When it comes to investment possibilities, Alabama might not be the first option that comes to mind. But you may be surprised to learn that not only does Alabama have some of the lowest property taxes in the United States, but it’s also an ideal rental property location thanks to its favorable climate, tourist appeal, and, most importantly, for a property owner - its reputation as one of the most landlord-friendly states in the country.
If, as a foreign national investor, you’ve found getting in touch with the right lender and following the process of investing in property complicated, this guide will simplify the process of investing in Alabama real estate. We’ll first discuss the types of properties available in the state and then show you how to take advantage of DSCR loans with a step-by-step approach to qualifying and securing a mortgage loan as a non-U.S. resident.
We are providing the following discussion to you for informational purposes only. All investments, including real estate, involve risk, and we encourage you to invest carefully. The information in this article is not intended to replace or serve as a substitute for any legal, real estate, tax, or other professional advice or service. You should consult with a professional in the respective legal, tax, accounting, real estate, or other professional area before making any decisions or entering into any contracts relating to a rental property.
Many real estate investors use a financing tool called debt-service-coverage-ratio (DSCR) loans to obtain financing. DSCR mortgage loans make qualifying for and buying income-generating properties easier for foreign nationals.
A DSCR loan enables investors to buy rental properties in Alabama - even if that investor does not live there. Unlike other mortgage loan methods, DSCR eligibility is determined by the potential rental income of a property rather than the borrower's financial status.
DSCR loans are unique as they allow for alternative documentation and qualifications, making it easier for foreign nationals to purchase property in Alabama and other states. These loans offer a flexible solution for foreign investors looking to invest in U.S. property.
DSCR loans offer individualized solutions to simplify your investment process. Here are the key benefits:
With Waltz’s DSCR loan options, international investors can bypass the typical barriers to purchasing U.S. property and take advantage of Alabama’s distinctive real estate market.
If you’re a foreign national applying for a DSCR loan in Alabama, it’s essential to understand that different lenders have different eligibility criteria. Some lenders may be more helpful with international investors than others, so knowing what to expect can help you make an informed decision about the right lender.
Here is a breakdown of the key requirements that most lenders have for foreign nationals, compared to the more flexible options available through Waltz, a foreign national-friendly lender:
Most lenders: Because they are familiar with the U.S. financial system, most U.S. lenders will focus on domestic income rather than foreign income, which can lead to delays or denied approvals. Lenders will typically ask for proof of U.S. income or extensive documentation of your finances from your home country, such as W2 forms, foreign business income, bank statements (possibly including a U.S. bank account2), and other supporting documents.
Waltz: While we review both U.S. and international income, we also streamline this process by asking the right questions and gathering the necessary documents upfront. Unlike many lenders, we focus more on the income generated from the rental property you wish to buy rather than assessing your personal finances.
Most lenders: Many lenders will require higher down payments from foreign nationals ranging from 30% to 50% or even higher. Due to this, many international investors will pay cash instead of taking out a loan with these requirements. Some lenders may also ask you to maintain a certain reserve in your bank account to cover property vacancy or other owner issues.
Waltz: We, on the other hand, generally require a 30% down payment and, in some cases, will allow a down payment as low as 25%. Depending on your specific investment situation, we may also waive the bank reserve requirement on a case-by-case basis.
Most lenders: Lenders will generally ask for proof of identification and your current address to determine that you live in the U.S. and are eligible for DSCR loans. For DSCR mortgage loans, they may require that the loan be under an American LLC, with you as the personal guarantor.
Waltz: We use your passport to verify your identity, even if you’re from outside the U.S. We focus specifically on DSCR loans for foreign nationals, so we also require that the mortgage loan be taken out under the name of an LLC. But we know that can be difficult for international investors. That’s why we provide you with an Investor Kit, which includes an LLC with an EIN and a U.S. bank account, making the entire process easier for you.
Most lenders: Most lenders will require a minimum U.S. credit score of around 640, which can be difficult enough for most American borrowers. But if you don’t have a U.S. credit score, that can be a significant eligibility barrier. And that’s still the case if you have a solid credit history in your home country.
Waltz: Did you know that 50% of international investors choose to pay cash for rental properties? That’s because it has traditionally been hard to get a loan without a U.S. credit score (among other reasons). Not with Waltz. We don’t require a U.S. credit score for foreign investors. Instead, we may use alternative methods such as reviewing international credit histories or evaluating your assets.
Find out how international investors have benefited from working with Waltz.
Finding the right property type in Alabama is essential to generating returns on your investment and ensuring steady rental income. Different property types offer distinct benefits, have varying demand levels, and require different maintenance and management challenges. The area of your investment will also play a prominent role, as some areas of the state have more of one type of property than another. This can influence both your potential income and the demand for rental property.
By choosing the right property type for your goals, you can take advantage of the opportunities available in Alabama and ensure a successful investment. Here are some investment property types and their locations in Alabama:
Alabama offers a desirable lifestyle with its warm Southern charm, outdoor recreational opportunities, and lower living costs than many other states. The state is home to vibrant cities like Birmingham and Mobile, peaceful rural communities, and beautiful beaches along the Gulf Coast. These communities attract a diverse mix of young professionals, retirees, families, students, and more.
