Mortgage Loans in Fairhope, Alabama

---

Local Mortgage Financing From a Fairhope-Based Mortgage Company

I live and work in Fairhope and know the city well.  My house is in the Fairhope Single tax land and as a loan officer I have visited the single tax office to collect documents for clients that need them for closing.  No national lender can say that.  Me and my team understand the extra steps needed to get a mortgage on leased land in Fairhope, AL. My cell phone number is 251-391-5618, feel free to give me a call with any questions, or click the Fairhope Loan Options button to start your application for a pre-approval. 

It's always important to work with a great local lender, insurance agent, real estate agent, and title company, but never more important than when buying or refinancing in Fairhope. 

Buying or refinancing a home in Fairhope can involve considerations that borrowers and lenders outside Baldwin County may not encounter every day.

In addition to choosing between conventional, FHA, VA, USDA, construction, jumbo and other mortgage options, some Fairhope properties are located on land owned by the Fairhope Single Tax Corporation.

That means understanding the property itself can be just as important as choosing the right loan program.

Fairhope Mortgage is based in Fairhope, Alabama, and works with homebuyers, homeowners and real estate investors throughout Fairhope and Baldwin County.

Whether you're purchasing your first home, building a custom home, buying near downtown Fairhope, refinancing an existing property or purchasing a home located on Fairhope Single Tax land, we can help evaluate the property and financing before you move forward.

BUYING A HOME IN FAIRHOPE, ALABAMA

Fairhope offers a wide variety of housing, from historic homes near downtown and Mobile Bay to newer subdivisions, custom homes, condos, townhomes, manufactured homes and properties with larger lots outside the center of town.

Mortgage options may include:

Conventional Loans

FHA Loans

VA Loans

USDA Loans

Down Payment Assistance

One-Time Close Construction Loans

Jumbo Loans

Home Equity Loans and HELOCs

Bank Statement and Self-Employed Mortgage Programs

DSCR Investment Property Loans

Manufactured Home Loans

The appropriate loan depends on the borrower as well as the individual property.

WHAT IS FAIRHOPE SINGLE TAX?

One of the most unusual aspects of buying real estate in Fairhope is the Fairhope Single Tax Corporation, commonly abbreviated FSTC.

The Fairhope Single Tax Colony dates to Fairhope's founding in 1894 and was influenced by economist Henry George's ideas about land ownership and taxation.

The Fairhope Single Tax Corporation owns certain parcels of land in and around Fairhope.

Instead of purchasing that underlying land in the traditional fee-simple manner, the property owner holds a leasehold interest in the land under a long-term lease with the Fairhope Single Tax Corporation.

This does not mean that every property in Fairhope is Single Tax property.

Many Fairhope properties are traditional fee-simple real estate.

Whether a specific property is Fairhope Single Tax property needs to be determined from the individual property's title and lease information.

Buying a Fairhope Single Tax Home With a Mortgage

Can you get a mortgage on a Fairhope Single Tax property? 

Yes. Fairhope Single Tax properties can be financed, but the mortgage process is different from financing a traditional fee-simple property because the Fairhope Single Tax Corporation owns the underlying land and the homeowner holds a long-term leasehold interest in the property.

When financing a Fairhope Single Tax home, the lender and closing professionals need to review the applicable lease, title documentation, remaining lease term, property rights, and any Fairhope Single Tax Corporation documents required for the mortgage.

The lender must also make sure the leasehold interest meets the requirements of the specific mortgage program being used. Depending on the borrower, property, and lease, financing may be available through conventional, FHA, VA, and other eligible mortgage programs.

The fact that a home is on Fairhope Single Tax land does not automatically prevent it from being financed. The key is identifying the Single Tax property early and making sure the lender, title company, and closing professionals properly review the leasehold structure before closing.

If you're considering a Fairhope Single Tax property, Fairhope Mortgage can review the property address and proposed financing early in the process to help identify potential mortgage requirements before you make major financial commitments.

WHY IS IT CALLED “SINGLE TAX”?

The term can be confusing because buyers sometimes assume “Single Tax” means Fairhope charges homeowners an additional special property tax.

That is not what the term means.

The Fairhope Single Tax experiment was based on Henry George's economic philosophy that public revenue should primarily come from the value of land rather than improvements and other forms of taxation.

Fairhope's founders attempted to apply those ideas by having the corporation own land and lease it to individuals.

