Written & reviewed by Stephen A. Sobin, President of Select Commercial Funding LLC
Alabama
Alabama Apartment Loans
Select Commercial arranges Alabama apartment loans from $1,500,000, up to 80% LTV, with rates as low as 5.67%. We compare Fannie Mae, Freddie Mac, FHA, bank and bridge programs to fit your property. For larger balances, see multifamily loans. See current rates on every loan type we offer.
Get a Free QuoteFinancing Options in Alabama
Alabama apartment, multifamily and commercial properties each have dedicated financing. Pick the page that matches your property:
Financing more of the state? See Alabama commercial mortgages.
Financing in another state? Explore our apartment loans, multifamily loans and commercial mortgages nationwide.
Alabama Apartment Loan Rates
Rates updated as of August 30, 2026
| Loan Type | Rate* | Max LTV |
|---|---|---|
| 5 Year Fixed | 6.07% | Up to 80% |
| 7 Year Fixed | 6.17% | Up to 80% |
| 10 Year Fixed | 6.25% | Up to 80% |
| Loan Type | Rate* | Max LTV |
|---|---|---|
| 5 Year Fixed | 5.67% | Up to 75% |
| 7 Year Fixed | 5.77% | Up to 75% |
| 10 Year Fixed | 5.85% | Up to 75% |
- Streamlined underwriting for institutional multifamily
- Cash-out refinances are acceptable
- Interest-only and non-recourse options
- Minimum 1.25x debt-service-coverage ratio
Rates last updated August 30, 2026. Rates and maximum LTV shown represent our best-case pricing scenarios. Actual rates, LTV, and loan terms are subject to underwriting approval and may vary.
Compare Alabama Apartment Loan Programs
As a broker we compare every program for your best-fit Alabama apartment financing:
| Program | Typical rate* | Max leverage | Best for |
|---|---|---|---|
| Fannie Mae Small Loan | 6.07% | Up to 80% | Non-recourse, fixed to 30 yrs |
| Freddie Mac SBL | 6.15% | Up to 80% | $2M to $10M small balance |
| FHA / HUD | 6.12% | Up to 85% | Highest leverage, longest term |
| Bank / portfolio | 6.25% | Up to 75% | Flexible, value-add |
| Bridge | 9.00% | Up to 80% LTC | Reposition, lease-up |
Most apartment lenders look for a debt-service-coverage ratio (DSCR) of at least 1.25x.
2026 Alabama Apartment Loan Market
Alabama has quietly become two different investment cases, and the split is between the state’s two largest cities. Birmingham average rent reached about $1,371 as of August 2026, up 2.86% over the year. Huntsville ran $1,278, up 1.3%. Both figures cover professionally managed buildings of fifty units and up.
Huntsville is the growth market and Birmingham is the yield market, and they do not underwrite the same way. Huntsville has spent two decades building one of the most concentrated aerospace and defense economies in the country around Redstone Arsenal and the federal research presence there, and its population and construction have followed. Birmingham runs on medicine, banking and higher education, with the university medical system as the dominant employer, on an older and much lower-basis building stock.
Rent growth of under 3% in both markets tells you something useful: Alabama did not participate in the Sun Belt construction boom the way Nashville, Atlanta or Charlotte did, so there is no overhang to work off and no concession war to time. What growth there is comes from demand rather than from a market recovering off a low base. For a lender that is a simpler file than most of the Southeast right now.
Basis is low across the state, which means an Alabama apartment loan is generally sized on debt service coverage rather than on loan to value. It also means the stock is old outside of Huntsville, so roofs, systems and any deferred maintenance carry real weight in the property condition report.
Across Alabama we arrange apartment building loans from $1,500,000 through agency, bank, FHA and bridge programs. Rate and leverage follow the rent roll and the trailing twelve months of operating income, not your personal income.
Alabama Markets We Finance
Four metros with four genuinely different employment bases, which is unusual for a state this size and which is exactly what a lender looks at. An Alabama apartment mortgage is structured to the local economy more than to the state.
Huntsville and the Tennessee Valley
The growth story, at an average rent near $1,278 as of August 2026 and up 1.3% over the year. Aerospace, defense contracting and federal research around Redstone Arsenal have driven two decades of population and construction growth, and the stock here is the newest in Alabama by a wide margin. That newness helps on the property condition report and hurts on the concession front, because Huntsville is the one Alabama market where meaningful new supply has been competing for tenants. Agency programs are most competitive here.