Alabama also boasts a growing economy that will boost its Gross Domestic Product (GDP) by 2% by the end of 2024. During the same timeframe, the state’s employment rate is expected to increase by 1.5%. Various industries, including automotive manufacturing, aerospace, and agriculture, drive this growth. Here are a few more reasons why Alabama is a smart place to buy investment property:
Alabama offers a unique blend of Southern charm and growing economic opportunities. With a focus on hospitality and a strong sense of community, the state provides a desirable lifestyle for both residents and investors. Here are some of Alabama’s top real estate markets:
Birmingham is Alabama’s largest city. It boasts a diverse economy, a rich history, and a growing reputation as a cultural hub. Birmingham's rental rates currently average $1,175 monthly, remaining affordable despite a 1.4% increase over the past year.
With its stunning waterfront and deep-water port, Mobile is a key economic driver for Alabama. It offers a blend of historic charm and modern amenities. The Port of Mobile generates $98.3 billion annually for the state, creating over 350,000 jobs.
Known as the Rocket City, Huntsville has a strong aerospace and defense industry that attracts a highly educated workforce and drives real estate demand.
As the state capital, Montgomery offers a blend of history, government jobs, and a growing economy.
Home to the University of Alabama, Tuscaloosa has a vibrant college-town atmosphere and a growing reputation as a cultural and economic center. The average rent for a one-bedroom apartment is $1,109, which has increased by 27% over the past year. This indicates a strong demand for investment rental housing.
Alabama offers many attractive opportunities for real estate investment, including property taxes that are relatively low compared to other states. However, there are a few important things to consider if you want to pursue a foreign national mortgage in Alabama.
Refinancing your Alabama investment property means carefully replacing your current mortgage with a new one. This entails taking out a mortgage to use the equity in their residences to fund new investments. Waltz offers comprehensive and effective solutions to ease this process for Alabama real estate investors. Our knowledge ensures that you may securely and successfully optimize your Alabama real estate investing strategies. The refinancing process for foreign nationals generally involves:
This option can be quite interesting for foreigners looking to invest in the Alabama market because it allows you to adjust the terms of your current mortgage— with the potential that it can result in a better deal on your house loan. Please note that even if you refinance an existing loan at a lower interest rate, your total finance charges may be higher over the life of your loan.
At Waltz, we proudly offer this option to Alabama foreign investors as it allows you to access your property's equity— allowing you to borrow more than the current mortgage balance (based on the original equity). For those interested in Alabama real estate investments, the additional funds can be utilized for various personal objectives, such as home upgrades, debt consolidation, or a down payment on another property. This provides you with cash at closing for a range of needs, broadening your investment opportunities while leveraging the best foreign national mortgages Alabama has to offer.
Is real estate expensive in Alabama?
No, real estate is not expensive in Alabama compared to other states in the U.S. As of 2025, the median Alabama home price is $224,911. That’s compared to the national median home sales price of $419,200 as of the fourth quarter of 2024. Alabama also has the second lowest property taxes in the country, which means you won’t be penalized for buying a property there.
As a foreign national working with Waltz, you need only a passport, a down payment, and documentation showing proof of income or financial information from your home country to start the application process for a DSCR loan in Alabama.
Yes, Waltz can guide you through the entire process from beginning to end to invest in property in Alabama with a DSCR loan. Waltz follows the same process as any other international investment for foreign nationals.
Waltz simplifies the DSCR loan process for foreign nationals by offering lower down payments than other lenders in some instances, requiring less documentation, and facilitating the creation of a U.S. LLC and EIN to increase the chances of receiving a mortgage loan.
Waltz is committed to assisting foreign nationals in building a successful real estate portfolio in Alabama. Our expertise in foreign national mortgages and deep understanding of the Alabama market provides a solid foundation for your investment journey.
Alabama isn’t just a place for college football fans. It’s a treasure in the deep south that’s waiting to be tapped by savvy investors. Packed with charming rural and urban neighborhoods that are full of potential, Alabama’s real estate market is a great way to break into investing or diversify your real estate portfolio. With the right knowledge about DSCR loans and the right partner, foreign nationals can create an attractive option for renters.
This process may seem difficult for a foreign national, but with Waltz, it’s simpler than you might expect. Just follow these steps:
Begin by locating a property with solid rental potential in Alabama. Focus on areas that satisfy your investment goals.
Gather your key documents, such as a valid passport, proof of income (such as foreign bank statements or business income information), and property details. Lenders may also request proof of assets or a credit report from your home country.
Next, look for a lender who understands the needs of foreign investors. They should be familiar with challenges like verifying foreign income and how to respond to issues like the lack of a U.S. credit history. Waltz specializes in loans for foreign nationals and can guide you through this process from beginning to end.
To qualify for a DSCR loan, most lenders will require you to establish an LLC in the U.S. You’ll also need a U.S. bank account for financial transactions. If you don’t have an Employer Identification Number (EIN) yet, both steps might take time. However, with our Investor Toolkit, you can set up your LLC and U.S. bank account instantly, saving you from months of delays.
Before submitting your loan application, speaking with an account executive who can answer any questions and guide you through the process is useful. They’ll help streamline the application, ensuring you have all the necessary property details, financial documents, and proof of the property’s income potential. Once you’ve gathered everything, submitting your application should be quick and straightforward.
This step includes inspecting the property, getting an appraisal, and submitting any additional documents requested by the lender to verify its condition and value. You should also review your term sheet!
Once due diligence is completed and your loan is approved, it's time to finalize the transaction. Sign the required paperwork—if you're outside the U.S., this can potentially be done virtually. Finally, transfer the funds to close the deal, and you'll own a rental property in Alabama!
