Hard Money Loan Alabama

Criteria	Guideline
Loan amount (minimum)	$25,000
Loan amount (maximum)	$2,000,000
ARV (minimum)	$100,000
Experience	Not required
Credit score (minimum)	680
Borrowing entity	LLC or Corporation
Initial advance	up to 90%
Construction holdback	up to 100%
LTARV (maximum)	75%
Interest rate	get instant quote
Origination fee	1.5 to 2 points
Term	12 to 24 months
Points out	None
Prepayment penalty	None
Structure	Interest-only with balloon payment
Recourse	Full (51% of borrowing entity must guarantee)
Exit strategy: Sale	minimum 30% ROI
Exit strategy: Refinance	minimum 1.1 DSCR after repairs
Valuation	Appraisal report or In-house valuation
SqFt (minimum)	Single family: 700+ 2-4 unit: 500+ per unit Condo: 500+
Acreage (maximum)	5
Interest accrual	Under $100,000 loan: full boat $100,000+ loan: as disbursed
Advanced draws	Lender discretion
Down payment (minimum)	$10,000

Tier	Verifiable experience
1	0
2	1 to 2
3	3 to 4
4	5 to 9
5	10+

Tier	Initial advance (% of purchase price)
1	80%*
2	85%
3	85%
4	90%
5	90%

Scenario	Adjustments
Credit score less than 720	-5%
Full gut rehab	-5%
New market	-5%
Licensed Realtor	up to +5%
Licensed General Contractor	up to +10%
Licensed Professional Engineer	up to +10%
Rural (must have 3+ experience)	-20%

Rehab Scope	Definition
Light	Rehab budget is <25% of purchase price
Moderate	Rehab budget is 25–49.99% of purchase price
Heavy	Rehab budget is 50–99.99% of purchase price
Extensive	Rehab budget is 100%+ of purchase price — additions, expansions, ADUs, or lopsided deals*

Tier	Experience	Light	Moderate	Heavy	Extensive
1	0	Eligible	Ineligible	Ineligible	Ineligible
2	1–2	Eligible	Eligible	Eligible	Ineligible
3	3–4	Eligible	Eligible	Eligible	Eligible
4	5–9	Eligible	Eligible	Eligible	Eligible
5	10+	Eligible	Eligible	Eligible	Eligible

Tier	Experience	Light	Moderate	Heavy	Extensive
1	0	70%	Ineligible	Ineligible	Ineligible
2	1–2	70%	70%	70%	Ineligible
3	3–4	75%	75%	75%	70%
4	5–9	75%	75%	75%	70%
5	10+	75%	75%	75%	70%

LTFC Limits

Example: No Experience

Scenario: You’re an aspiring investor in Montgomery with no completed flips under your belt.

Example: No Experience, Excellent Credit

Scenario: You found a solid deal in Birmingham and your credit score is stellar.

Example: 5 Experience

Scenario: You’ve completed 5 flips around Huntsville and want high leverage.

Refinance Using As Is Value Instead of Cost Basis for Initial Advance

Let’s say you’ve owned a property in Mobile for three years. It’s increased in value, and now you want to tap into that equity while doing cosmetic updates to prepare for sale. In this refinance situation, OfferMarket may base your initial advance on the current As Is value—not your original purchase price—if:

• The property is habitable (C4+ condition)

• It has been seasoned for at least 3 years

• You have Tier 3+ experience and 680+ credit

• Comps in the neighborhood support the higher As Is valuation

We’ll also review:

• Payoff statement (no default interest or excessive fees)

• Whether the property was tenant-occupied for 3+ years

• That the value increase is justified by local market comps

Wholesaler and Assignment Fee Guidelines

Wholesaling is active in many parts of Alabama. If your transaction involves a double close or assignment fee, OfferMarket will accept price markups—up to 20%—toward your value basis.

Example:

• A-B Contract (seller to wholesaler): $100,000

• B-C Contract (wholesaler to you): $125,000

• As Is Value: $125,000

• Value basis for advance: $120,000

Conditions:

• Price run-up cannot exceed 20% of A-B price

• Full chain of contracts required

• No MLS-listed wholesaler properties accepted

• No referral fees or finders fees allowed

• All parties must be unrelated (arm’s length transaction)

Construction Holdback

Your rehab budget is funded through draw requests. In Alabama, especially in markets like Decatur or Tuscaloosa, access to reliable contractors is key. Here’s how our process works:

If you’re floating your own renovation costs, you may skip the holdback altogether. If your loan is $100,000+, you only pay interest on drawn amounts.

Appraisal and In-House Valuation

All OfferMarket hard money loans in Alabama require valuation. This may come from:

• Interior appraisal (standard)

• Exterior appraisal (if eligible)

• In-house valuation (for experienced borrowers)

In-House Valuation

Even if you meet the above, OfferMarket reserves the right to still require a full appraisal.

