An Alabama DSCR loan is business-purpose financing on a 1-4 family rental, secured by a mortgage. Alabama charges a mortgage recordation tax that the Alabama Department of Revenue lists at 15 cents per $100 of indebtedness.
Alabama mortgages can be foreclosed under a power of sale in the mortgage, a sale the lender conducts itself, and the state charges a recordation tax of 15 cents per $100 on the loan. For an investor, the deposit cap and its 60-day refund window are the landlord rules to plan around.
If you're comparing a DSCR loan with a bank loan on an Alabama rental, start with the side-by-side on limits and pricing.
How much is Alabama's mortgage recordation tax?
The Alabama Department of Revenue lists the mortgage recordation tax at 15 cents per $100 of indebtedness or fraction thereof.
| Loan amount | Recordation tax at $0.15 per $100 |
|---|---|
| $200,000 | $300 |
| $400,000 | $600 |
Exception: Confirm the current rate with the title company before closing.
According to the Alabama Department of Revenue, Recordation Tax, as read October 2026.
How are rental property loans foreclosed in Alabama?
Alabama mortgages can be foreclosed under a power of sale in the mortgage, a sale the lender conducts itself; the U.S. Court of Appeals for the Eleventh Circuit has described an Alabama lender exercising a power of sale to conduct its own foreclosure.
- The Eleventh Circuit, citing Ala. Code 35-10-14, has stated that Alabama requires a foreclosure sale to be held between 11 a.m. and 4 p.m.
- The Eleventh Circuit described the lender in CS Assets as exercising a power of sale to conduct its own foreclosure on the mortgaged property.
Exception: Ala. Code chapter 35-10 sets further requirements for these sales; read it or ask an Alabama attorney for a specific property.
According to FHLMC v. Wilson (11th Cir. 2017) and CS Assets v. West Beach (11th Cir. 2010), U.S. Court of Appeals for the Eleventh Circuit, as read October 2026.
What Alabama landlord rules affect a rental property's numbers?
Alabama caps a security deposit at one month's periodic rent, with exceptions for pets, alterations and increased liability risk, and requires the refund or an itemized accounting within 60 days after the tenancy ends and possession is delivered, under Ala. Code 35-9A-201.
- A landlord who fails to refund within 60 days is liable for double the original deposit.
- The text was read from the Legislature's copy of 2023 SB242, which reproduced the existing section while proposing to remove the cap.
Exception: Read the current Ala. Code 35-9A-201 before withholding any part of a deposit.
According to Ala. Code 35-9A-201 as reproduced in 2023 SB242, Alabama Legislature, as read October 2026.
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DSCR Commercial Loan is an advertising publisher and referral service for business-purpose DSCR financing on one- to four-family rentals, not a mortgage broker or lender. With your consent, we refer your inquiry to one independent financing professional. Financing options, eligibility and terms are determined solely by that professional and the final lender.
Disclaimer
This page is general education about business-purpose real estate financing and state law as published by official sources on the date shown. It is not legal, tax or lending advice, not an offer to lend and not a rate quote. Laws and lender guidelines change; confirm current rules with the lender, the title company and your own attorney or tax adviser.