Alabama Bridge Loan Program

Last Updated: April 17, 2025

At OfferMarket, our goal is to empower you to forge wealth through savvy real estate investments in Alabama. We’ve built a vertically integrated platform that provides you with every tool you need on your investment journey, including:

• Private capital lending
• Insurance rate comparisons
• Exclusive access to off-market Alabama properties

Our Alabama Bridge Loan Program is tailored to deliver fast, reliable, and affordable financing to help you acquire and enhance 1‑4 unit residential investment properties across the Heart of Dixie. Whether your plan is to quickly flip a property for profit or convert it into a rental asset with a DSCR refinance, we’re committed to partnering with you on your success.

What Is a Bridge Loan in Alabama?

A bridge loan is a temporary financing solution designed to fill the gap until you secure a longer‑term funding alternative. In the Alabama market, these loans are particularly useful for scenarios such as:

• Acquisition & Rehabilitation: Purchase a distressed or outdated property and renovate it—preserving cash for future opportunities.

• Cash Purchase Refinance: Buy a property off-market with a cash offer (often needed for fast closings) and then refinance to recoup equity and fund its improvements.

• Loan Replacement: Swap out an existing loan on a property that still needs repair, giving you additional time and funds to finish renovations.

• As‑Is Purchases: Acquire properties below market value with no intention of upgrading them—reselling “as‑is” for a profit.

• Equity Extraction: Refinance a cash purchase with no renovations planned, allowing you to leverage existing equity for your next Alabama venture.

• Extended Rehab Financing: Refinance an existing bridge loan once major renovations are complete, providing extra time to either sell or convert to a long‑term rental loan.

Often referred to as “hard money” or “fix and flip” loans, these financing options are versatile and widely used by Alabama’s real estate investors.

How It Works

A bridge loan for Alabama properties is typically structured with two main components:

Initial Advance

This portion of the loan directly covers the purchase price and is wired to the title company at settlement.

Construction Holdback

This part is earmarked for renovation expenses and is disbursed to you in stages as you meet predetermined draw requirements.

Flexibility is at the heart of our design: you can choose to receive both components to maximize leverage, or opt solely for an initial advance if you plan to self‑fund repairs. Many seasoned investors in Alabama blend both options, while others—especially those acquiring cash deals—use only the holdback to complete necessary improvements.

Your exit strategy is equally flexible. You might decide to flip the property immediately upon completion or rent it out and refinance into a DSCR loan. And if market conditions change, it’s perfectly acceptable to pivot—from a BRRRR (Buy, Rehab, Rent, Refinance, Repeat) model to an outright sale if resale valuations look particularly attractive.

Who Leverages Alabama Bridge Loans?

The program is designed for:

• Fix and Flip Investors: Those looking to purchase, renovate, and quickly sell properties for a profit.

• Rental Investors Using the BRRRR Method: Investors who acquire properties, update them, rent them out, and then refinance to free up capital.

It’s common in Alabama for investors to mix these strategies—flipping some properties while holding onto others as long‑term rentals to capitalize on changing market dynamics.

Program Guidelines

Below is an overview of our bridge loan criteria designed exclusively for the Alabama market:

Managing Risk in the Alabama Market

At OfferMarket, we’re dedicated to ensuring your success while safeguarding your investments. Less than 0.5% of our loans have ever defaulted, and we work closely with you to maintain that record by emphasizing responsible lending.

High‑risk projects—typically those with extensive or complicated rehabilitation requirements—tend to have a higher chance of delays, cost overruns, and unexpected market shifts. These challenges are especially pertinent in Alabama’s diverse markets, where weather and local regulations can further complicate projects. Our role is to serve not only as your lender but also as your deal advisor and risk manager, setting realistic expectations every step of the way.

Determining the Initial Advance

The initial advance is based on a combination of your personal experience and the specifics of your deal. We consider factors such as:

• The number of investment properties you’ve owned over the past 24 months

• The number of verifiable rehab projects completed over the last 5 years

• A minimum credit score of 680 (with a strong preference for 720+)

• Professional credentials (e.g., if you’re a licensed Realtor, General Contractor, or Professional Engineer)

If the purchase price is higher than what our appraisal (or in‑house valuation) determines as the current “as‑is” value, the advance is capped by that lower value.

Your exit strategy also influences the initial advance. For properties you plan to sell, we typically look for a projected gross margin of at least 30% and a minimum profit of $15,000. For rental conversions or refinance scenarios, a post‑rehab DSCR of at least 1.1 is required. Projects in rural parts of Alabama may be subject to additional experience requirements and a lower initial advance.