Exterior Appraisal

You may qualify for an exterior-only appraisal in Alabama if the property was acquired via:

• REO sale

• Foreclosure auction

• Sheriff’s sale

• Bankruptcy sale

Exterior appraisals must be dated within 120 days of closing. If 120–179 days old, they require recertification.

Interior Appraisal

All other scenarios require a full interior appraisal:

OfferMarket handles the appraisal order via AMC. Borrowers pay the invoice directly. No appraisal = loan on hold.

Appraisal Transfer

Already paid for an appraisal in Alabama? You may be able to transfer it to OfferMarket if:

• It was ordered through an approved AMC

• It's less than 180 days old

• It includes full certification and file format (PDF, XML)

• A signed transfer letter is provided

• The appraisal was paid in full

Scenario: Stabilized Hard Money Loan

If your property in Alabama is rent-ready or retail-ready—meaning it’s in good shape with no major repairs needed—we’ll treat it as a stabilized asset. Whether it’s a 3-bed in Prattville or a duplex in Madison, we’ll base our loan on the As Is value and offer up to 75% LTV.

Key Loan Details

Extensions

While hard money loans in Alabama are designed to be short-term (typically 12 months), delays happen. But extensions should be avoided if possible — they incur fees and can increase risk.

Common reasons Alabama investors face delays:

• Overambitious rehab scope for your liquidity level

• Hiring inexperienced GCs in smaller towns

• Property access issues (tenant holdovers, legal disputes)

• Lack of dual exit strategies (flip or rent fallback)

By planning smart, you reduce the chance of costly overruns.

Extension Limits

Extension Terms and Fees

Extension Prerequisites

To qualify for an extension, you must confirm your builder’s risk insurance remains active for the extension period.

Ineligible Property Types

In Alabama, we do not fund loans for:

• Mixed use or 5+ unit multifamily

• Condotels or co-ops

• Mobile/manufactured homes

• Cabins/log homes

• Oil/gas lease properties

• Active farms, orchards, or ranches

• Seasonal/vacation rentals

• Luxury or exotic estates

• Properties with dirt or unpaved roads

Exception Scenarios

Some loans in Alabama may be considered under exceptions:

• Guarantor FICO between 660–679

• Leasehold (ground rent) scenarios

• SFRs between 500–699 SQFT

• 2–4 unit properties with one or more unit under 500 SQFT

• Initial advance based on As Is value (if higher than cost basis)

• Non-arm’s length transactions

• Financed interest payments

Borrower and Guarantor Requirements

Liquidity Verification

To make sure you’re financially prepared to take on a rehab project in Alabama—whether you’re buying a fixer-upper in Birmingham or a duplex in Tuscaloosa—we require that you (or your guarantor group) have sufficient liquidity.

You’ll need at least enough verified liquid assets to cover:

• Your estimated cash to close

• Plus 25% of your rehab budget

What counts as liquid assets?

These are funds that you (or the borrowing entity) control directly and can be verified through statements:

• Bank accounts (personal or business)

• Entity-owned business accounts (we’ll review your operating agreement)

• Brokerage accounts (personal or entity-owned)

• Retirement accounts (with a 50% haircut applied)

Key notes:

• You do not need to transfer or move funds into one account — just provide statements.

• You are not required to open a business bank account, but doing so is a smart best practice.

• Funds for cash to close will be confirmed on the closing statement and must be wired to the title company or closing attorney.

• We will request the 2 most recent monthly statements for any account used to verify liquidity.

• If there are large, unexplained deposits, you may be asked to provide a Letter of Explanation (LOE).

This policy helps us make sure you're set up for success, even if unexpected costs pop up during your project—because Alabama rehab projects often come with surprises.

Credit and Background Review

Key items we review when evaluating your file:

• We use the middle score from a 3-score trimerge; lowest if only 2 scores

• If <5 tradelines or no mortgages: 6 months interest reserves required

• No bankruptcies or foreclosures in the past 4 years

• Delinquencies or large outstanding balances must be cleared pre-closing

• No unresolved civil/criminal litigation related to financial or fraud-related offenses

Interest Reserves

In Alabama, we sometimes collect interest reserves (held in escrow) depending on borrower profile.

Financed Interest Payments

To help protect your liquidity—especially if you’re juggling multiple projects in Montgomery or managing unexpected rehab costs in Mobile—you may qualify for financed interest.

Instead of making monthly interest payments from your account, we’ll roll the interest into your final payoff. This helps you keep more cash on hand for materials, labor, and emergencies.

Example:

• Total loan: $100,000

• Interest rate: 12%

• Project duration: 9 months

• Accrued interest: $9,000

• Payoff breakdown:

  • Unpaid principal: $100,000

  • Unpaid interest: $9,000

This option is subject to underwriting approval and is especially helpful in markets with unpredictable holding times.

Property Sourcing Guidelines

Real estate deals in Alabama often come through wholesalers, auctions, and distressed seller situations. OfferMarket welcomes these—but with oversight.

Here’s what we’ll ask for, depending on the situation:

• New markets: Provide a General Contractor (GC) agreement or LOE explaining why a GC isn’t required.