Birmingham
The yield story, at about $1,371 and up 2.86% over the year, the strongest growth of the major Alabama markets. The university medical system is the largest employer in the state and anchors a healthcare, banking and higher education base that does not track the industrial cycle. Cost per unit is well below Huntsville on considerably older stock, which means a Birmingham apartment complex loan is coverage-driven and the capital plan matters. Regional banks and credit unions compete hard here against the agency small-balance programs.
Birmingham apartment loans · Birmingham commercial
Mobile and the Gulf Coast
Port, shipbuilding, aerospace assembly and petrochemical employment anchor Mobile, with Baldwin County across the bay carrying a tourism and retirement economy of its own. This is the part of Alabama where the insurance binder drives the loan. Named-storm deductibles, flood zone, total insured value against replacement cost and roof age all get read carefully by carriers and therefore by lenders, and documented mitigation work is worth real proceeds. Send the binder with the rent roll, not after it.
Montgomery and central Alabama
State government, military installations and automotive manufacturing give Montgomery a steady if unspectacular demand base, with the lowest basis per unit of the four metros and correspondingly high going-in yields. Very little new construction competes with existing buildings. These are community bank, credit union and agency small-balance markets throughout, and building condition is usually the deciding factor in how a file sizes.
Rent figures above are average asking rents across professionally managed buildings of fifty units and up as of August 2026. Where we do not yet have a dedicated apartment page for an Alabama city, the link goes to our commercial mortgage page for that market.
How an Alabama Apartment File Actually Underwrites
Three things decide an Alabama loan, and none of them is the rate. Knowing which of the three applies to your building is worth more than shopping quotes.
Employment concentration, which cuts both ways. Huntsville’s defense and aerospace base has been an enormous strength, but it is a concentration, and lenders treat concentrated federal and contractor employment carefully. We have watched what federal workforce contraction did to Northern Virginia rents over the past year, where Arlington, Alexandria and Fairfax all turned negative while the rest of Virginia grew. That is not a prediction about Huntsville, and its base is contract-driven rather than civil-service, but it is the reason an underwriter will look at a longer operating history on a Huntsville building than the strength of the market alone would suggest. Birmingham’s medical and university base is read as steadier precisely because it is less concentrated.
Coastal exposure, which is binary. On the Gulf Coast the bound insurance policy is the dominant variable in the file, and everything above the Black Belt is a different conversation entirely. Because debt service coverage is calculated after operating expenses, a named-storm deductible or a flood zone designation can move your loan amount further than a quarter point of rate ever will. If your building is in Mobile or Baldwin County, treat the binder as a primary document rather than a closing item.
Building age, which is most of the state. Outside Huntsville, Alabama rental stock is old. Roofs, HVAC, electrical service and plumbing are priced into the property condition report rather than overlooked, and on a low-basis asset a funded capital plan is frequently worth more proceeds than any rate improvement available to you. Owners who arrive with three clean years of operating statements and a documented schedule for major systems consistently out-borrow owners with an identical building and a thin file.
The good news is what is absent. Alabama did not build the way the rest of the Sun Belt did, so there is no supply overhang to time, and rent growth under 3% in both major markets reflects genuine demand rather than a recovery off a depressed base. That makes the underwriting conversation here simpler than in most of the Southeast.
Refinancing an Alabama Apartment Building
Alabama refinances tend to be decided by the expense line and the property condition report rather than by anything about the market, which makes them more predictable than files in states still working through a supply cycle.
Start with the rent roll and the trailing twelve. Proceeds are sized on in-place income, and because basis is low across the state, sizing is nearly always driven by debt service coverage rather than by loan to value. Every dollar of operating expense goes directly into the loan calculation, so go through the statements yourself before sending them and be ready to explain anything that looks unusual.
On the coast, send the binder with them. If your building is in Mobile or Baldwin County, the insurance policy will shape the outcome. A renewal at a lower premium, a reduced named-storm deductible, or completed mitigation work all flow straight into net operating income. Owners who were declined or downsized in recent years frequently failed on the insurance line rather than on the rents, and those files deserve a second look.
Everywhere, the building itself. Roofs, HVAC and electrical service on older Alabama stock get priced, not overlooked. A funded capital plan changes the conversation. So does a clean three-year operating history.
