. Check the city rules before you buy.
City rules change. Confirm with the city and your HOA before you buy, and ask us how your lender counts short term rental income.
Know the Alabama landlord rules before you close. They shape your lease, your deposit and how fast you can act on unpaid rent.
| Topic | The rule | Citation |
|---|---|---|
| Security deposit cap | 1 month's periodic rent (exceptions for pets, alterations, increased liability risk) | Ala. Code § 35-9A-201 |
| Deposit return deadline | 60 days after termination of tenancy and delivery of possession | Ala. Code § 35-9A-201 |
| Nonpayment notice | 7 business days after receipt of written notice | Ala. Code § 35-9A-421(b) |
| Month to month notice | 30 days before the periodic rental date specified in the notice | Ala. Code § 35-9A-441(b) |
| Rent control | Preempted. A local governmental unit (county, city, town or municipality) may not enact, maintain or enforce an ordinance, resolution or rule that would control the amount of rent charged for leasing private property. | alison.legislature.state.al.us |
Not legal advice.
Taxes go straight into PITIA, so they move your ratio. Budget for the investor rate, since rentals usually do not get homestead treatment.
What to expect at the closing table in Alabama, from the instrument you sign to the taxes on transfer.
What it costs to form and keep an LLC in good standing with the Alabama Secretary of State.
Check each of these on any Alabama rental you plan to finance.
Documents: contract, lease or rent schedule, bank statements, LLC papers, insurance quote. No tax returns. Details.
Alabama is highlighted. We also lend DSCR in Mississippi, Tennessee and Georgia next door, and in 30 more states. Tap a gold state to open its guide.
Straight answers for investors buying or refinancing rentals in Alabama.
PMG guidelines summarized; subject to program terms, property and borrower eligibility. Not a commitment to lend.
Book a free callInvesting across state lines? We lend DSCR in these neighbors of Alabama too.
Primary sources, each with the date checked. PMG program facts come from Pillar Mortgage Group.
Send the Alabama property and rent. We run the ratio and lay out terms before you offer.
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Pillar Mortgage Group, LLC is an Equal Housing Lender, doing business in accordance with the Fair Housing Act and Equal Credit Opportunity Act. Not a commitment to lend.
Company NMLS# 2700076 | Arizona License MB-2009671 | View NMLS Consumer Access