Experience-Based Tiers

We assess your experience using our tier system based on verifiable project history:

Initial Advance by Tier

Adjustments to the Initial Advance

Depending on specific risk factors, adjustments may be made:

Rehab Scope Classification & Eligibility

Definition of Rehab Scope

• Light Rehab: Renovation costs are less than 25% of the purchase price

• Moderate Rehab: Costs range from 25% to 49.99% of the purchase price

• Heavy Rehab: Costs range from 50% to 99.99% of the purchase price

• Extensive Rehab: Costs equal or exceed 100% of the purchase price, typical of additions, expansions, or low purchase price “lopsided deals”

  Eligibility Based on Rehab Scope

LTARV Limits (Loan-to-After-Repair Value)

LTFC Limits (Loan-to-Full-Cost)

For projects with an Extensive Rehab scope—where the rehab budget exceeds the purchase price or as‑is value—we use the Loan-to-Full‑Cost (LTFC) measure. For example, an LTFC of 85% means we fund 85% of the combined project cost, with you contributing the remaining 15%.

Practical Examples

Example: No Experience

• Purchase Price: $150,000

• Tier: 1 (no verified projects)

• Credit Score: 695

• Rehab Budget: $36,000

• ARV: $225,000

• Initial Advance: $112,500 (75% of purchase price)

• Construction Holdback: $36,000

• Total Loan Amount: $148,500

• LTARV: ~66%

• LTFC: ~80%

• Interest Accrual: Full accrual

  Example: No Experience, Excellent Credit

• Purchase Price: $150,000

• Tier: 1

• Credit Score: 750

• Rehab Budget: $36,000

• ARV: $225,000

• Initial Advance: $120,000 (80% of purchase price)

• Construction Holdback: $36,000

• Total Loan Amount: $156,000

• LTARV: ~69.3%

• LTFC: ~83.9%

• Interest Accrual: As funds are disbursed

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  Example: With 5 Verified Projects

• Purchase Price: $150,000

• Tier: 4 (5 projects)

• Credit Score: 750

• Rehab Budget: $30,000

• ARV: $225,000

• Initial Advance: $135,000 (90% of purchase price)

• Construction Holdback: $30,000

• Total Loan Amount: $165,000

• LTARV: ~73.3%

• LTFC: ~91.7%

• Interest Accrual: As funds are disbursed

Refinancing Using “As Is” Value Instead of Cost Basis

Our standard underwriting is based on your cost basis (the purchase price plus sunk costs) to ensure you retain “skin in the game.” However, if you have a seasoned Alabama property with an “as is” value that exceeds your cost basis—and you need financing to fund renovations—we may consider leveraging the higher value. Requirements include:

• The property must be livable—at least in C4 condition—and should not have any major structural or safety issues.

• You need to have owned the property for at least three years.

• If you're paying off an existing loan, the lender can’t be a bridge or construction lender, and there shouldn’t be any default interest, late fees, or extension charges involved.

• Your credit score must be at least 680.

• You should fall into Experience Tier 3 or higher, meaning you’ve completed at least four similar, verifiable rehab projects.

• You’ll need to show clear evidence that the property's current value is greater than your investment—supported by recent comparable sales in the neighborhood.

• Your scenario should make sense—for instance, if you rented the property for a few years, the tenants have moved out, and now you're planning to renovate and sell.

Transactions Involving Wholesalers and Price Increases

If you acquire a property through a wholesaler, the assignment fee or double‑close price run‑up can sometimes be financed—as long as it does not exceed 20% of the wholesaler’s original purchase price. Any amount above that threshold will need to be covered out of pocket. For instance:

• A‑B Contract (from owner/wholesaler): $150,000

• B‑C Contract (assignment fee): $37,500

• As Is Value: $187,500

• Value Basis for Initial Advance: $180,000

Guidelines for wholesaler transactions include:
• Assignment fees or price run‑ups are financed up to 20% of the purchase price.
• Transactions must be conducted at arm’s length, with full contract documentation required.
• Finder or referral fees are not eligible for financing.

Construction Holdback & Draw Processing

The construction holdback funds are released to you based on draw requests tied to verified progress on your renovation. If you choose to self‑fund the repairs, you can opt out of the construction holdback entirely. Notably, for loans of $100,000 or more, undrawn funds do not accrue interest (“as disbursed” method).

Draw Guidelines:

Appraisal & Valuation Requirements

In‑House Valuation Guidelines

If you meet specific criteria, we may offer the option to use an in‑house valuation instead of a traditional third‑party appraisal. To qualify, all of the following must apply:

Even if you meet these standards, we may still request a formal interior or exterior appraisal depending on the specifics of your deal. That determination is made at our discretion.

When Exterior Appraisals Are Accepted

An exterior‑only appraisal is allowed for certain property acquisitions, including:

• Real estate owned (REO) transactions
• Properties bought through foreclosure auctions
• Sheriff’s sales
• Online auction purchases
• Bankruptcy‑related property sales

These appraisals must be no older than 120 days from your closing date. If the report is between 120 and 179 days old, a recertification will be required to proceed.

