Alabama Hard Money and DSCR Loans: UWM Leads, Banks Undercut

Three loan markets, not two: what the 2025 federal record shows for Alabama

Other state pages on this site split investor loans in two: short-term “hard money” and 30-year DSCR. Alabama does not split that way. We took the FFIEC and CFPB loan-level Home Mortgage Disclosure Act (HMDA) file for 2025, Alabama rows, conventional originations only: 77,900 loans, 11,105 on investment property and 7,607 of those marked as made for a business or commercial purpose. HMDA has no “hard money” or “DSCR” field, so we use the proxy of our Nevada and Indiana pages: first lien, 1-4 units, closed-end, not a reverse mortgage, investment property, business purpose, and no debt-to-income ratio. That leaves 6,766 base loans, 4,986 of them with no debt-to-income ratio (841 business-purpose investment loans were set aside as open-end lines, reverse mortgages, junior liens or buildings of five or more units).

Within those 4,986 loans the terms fall into three blocks, and in Alabama the middle one is large: 1,137 loans of 36 months or less, 1,362 of 37 to 359 months and 2,485 of 360 months or more. Sixteen entries from one lender, Emporium TPO LLC, have a term of 30 or 40, which looks like years keyed as months; we count them as 360- and 480-month loans, the same convention as our DSCR lender ranking, so they do not appear as 30-month flip loans. We counted from the raw API file. An earlier draft count had 1,311 short-term loans and 2,469 DSCR-type loans; it did not exclude open-end lines and reverse mortgages and did not apply the Emporium convention. With both applied the short-term count is 1,137 and the DSCR-type count 2,485. Lender names come from the FFIEC 2025 filer list, and we merge the two identifiers RCN Capital, LLC carries.

Points, fees and prepayment terms for business-purpose loans are not in HMDA: the prepayment term and the total points and fees read “NA” for every loan in the short-term and DSCR-type groups (the points field has two “Exempt” entries among the 1,137 short-term loans), so the note rate understates the cost. Our hard money loan calculator turns a quote into a total cost, and our national rate page covers the whole market. The public file rounds each loan amount to the midpoint of a $10,000 band.

Alabama business-purpose investor loans by term, 2025 (HMDA, our filters)

“Loans to entities” counts applicants whose age is reported as 8888, the file’s code for an applicant that is not a natural person, the same reading as our New Jersey page. “Bank-named” is our own label for a lender whose filer name includes bank, trust, savings or credit union; it is a name test, not a charter check, and it is our arithmetic.

Banks lend short-term at 7.5% where the specialists charge 10.5%

The short-term market is where Alabama looks least like a hard money market. 403 of the 1,137 loans, 35.4%, came from 35 lenders with a bank, trust or credit union name, at a 7.5% median and a middle half of 7.5% to 8.0%. The 734 from 23 other lenders had a 10.49% median and a middle half of 9.95% to 11.0%. The gap is 2.99 points between the medians. On a $155,000 loan, the short-term median, one year of interest-only at 10.49% is $16,259.50 and at 7.5% it is $11,625.00, a difference of $4,634.50 (our arithmetic, before points and fees, which HMDA does not report). The bank loans are not all small flips: their median loan is $165,000, against $155,000 for the others; 307 of the bank-named lenders’ 403 loans (76.2%) were coded to entities.

Largest lenders of Alabama short-term investor loans, 2025 (HMDA, names from the FFIEC 2025 filer list)

Alabama is much less concentrated than the states where Kiavi dominates: the largest lender holds 33.7% of the loans, the top three 43.4% and the top ten 68.1% (774 of 1,137), and 25 lenders made 10 or more loans. Kiavi’s 383 loans are all coded to entities, 378 have a 12-month term and 370 are purchases; its median is 10.49%, with 99 loans at exactly 10.49%, 63 at 10.99%, 47 at 9.95%, 31 at 11.25% and 30 at 9.5%. HMDA does not say why a borrower landed on one step, so we draw no conclusion about who qualified for which rate. The other non-bank lenders cluster in the same place: the 351 non-Kiavi loans from lenders without a bank name had a 10.5% median. Dominion Financial Services’ 27 loans sit almost on one number, 11.0%, from the 25th to the 75th percentile. Our reviews cover Kiavi, Loan Funder, RCN Capital, CV3 Financial Services and Dominion Financial Services.