The Fairhope Single Tax Corporation historically collected land rent from its lessees and used those funds in part to satisfy applicable property-tax obligations and support community purposes.

The system evolved over more than a century, but the land-lease structure remains important today because some Fairhope homes are located on land owned by the Fairhope Single Tax Corporation.

DO YOU OWN YOUR HOUSE ON FAIRHOPE SINGLE TAX LAND?

The distinction between the land and the improvements is important.

With traditional fee-simple property, the homeowner generally owns both:

The land

AND

The house and other improvements located on it.

With a Fairhope Single Tax property, the Fairhope Single Tax Corporation owns the underlying land.

The lessee has a long-term leasehold interest in that land and rights associated with the improvements located on the property, subject to the lease and applicable documentation.

That difference is why a Single Tax property requires additional review during a mortgage transaction.

HOW LONG ARE FAIRHOPE SINGLE TAX LEASES?

Fairhope Single Tax has historically used long-term 99-year leases.

When a leasehold interest is transferred, the transaction may involve the issuance or execution of appropriate lease documentation through the Fairhope Single Tax Corporation.

Because the lease is part of the property rights being financed, the lender, title company and closing attorney need to review the applicable documents as part of the transaction.

HOW DOES FAIRHOPE SINGLE TAX AFFECT A MORTGAGE?

A Fairhope Single Tax property can be financed, but the transaction is not identical to financing a standard fee-simple property.

The mortgage lender needs to understand that the Fairhope Single Tax Corporation owns the underlying land and that the borrower holds a leasehold interest rather than traditional fee-simple ownership of the land.

The lender and title professionals may need to review:

The Fairhope Single Tax lease

Remaining lease term

Lease transfer documentation

Property description

Title documentation

Mortgage provisions

Rights of the lender under the lease

Fairhope Single Tax Corporation documentation associated with the mortgage

Applicable loan-program leasehold requirements

The objective is to make sure that the borrower's leasehold interest and the lender's security interest satisfy the requirements of the selected mortgage program.

CAN A FAIRHOPE SINGLE TAX PROPERTY HAVE A MORTGAGE?

Yes.

The Fairhope Single Tax structure specifically contemplates mortgages against leasehold interests and improvements.

Fairhope Single Tax Corporation documentation has historically included an “assent to mortgage” through which FSTC acknowledges the mortgaging of improvements and leasehold interests and provides protections concerning transfer of the lease while the mortgage remains outstanding.

This is one reason it is important for the lender and closing professionals to understand Fairhope Single Tax transactions.

A Single Tax property is not automatically an unfinanceable property simply because the land is leased.

The loan still needs to satisfy the requirements of the specific mortgage program, lender, property and lease.

DO ALL MORTGAGE LENDERS UNDERSTAND FAIRHOPE SINGLE TAX?

Not necessarily.

Leasehold financing exists throughout the United States, but the Fairhope Single Tax Corporation structure is unusual.

A lender unfamiliar with Fairhope may initially see that the borrower does not own the underlying land and assume the property should be treated like an ordinary rented lot.

That is not an accurate way to analyze Fairhope Single Tax property.

The FSTC structure has existed for generations and requires review of the specific leasehold and mortgage documentation.

Working with mortgage, title and real-estate professionals familiar with Fairhope Single Tax can help identify these issues early rather than discovering them immediately before closing.

DOES FAIRHOPE SINGLE TAX AFFECT THE APPRAISAL?

Potentially.

The appraiser must correctly identify and analyze the property rights being appraised.

A property subject to a Fairhope Single Tax lease should not simply be treated as though the borrower owns the underlying land in fee simple when that is not the actual ownership structure.

The appraisal and underwriting need to reflect the applicable property interest and satisfy the requirements of the selected mortgage program.

This is another reason to identify Single Tax property at the beginning of the mortgage process.

DOES FAIRHOPE SINGLE TAX AFFECT PROPERTY TAXES?

Fairhope Single Tax has a different structure from ordinary fee-simple property ownership.

The Fairhope Single Tax Corporation owns the underlying land and collects rent associated with the leasehold.

Historically, the Corporation's system has included payment of applicable taxes from the rents it collects.

Buyers should review the actual FSTC lease, current rent information, property-tax information and closing documentation for the particular property rather than estimating expenses based solely on a nearby fee-simple home.