When a Full Interior Appraisal Is Required

If your scenario doesn’t meet the conditions for either an in‑house or exterior valuation, you’ll need a full interior appraisal. Appraisal requirements by property type are outlined below:

Unless you're transferring an existing appraisal (explained next), we’ll order your appraisal through one of our trusted appraisal management companies (AMCs). You’ll be responsible for paying the AMC invoice. If payment is delayed, your loan file will be placed on hold until it’s resolved.

Transferring an Existing Appraisal

We may accept an appraisal you’ve already commissioned, provided it meets all of the following conditions:

• The appraisal was ordered through a pre‑approved AMC

• It is no more than 180 days old at the time of your closing

• If the report is between 120–179 days old, it must be recertified

• The original lender must send us:

  • A signed transfer letter confirming compliance with the Appraiser Independence Requirements (AIR)

  • The full PDF appraisal report

  • The XML file version of the appraisal

  • A copy of the paid invoice proving the appraisal has been settled

Meeting all these requirements will help avoid delays and keep your loan moving forward.

Scenario: Stabilized Bridge Loan in Alabama

For properties in excellent condition (C4 or better) with minimal deferred repairs, we can fund up to 75% of the “as‑is” value without needing a full rehab draw. This “stabilized” product is ideal if the property is ready for sale or immediate rental.

Key Loan Details for Alabama

*For loans over $1M, additional guidelines apply.

Extensions: Keeping Your Project on Track

Bridge loans are intended as short‑term financing solutions (typically 12 to 24 months). If your project isn’t completed in time, you can extend your loan—but these extensions come with added fees and interest. To avoid extensions, focus on:

• Working with experienced general contractors familiar with Alabama’s unique challenges
• Keeping your rehab scope manageable and efficient
• Securing immediate access to your property (avoid situations with lingering tenants or complex eviction processes)
• Building in a dual exit strategy—plan to sell or refinance based on current market conditions

Extension Limits

Extension Fee Schedule

*Extensions require confirmation that your builder’s risk insurance remains in effect throughout the extended period.

Ineligible Property Types

We do not fund projects involving:

• Mixed‑use developments

• Multifamily properties with 5 or more units

• Condotels and co‑ops

• Mobile or manufactured homes

• Commercial properties

• Cabins/log homes (unless designed and modernized)

• Properties subject to active oil/gas leases

• Working farms, ranches, orchards

• Vacation or seasonal rentals

• Properties accessible solely via unpaved or dirt roads

Exception Scenarios

We may accommodate exceptional circumstances on a case‑by‑case basis, including:

• Guarantor credit scores between 660 and 679

• Leasehold or ground rent arrangements

• Single‑family properties with 500 to 699 SQFT

• 2‑4 unit properties with any unit between 400 and 499 SQFT

• Situations where the initial advance is based on an “as is” value that exceeds the cost basis

• Non‑arms‑length transactions

• Financing of interest payments

Borrower & Guarantor Requirements

To qualify for an Alabama bridge loan, please note the following:

Verifying Liquidity

To ensure you're financially prepared for your project, we require that you—or one or more guarantors—have sufficient liquid assets to cover both your estimated cash to close and at least 25% of your rehab budget.

Acceptable Liquid Assets Include:

• Personal bank accounts

• Business accounts held in the borrowing entity's name

• Business accounts in other entities (with a copy of the operating agreement)

• Personal brokerage accounts

• Brokerage accounts tied to the borrowing entity

• Brokerage accounts in other businesses (again, with the appropriate documentation)

• Retirement accounts in your name (50% of the balance is countable due to withdrawal restrictions)

Important Note:
While you don’t need a separate business bank account, we recommend one for cleaner accounting and risk tracking. Outside of the required down payment (which will appear on your settlement statement and be wired by you at closing), you only need to verify control of your funds.

Credit and Background Review

We review your credit report and background to evaluate risk. Here’s how it works:

• If your tri‑merge report has three credit scores, we use the middle one.

• If it has two scores, we use the lower of the two.

• If you have no mortgage tradelines, we’ll require six months of interest reserves.

• If you have fewer than five tradelines total, the same six‑month reserve rule applies.

Additional Requirements Based on History:

• Bankruptcy: Must be discharged more than 4 years before the loan closes.

• Foreclosure: Must be completed over 4 years prior to settlement.

• If bankruptcy or foreclosure occurred between 4 and 7 years ago, we’ll need at least three months of reserves.

• Late mortgage payments in the last 12 months require a Letter of Explanation (LOE) and may result in denial.

• Any past‑due balances (mortgage or non‑mortgage accounts like HELOCs, credit cards, etc.) must be paid off before funding.

• Any involuntary liens or judgments (e.g., child support, tax liens) must also be paid in full.