Two cautions. The bank loans can be bridge or construction loans, renewals of a relationship or loans to existing customers; HMDA does not show the relationship, the fees or the collateral beyond the property. And a 7.5% note rate on a 12- or 36-month loan is not an offer: of the bank-named lenders’ short-term loans, 169 had a 12-month term, 102 had 36 months and 51 had 6 months. Lenders under HMDA’s reporting thresholds do not appear, so every count is a floor; our private money lender page explains who is missing.

Kiavi pays us a referral fee when a loan closes through its button below. We show it because it is the lender we have a contract with and the largest single name in the Alabama short-term record; that is volume, not a ranking of price, and the bank-named lenders above reported much lower note rates on 403 loans. Visio Lending and Lima One Capital pay us nothing.

The five-year bank loan: 889 loans that fit neither label

Between 36 months and 30 years sits 1,362 loans, 27.3% of the base group, and 93.0% of them came from bank-named lenders (1,267 loans from 58 lenders, median 7.25%). The common term is 60 months: 889 loans from 44 lenders, 869 of them from bank-named lenders, at a 7.25% median and a middle half of 6.768% to 7.69%, $210.0 million in all, 840 with a balloon payment. 526 are purchases and 323 refinances, 668 are coded to entities, and the median loan is $125,000. A five-year balloon loan is a community-bank product: a bank sets a rate for five years on a 20- or 30-year payment schedule and the loan comes due. We cannot see the amortization in HMDA, only that a balloon payment is flagged.

Largest lenders of Alabama five-year (60-month) investor loans, 2025 (HMDA, our filters)

One lender prices far below the rest. FIRSTBANK reported 116 loans in the whole mid-term group at a 5.82% median, and 100 of them have a 60-month term; 75 of its 116 loans carry exactly 5.82%. That rate is far below the 7.5% that Renasant, River Bank & Trust, Bryant Bank, Community Bank of Mississippi and Troy Bank and Trust each report as a median; HMDA does not say why (a promotional rate, a program, a relationship discount or a different borrower profile are all possible, and we have no source for any of them). The 95 mid-term loans from lenders without a bank name were different: 49 from 21st Mortgage (median 9.13%, median loan $45,000) and 42 from Kiavi at 6.99%. Kiavi’s 42 mid-term loans have a median of $65,000.

For a reader the point is practical. If you are buying a $125,000 house in Alabama and want to hold it, the cheapest note rates in the 2025 file for loans without a debt-to-income ratio belong to local banks at a five-year term, not to the 30-year specialists. The price of that is the balloon: the loan comes due in five years and has to be refinanced or paid. Our BRRRR method page explains the refinance step.

United Wholesale Mortgage leads the 30-year market, and lends to people

The rental side of Alabama is the opposite of a one-lender market. 101 lenders made at least one DSCR-type loan, 37 made ten or more and 30 made exactly one. The largest, United Wholesale Mortgage (UWM), made 341 loans (13.7%, 10.5% of the dollars), the top three 32.3%, the top five 44.9% and the top ten 61.5% (1,529 loans).

Largest lenders of Alabama DSCR-type loans, 2025 (HMDA, our filters)

UWM’s Alabama profile is specific. All 341 loans have a 360-month term and none is interest-only; 173 are purchases, 143 cash-out refinances and 25 other refinances; 123 are in Jefferson County, 50 each in Madison and Montgomery and 44 in Mobile. The median loan is $105,000, the smallest of the five largest lenders except BPL’s $95,000, and its middle half of 7.125% to 8.375% is the widest of the top lenders. None of the 341 is coded to an entity, so UWM is the main lender to individuals buying small rentals, while BPL Mortgage, Kiavi, Loan Funder, RCN Capital and LendingOne lent almost only to entities (BPL 261 of 278). UWM made no short-term loan and no loan of 37 to 359 months in the file. For what the federal record says about UWM nationally and how a borrower reaches it, read our separate UWM DSCR investor loans review; this page reports only the Alabama counts. Our reviews also cover BPL Mortgage, HomeXpress, OCMBC, LendingOne, Deephaven and American Heritage Lending.