• Wholesale deals: Full contract chain and assignment documentation.

• Heavy rehab: Architect letter, engineering docs, or building permits.

• All submissions should include:

  • Purchase contract

  • Settlement statements

  • Payoff letters

  • Rehab scope

  • Entity documents

  • Track record

This documentation protects your deal and accelerates underwriting.

Insurance Guidelines for Hard Money Loans

You’ll need to protect your Alabama investment—physically and legally. That’s why we require Builder’s Risk Insurance, also called Fix and Flip Insurance.

This special coverage is designed for vacant, rehab, or under-construction properties and includes:

Coverage Details

💡 Pro tip: Install smoke detectors, locks, and cameras right after closing. It helps reduce risk—and supports your insurance compliance.

Frequently Asked Questions

What states does OfferMarket fund hard money loans in?

We fund loans across nearly every U.S. state—including Alabama. For a full list, see the final FAQ section.

In Alabama, we’re active across Birmingham, Montgomery, Huntsville, Mobile, and more.

Can I do more than one hard money loan at a time?

Yes. Many OfferMarket clients in Alabama operate multiple active loans at once. Just know—we monitor risk closely. If your liquidity or project pace doesn’t support another deal, we’ll work with you to manage responsibly.

Are hard money loans commercial?

Yes. These loans are for business use only. That means:

• They’re made to your LLC or corporation

• They’re classified as commercial by lenders and regulators

• You can’t live in the property—it must be non-owner occupied

What is the minimum loan amount?

We fund loans starting at $25,000. That’s especially useful in Alabama markets where purchase prices are below the national average—like parts of Selma, Anniston, or Gadsden.

Which property types are eligible?

We finance non-owner occupied 1–4 unit residential properties, including:

• Single-family homes

• Townhomes

• Duplexes, triplexes, and quads

• Warrantable condos

We do not fund properties like:

• Mixed use

• 5+ unit multifamily

• Commercial retail, industrial, or land

How do you calculate Loan-To-Value (LTV)?

In our Alabama lending program, Loan-To-After-Repair Value (LTARV) is the most important metric. While LTV looks at the current value, LTARV looks at the future value of the property once renovations are complete.

Here’s how we break it down:

• LTV (Loan-to-As-Is-Value): Based on the lower of the purchase price or appraised current value

• LTARV (Loan-to-After-Repair Value): Based on the appraised ARV after renovations

Example:

• You purchase a property in Decatur for $100,000

• Rehab: $25,000

• After Repair Value: $175,000

• Total loan: $115,000 (includes advance + rehab)

• LTARV = $115,000 ÷ $175,000 = 65.7%

What are the credit requirements?

You must have a minimum FICO of 680 to qualify for a hard money loan in Alabama. If your score falls between 660 and 679, we may still consider your application under exception review.

We pull a soft tri-merge credit report for each individual who will personally guarantee the loan. Guarantors must meet our credit threshold — non-guarantors are not considered.

What are the experience requirements?

No experience? No problem.

Many Alabama investors begin with zero verified projects. We use a tiered experience system, so more deals mean more leverage and better terms.

Once you complete the Track Record section of your loan file, we’ll verify your past projects. You may be asked for:

• Settlement statements

• Operating agreements

• Proof of ownership or construction management

Does being a wholesaler count as experience?

Unfortunately, no. Acting as a wholesaler on a deal in Montgomery or Birmingham doesn’t qualify for experience tiers, since you weren’t financially responsible for completing the rehab.

Only projects where you funded and executed the rehab count.

What documentation is required?

OfferMarket’s Loan File System makes document collection simple, secure, and reusable for future loans. Here’s what you’ll need depending on your transaction type.

Purchase Transaction Requirements

Refinance Transaction Requirements

Are there special requirements for loans over $1M?

Yes — high-value projects in Alabama (often in suburbs of Birmingham or coastal cities like Gulf Shores) must meet more stringent requirements:

Glossary of Key Terms

Instant Hard Money Loan Quote

Looking to lock in a competitive, reliable hard money loan in Alabama? You’re in the right place.

OfferMarket Capital LLC, our private lending division, is a leading provider of hard money loans in Alabama, designed specifically for 1–4 unit residential real estate investors across the state.

Thousands of real estate investors across the country—and right here in Alabama—rely on OfferMarket every month.

Membership is 100% free and comes with valuable tools and perks:

💰 Private Lending
Instant hard money and DSCR quotes — optimized for your investment goals in Alabama.

☂️ Insurance Rate Shopping
Compare fix and flip insurance and builders risk coverage from top carriers.

🏚️ Off-Market Properties
Discover discounted deals and motivated sellers before they hit the MLS.

💡 Market Insights
Track rental demand, pricing trends, and investor activity in Alabama’s top metros.

Get your instant hard money loan Alabama quote now and move one step closer to your next successful project.

💰 Private lending
☂️ Insurance rate shopping
🏚️ Off market properties
💡 Market insights

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