• If you have pending civil lawsuits, submit an LOE—approval is at the loan committee’s discretion.

• Pending criminal cases, financial crimes, and serious criminal offenses make you ineligible for funding.

• Repeat offenses may be considered but require an LOE and are subject to case‑by‑case review.

By staying transparent and prepared, you’ll move through underwriting faster and with fewer surprises.

Interest Reserves & Financed Interest Payments

Interest Reserves:
These are funds held in escrow and applied toward your accrued interest before monthly payments are due.

Financed Interest Payments:
To preserve liquidity during rehab, your interest payments may roll into the final payoff amount rather than be paid monthly. For example, on a $150,000 loan at 12% held for 9 months:

• Total Loan Amount: $150,000

• Interest Rate: 12%

• Months Held to Payoff: 9

• Accrued Interest: $13,500 (calculated as $150,000 * 12% ÷ 12 months * 9 months)

Payoff Statement:

• Unpaid Principal Balance: $150,000

• Unpaid Interest: $13,500

Property Sourcing Guidelines for Bridge Loan Alabama

• New Markets: Transactions in emerging areas may require a General Contractor agreement or detailed justification for why one isn’t needed.

• Wholesale Deals: Additional documentation is necessary if there is a chain of assignments or noticeable price increases.

• Condos & Complex Projects: For properties requiring significant modifications, expect to provide architectural or engineering documentation.

Always include purchase contracts, settlement statements, payoff letters (if applicable), a record of your previous projects, and your entity’s formation documents.

Bridge Loan Insurance Guidelines

Protect your investment—and yourself—by insuring the property appropriately. Our insurance package, commonly known as Builders Risk or Fix and Flip insurance, covers properties under renovation, vacant homes, or those in less‑than‑optimal condition.

Required Coverages & Limits

Additional Coverage Details

💡 Pro Tip: As soon as you take possession of your Alabama property, install smoke detectors, secure locks, and consider adding security cameras. These precautions help meet insurance requirements and reduce the risk of denied claims.

Frequently Asked Questions

What Regions Do We Serve in Alabama?
OfferMarket exclusively funds bridge loans for properties across Alabama. Our expertise is in supporting Alabama real estate—whether you’re in Birmingham, Mobile, Montgomery, or even in smaller town communities.

Can I Hold Multiple Bridge Loans Simultaneously?
Yes, many of our Alabama clients manage more than one bridge loan concurrently. However, if we believe that your liquidity or project pace might be overstretched, we will advise you on risk management to ensure your long‑term success.

Are Bridge Loans Considered Commercial?
Indeed, since bridge loans are extended to your business entity (LLC or Corporation), they are classified as commercial, business‑purpose loans.

What Is the Minimum Loan Amount?
The minimum financing available is $25,000.

Which Property Types Are Eligible?
We finance non‑owner occupied residential properties with 1–4 units, including:
• Single‑family homes
• Duplexes, triplexes, and quadplexes
• Townhomes and warrantable condominiums

Properties with 5–9 units or large multifamily complexes, as well as non‑residential commercial properties, are not eligible under this program.

How Do You Calculate LTV?
For our bridge loans, LTV typically refers to LTARV (Loan‑to‑After‑Repair Value). Your initial advance is based on the lower of the “as‑is” value and the contract purchase price, while LTARV is calculated as the total loan amount divided by the property’s estimated market value post‑rehab.

What Are the Credit & Experience Requirements?
A minimum FICO score of 680 is required, with borrowers between 660–679 considered on an exception basis. While experience isn’t mandatory, completing verifiable rehab projects boosts your leverage under our tiered system.

Does Being a Wholesaler Count Toward Experience?
No. Wholesaling does not count as verifiable experience since the financial responsibility for rehabilitation is not assumed by the wholesaler.

What Documentation Is Required?

Our streamlined Loan File system requires documentation for both purchase and refinance transactions, including:

Purchase Transaction Requirements

Refinance Transactions

Are There Special Guidelines for Loans Over $1M?

Glossary of Key Terms

Get Your Instant Alabama Bridge Loan Quote

OfferMarket Capital LLC is proud to serve the Alabama real estate market with specialized bridge loans and DSCR financing for 1‑4 unit residential properties. Our mission is to help you build lasting wealth in Alabama, and we’re eager to partner with you on your next project.

Every month, thousands of Alabama investors benefit from our free membership, which provides:

• Access to exclusive private lending solutions
• Competitive insurance rate shopping
• Off‑market property opportunities
• Actionable market insights

Are you ready to take your Alabama real estate investments to the next level? Contact us today to receive your instant bridge loan quote and start your journey toward financial success in the Heart of Dixie!

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Thousands of real estate investors get value from OfferMarket every month. Membership is entirely free and includes the following benefits:

💰 Private lending
☂️ Insurance rate shopping
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