Entities and persons price almost the same: 1,373 loans coded to natural persons and 1,112 to entities both have a 7.375% median (middle halves 6.875% to 7.875% and 7.085% to 7.75%). The purpose matters more: cash-out refinances have a 7.499% median and purchases 7.25%. 986 of the 2,485 loans (39.7%) are cash-out refinances and 982 (39.5%) are purchases, so Alabama landlords are using these loans to pull equity out as much as to buy. 363 loans were above 8% and 176 below 6.5%. The lowest medians among the large lenders are NFM, Inc. (6.0%) and OCMBC (6.625%), which also have the most interest-only loans (37 of NFM’s 62 and 40 of OCMBC’s 82); interest-only loans are 217 of the 2,485.

The flip lenders are on this list. Four of the eight largest DSCR-type lenders (BPL Mortgage, Kiavi, Loan Funder and RCN Capital) also made short-term loans in Alabama, and 19 lenders made both kinds. That differs from the Nevada record, where none of the eight largest DSCR lenders made a short-term loan. For a reader following the flip-to-rental path it means a refinance can stay with one lender in Alabama, which may save an appraisal and closing costs but also means the same lender prices both ends. Read the requirements in our DSCR requirements guide and the lender ranking by loan count.

Birmingham, Huntsville, Mobile, Montgomery: the county split

HMDA reports a county, not a city. Jefferson County holds Birmingham, Madison County Huntsville, Mobile County Mobile, Montgomery County Montgomery, Baldwin County the Gulf Shores and Fairhope area, and Tuscaloosa County Tuscaloosa. County names come from the Census Bureau county codes. The county code is missing for 70 short-term and 169 DSCR-type loans, mostly from RCN Capital (53 short-term and 110 DSCR-type), so those loans are in the statewide totals but not in any county row.

Alabama investor loans by county, 2025 (HMDA, our arithmetic)

The counties differ because the lenders differ. Jefferson County is 32.8% of the DSCR-type loans, and two lenders, BPL Mortgage and UWM, made 287 of its 816. Montgomery is a rental market in this record: 275 DSCR-type loans against 89 short-term loans (3.1 to 1), at a $105,000 median loan, the smallest of the six, with BPL Mortgage, UWM and Kiavi first. Madison County is the opposite: Kiavi made 98 of its 174 short-term loans (56.3%), and its DSCR-type median of 7.125% is the lowest of the six large counties. Baldwin County has the biggest loans ($245,000 short-term, $265,000 DSCR-type, $300,000 for the mid-term group), 23 entities among its 149 DSCR-type loans, and a different set of lenders. Tuscaloosa’s 8.05% short-term median is the lowest because Bryant Bank made 19 of its 50 loans and BankFirst Financial Services 8; in Tuscaloosa the DSCR-type leader is NFM, Inc. with 23 of 76. A county median in this record is a lender’s price list, not a local market rate.

Cheap houses: what the small loans mean for cost

Alabama’s loans are small. The median DSCR-type loan is $135,000 and the median short-term loan $155,000. 586 of the 2,485 DSCR-type loans (23.6%) are under $100,000, 1,388 are $100,000 to $199,999, 352 are $200,000 to $299,999, 107 are $300,000 to $499,999 and 52 are $500,000 or more. Smaller loans carry higher note rates: the DSCR-type median is 7.625% under $100,000, 7.375% for $100,000 to $199,999, 7.125% for $200,000 to $299,999 and 7.0% at $500,000 or more. Among short-term loans, 175 are under $100,000 (9.5% median), 616 are $100,000 to $199,999 (10.45%), 180 are $200,000 to $299,999 (9.95%), 93 are $300,000 to $499,999 (8.5%) and 73 are $500,000 or more (8.0%); the larger loans are mostly bank loans.

On a small loan, fixed costs weigh more. Alabama charges a recording tax on mortgages: under Ala. Code 40-22-2(1)a, an instrument securing an initial indebtedness of more than $100 pays “$.15 for each $100 of such initial indebtedness or fraction thereof”, and the instrument is not received for record until the tax is paid. We read the section as it appears in the 2024 Code of Alabama on Justia; the rest of chapter 22, including who pays and any exemptions, we did not read.

