Birmingham is one of the places where a $150,000 loan minimum really matters. Many rental houses in Bessemer, Ensley, Fairfield and East Lake are worth less than that, so the way to finance them at scale is to put several on one loan.
In short: LendingStreet offers blanket portfolio loans that combine five or more Birmingham-area rentals, each 1 to 8 units, into one loan with one closing and one payment. The loan qualifies on combined portfolio cash flow, not your income, and release provisions let you sell one house without refinancing the rest. That structure works well in Birmingham, where many single-family rentals are too small to finance individually.
Birmingham has a large supply of modest single-family rentals priced from roughly $100,000 to $180,000, with rents that are high relative to those prices. That combination produces strong cash flow, but a single house often falls below a $150,000 loan minimum.
A blanket loan solves that by sizing one loan on the combined value of the group. An owner with eight houses worth $1.1M can finance them together, with one payment instead of eight and portfolio pricing on the whole package.
It also simplifies the next step. Many Birmingham investors buy houses with cash or short-term financing, renovate them and then need long-term debt on a group at once. A blanket refinance lets you recycle that capital in one closing rather than five or ten.
Western Jefferson County holds many investor portfolios: Bessemer, Ensley, Fairfield, Midfield, Hueytown and the West End, where brick ranch homes and older bungalows rent to working families. On the east side, East Lake, Roebuck, Irondale and Tarrant add similar stock.
Higher-priced rentals in Homewood, Hoover, Trussville and Shelby County suburbs such as Pelham and Alabaster can be added to raise the portfolio's average value, though they often bring lower rent-to-price ratios. A mix of east and west side homes spreads risk across submarkets.
A blanket loan adds the rent from every property and compares it with the combined payment: principal and interest on the single loan plus taxes and insurance on each house. The result must clear the program minimum, usually 1.0x.
In Birmingham, strong rent-to-price ratios often let portfolios qualify at higher leverage than in expensive markets. The weak link is usually condition: a house with deferred maintenance or a long vacancy pulls down the total, and appraisers will note condition on every property.
Rent collection history matters too. In some western Jefferson County neighborhoods, a portfolio with long-tenured tenants and steady payments reads better than one with high turnover, even at the same rent levels. Bring a rent roll that shows lease start dates.
This example is illustrative and not a quote. An owner refinances eight single-family rentals worth a combined $1,120,000 with total rent of $10,065 a month. Taxes, at the rental assessment class, total $950 a month, and insurance totals $970.
At 75% of value the blanket loan is $840,000, with estimated principal and interest of about $5,873 on a 30-year term. The combined payment is about $7,793 and portfolio DSCR is about 1.29x, a healthy margin above 1.0x.
| Property | Value | Monthly rent | Allocated loan at 75% |
|---|---|---|---|
| Bessemer house | $125,000 | $1,150 | $93,750 |
| Ensley house | $115,000 | $1,100 | $86,250 |
| Roebuck house | $150,000 | $1,325 | $112,500 |
| East Lake house | $130,000 | $1,200 | $97,500 |
| Hueytown house | $160,000 | $1,395 | $120,000 |
| Fairfield house | $120,000 | $1,125 | $90,000 |
| Irondale house | $175,000 | $1,495 | $131,250 |
| Tarrant house | $145,000 | $1,275 | $108,750 |
| Total | $1,120,000 | $10,065 | $840,000 |
Each house carries an allocated share of the loan. When you sell one, the release clause sets the paydown needed to take it off the lien, often more than the allocation. Release terms vary by program.
In the example, if the release price were 120% of the allocated amount, an assumption for illustration, selling the Irondale house would require paying down $157,500 against its $131,250 share. On lower-priced homes, the release price can approach the sale price, so plan sales with the release terms in mind.
Because each house is a small share of the total, the remaining portfolio usually still clears the ratio after one sale. Selling several of the strongest cash-flow houses in a row is what can create problems. A short list of which homes you expect to sell, and when, helps us structure the releases.
Alabama assesses owner-occupied homes at a 10% assessment ratio and most rentals at a 20% assessment ratio. If you bought houses from owner-occupants, make sure the current bills reflect the rental class; a later correction raises taxes and lowers your portfolio DSCR.
Jefferson County has Birmingham and Bessemer divisions for tax records, and Shelby County properties are handled separately. Alabama also charges a deed tax on transfers and a mortgage recording tax based on the loan amount, which you will see on a blanket refinance closing statement.
Older Birmingham houses can have original electrical systems, galvanized or cast-iron plumbing and aging roofs, which affect insurability. Many investors use a single landlord policy across the portfolio. Spring storms and tornadoes make wind coverage a significant part of the cost.
Expect every property to be valued and its condition noted. Houses that need major work may be better left out and financed with a bridge or fix-and-flip loan until they are ready.
A flood determination is needed for each address. Homes near Village Creek, Valley Creek and the Cahaba River can fall in mapped flood areas, and flood insurance would then be required on those properties.
Send a schedule listing each address, the city it sits in, rent, lease end date, estimated value, taxes, insurance and loan balance. LendingStreet will run the portfolio ratio, flag any houses that pull it down and suggest a structure.
Our investor loans are business-purpose loans on non-owner-occupied property. Call (877) 298-1001 or use the form below to get a quote.
Yes, by combining them. A blanket loan is sized on the group, so individual homes below the minimum can be included.
Five or more investment properties, each with 1 to 8 units.
Yes. Properties across Alabama can be combined, and some programs include other states.
Alabama taxes most rentals at a 20% assessment ratio, double the owner-occupied ratio. The county may have reclassified the property.
Portfolio DSCR uses combined rent, so a vacancy lowers the ratio. Short vacancies are usually absorbed by the rest of the portfolio.
Yes, up to program limits, as long as the portfolio still clears the minimum at the new payment.
No. The loan qualifies on rental income. We review credit, reserves, the leases and the value and condition of each house.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so every house in the portfolio must be rented to others.
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