Then the note. Confirm the maturity date and whether prepayment is yield maintenance, a step-down or open, and start six to nine months ahead of a balloon so there is room to shop more than one lender rather than accept an extension from the incumbent. Cash-out is available on most programs where the equity supports it and coverage holds.
Send the rent roll and the trailing twelve and we will underwrite the building the way the lender will, then come back with written options inside 48 hours at no cost. Alabama apartment loans start at $1,500,000, whether it is a twenty-unit building in Montgomery or a garden complex outside Huntsville.
Alabama Multifamily Financing
Apartment loan and multifamily loan describe the same debt: financing on a building with five or more residential units. We arrange it across Alabama, from a small Birmingham walk-up to a newer Huntsville garden community, and the terminology has no bearing on the underwriting.
Loan size decides who competes. Because Alabama basis is low, many buildings here sit in the range where regional banks, credit unions and the agency small-balance programs are sharpest, and where local knowledge counts for a great deal. Larger balances, most often in Huntsville, open the field to Fannie Mae, Freddie Mac, FHA, life companies and CMBS, and multifamily loan rates there are often tighter because the loan is big enough to securitize, at the cost of a heavier package: full appraisal, property condition report, environmental review, and sizing driven by net operating income, debt service coverage and debt yield.
Alabama multifamily lenders focus on building condition inland and on the insurance binder on the coast. Whichever applies to you, have it documented before you apply. Send the rent roll and the trailing twelve months and we will tell you which multifamily lenders are sharpest on your property, and what multifamily financing looks like at that size.
Alabama Apartment Loan Types We Serve
We arrange financing across Alabama for:
- Urban high-rise apartment buildings
- Suburban garden apartment complexes
- Small apartment buildings with 5+ units
- Underlying cooperative apartment loans
- Portfolios of small apartment and rental properties
- Mixed-use and other multifamily property
Apartment Loans Across Alabama
We arrange apartment loans throughout Alabama, not only in the metros above. Tuscaloosa, Auburn, Dothan, Florence and the Shoals, and the Baldwin County coast are financed through the same agency, bank and credit union programs. The two university towns carry demand patterns unlike the rest of the state, and anything on the coast is underwritten with the insurance binder in hand.
For larger balances see our Alabama multifamily loans. For office, retail, industrial and owner-occupied property see Alabama commercial mortgages, and nationwide we lend in most major U.S. cities.
Recent Apartment Loan Closings
A sample of apartment and multifamily loans we have arranged for investors nationwide.
Other Property & Loan Types We Finance in Alabama
As a full-service commercial mortgage broker, we arrange Alabama financing across every major property and loan type:
We consider commercial loan requests of all sizes, beginning at $1,500,000.
What Our Clients Say
“I am a veterinarian who purchased an existing practice. I was surprised to find a company that offered 100% financing at a good rate, with great terms and rates for medical office financing.”
Carol K. · Chicago, IL“I spoke to several commercial lenders before finding Select Commercial. They got me a lower rate and their service was exceptional. If you need a multifamily loan, you need to talk to Stephen.”
Nathan B. · Philadelphia, PA“Select Commercial was very helpful with my multifamily mortgage. Stephen went over several options and we came up with the best lender to meet my needs. I got the funds and also lowered my payments.”
Gary M. · Portland, OR“Select Commercial offered 100% financing for my medical practice when my bank would have required 20% down. They delivered something my bank could not, and handled everything professionally.”
John C. · Boston, MAGet Your Alabama Apartment Loan Quote
No cost, no obligation. Written answers within 48 hours on Alabama apartment loans from $1,500,000.
- No application or processing fees
- Written answers within 48 hours
- For 5+ unit and commercial properties, $1.5M and up
Alabama City Spotlights: 2026 Apartment Market Notes
Beyond the major metros, we finance apartment buildings across Alabama. Current market notes for cities where borrowers ask us to lend:
- Huntsville: median 1-bedroom rent about $1,012, up 5% year over year (Zumper, August 2026), supported by aerospace and defense employment.
National baseline for context: the U.S. median rent was $1,388 in July 2026, down 1.1% year over year, with rental vacancy near 7.2% (national rent report, July 2026). Each city above links to our local commercial mortgage page, and we finance 5+ unit apartment properties in every Alabama market from $1,500,000.