Interest and mortgage tax on Alabama median loans (our arithmetic)

These are illustrations before points, fees and any prepayment clause, none of which HMDA reports, and the tax line assumes the instrument secures the full loan amount and that the tax applies as the section is written. Run your own deal in the fix and flip calculator.

Alabama law: one interest ceiling to read, and what we did not read

Alabama’s general interest section is 8-8-1. It begins “Except as otherwise provided by law”, and then says that the maximum rate of interest on the loan or forbearance of money “except by written contract is $6 upon $100 for one year, and the rate of interest by written contract is not to exceed $8 upon $100 for one year”. Read alone, that is an 8% annual ceiling on a written contract. The 2025 file does not fit that picture: of the 1,133 short-term loans with a reported rate, 805 (71.0%) are above 8%, 503 above 10% and 28 above 12%, and 363 of the 2,472 DSCR-type loans with a reported rate are above 8%. The explanation is almost certainly in the words “except as otherwise provided by law”, which point to other statutes, and we did not read them. We therefore make no claim about whether any loan is lawful or what exemptions for large loans, business borrowers, banks or federally preempted lenders apply.

Alabama Code provisions read for this page (statute text saved October 30, 2026)

We could not read Alabama’s foreclosure sections (Title 35, chapter 10), the statutory right of redemption in Title 6, the Alabama mortgage-broker and lender licensing rules or the Alabama Legislature’s own copy of the Code: the Legislature’s site loads as a script, the commercial copies block automated requests and the Internet Archive copies we tried for those sections were not available. We therefore give no foreclosure timeline, no redemption period and no licensing conclusion. Before you sign a note, ask the lender for its Alabama license or the exemption it relies on, and ask a lawyer licensed in Alabama about interest, foreclosure and redemption. Our extension and default interest page lists the clauses that decide what a loan costs in practice, and our LLC for rental property page covers the choice of holding entity.

What an Alabama investor can do with this

1. Place the quote on the right distribution. A short-term quote at 7.5% to 8.0% belongs with the banks (middle half of 403 loans); 9.95% to 11.0% belongs with the specialists (734 loans). Comparing a bank quote with Kiavi’s 10.49% median is comparing different products.
2. Ask community banks, not only specialists. In 2025 the bank-named lenders made 403 of 1,137 short-term loans and 1,267 of 1,362 mid-term loans, at medians of 7.5% and 7.25%. The trade-off is a shorter term or a balloon; 960 of the 1,362 mid-term loans were flagged balloon.
3. Price the five-year balloon honestly. A 60-month loan at 7.25% still has to be refinanced or paid in five years, at whatever rate and credit rules apply then.
4. If you want a 30-year rental loan, shop more than UWM. UWM made 341 loans at a 7.5% median, but OCMBC (6.625%) and NFM (6.0%) had lower medians on 82 and 62 loans; their loans are mostly in particular counties (Talladega and Morgan for OCMBC, Tuscaloosa and St. Clair for NFM), and HMDA does not show the points or the borrower profile.
5. Keep the exit in mind. Four of the largest DSCR-type lenders also lend short-term; a refinance with the same lender can save closing steps, but price both ends.
6. Count the small-loan costs. The recording tax is $232.50 on a $155,000 loan, and every dollar of fixed cost weighs more on a $105,000 UWM-size loan. See the hard money loan calculator.
7. Ask for the license or exemption and read the fees, not the rate. We could not read Alabama’s licensing or foreclosure sections; points, extension fees, the prepayment clause and the default rate are decided by the note.

FAQ

Loan data: FFIEC/CFPB HMDA 2025 loan-level data, Alabama rows from the Data Browser API (action taken 1, conventional loan type; the raw file and our summaries are in the sources folder), and the FFIEC 2025 filer list; county names from the Census Bureau 2020 county codes for Alabama. Statutes: Code of Alabama 8-8-1 (2023 edition) and 40-22-2 (2024 edition), from Justia’s copy of the Code through the Internet Archive; the Alabama Legislature’s own text was not readable by our tools. All counts, shares, medians and interest and tax figures are our arithmetic. This is analysis of public documents, not investment, legal, tax or lending advice, and not a loan offer.