DOES FAIRHOPE SINGLE TAX AFFECT MY MONTHLY MORTGAGE PAYMENT?

It can affect the housing-expense calculation used in underwriting.

When applicable, recurring obligations associated with the leasehold need to be identified and appropriately considered when determining the borrower's total housing expense.

The exact treatment depends on the property, lease, loan program and underwriting requirements.

This is important because mortgage qualification is based on more than simply principal and interest.

A complete analysis may also consider property taxes, homeowners insurance, flood insurance when applicable, homeowners association dues and other required property-related obligations.

CAN I USE A CONVENTIONAL LOAN ON FAIRHOPE SINGLE TAX PROPERTY?

Yes.

Conventional mortgage programs permit eligible leasehold properties when the lease and transaction satisfy applicable requirements.

The Fairhope Single Tax lease and property documentation need to be reviewed to ensure the transaction meets the requirements of the particular conventional loan and lender.

CAN I USE AN FHA LOAN ON FAIRHOPE SINGLE TAX PROPERTY?

FHA permits eligible leasehold interests, subject to FHA's requirements.

The property, lease and mortgage transaction must satisfy the applicable FHA guidelines.

Because Fairhope Single Tax property involves a specialized local leasehold structure, it should be identified and reviewed early in the FHA mortgage process rather than waiting until final underwriting.

CAN I USE A VA LOAN ON FAIRHOPE SINGLE TAX PROPERTY?

VA financing may be possible on eligible leasehold property when the transaction satisfies VA requirements.

For an eligible veteran or other VA borrower purchasing Fairhope Single Tax property, the leasehold documents and property should be reviewed as part of the VA transaction.

CAN I USE A USDA LOAN ON FAIRHOPE SINGLE TAX PROPERTY?

Potentially, if both the borrower and property satisfy USDA requirements, including applicable geographic, household-income, property and leasehold requirements.

USDA eligibility is property-specific, so an address should be checked rather than assuming that every property with a Fairhope mailing address is or is not USDA eligible.

WHAT SHOULD I DO IF I'M BUYING FAIRHOPE SINGLE TAX PROPERTY?

Tell your lender as early as possible.

Ideally, Fairhope Single Tax status should be identified before or immediately after making an offer.

Early identification gives the mortgage and closing teams time to obtain and review the appropriate leasehold documentation.

If you are unsure whether a property is part of Fairhope Single Tax, ask before assuming.

FAIRHOPE SINGLE TAX SHOULD NOT AUTOMATICALLY STOP YOU FROM BUYING THE HOME

Buyers unfamiliar with the structure sometimes become concerned when they first hear:

“You don't own the land.”

That statement by itself does not explain the complete transaction.

Fairhope Single Tax is a long-established local land-lease system with its own documentation and procedures.

The important question from a mortgage standpoint is not simply whether the land is leased.

The questions are:

What does the lease provide?

What property rights are being transferred?

Does the lease satisfy the requirements of the proposed mortgage program?

Can the lender obtain the required security interest?

Does the title and closing documentation properly reflect the transaction?

When those issues are addressed correctly, an eligible Fairhope Single Tax property may be financeable.

FAIRHOPE SINGLE TAX RESOURCES

For buyers considering a Fairhope Single Tax property, these resources can help explain the system:

Fairhope Single Tax Corporation — Information about the Fairhope Single Tax Corporation, land leasing, and the Single Tax system:
https://fairhopesingletax.com/

Fairhope Single Tax Corporation Lease — Example of the Fairhope Single Tax lease and the rights and responsibilities associated with Single Tax property:
https://www.fairhopeal.gov/home/showpublisheddocument/29912/638333302183830000

Baldwin County Revenue Commission — Property-tax, appraisal, mapping, and property information for Baldwin County:
https://www.baldwincountyal.gov/government/revenue-commission

Baldwin County Property Search — Search individual Fairhope properties by owner, parcel, subdivision, or address:
https://baldwinproperty.countygovservices.com/Property/Search

City of Fairhope — Official information about the City of Fairhope, city departments, utilities, planning, services, and local government:
https://www.fairhopeal.gov/

These resources can help buyers understand the property, land, taxes, and Fairhope Single Tax structure. Mortgage eligibility should still be reviewed based on the individual property address, Fairhope Single Tax lease, title documentation, and proposed loan program.

OTHER MORTGAGE CONSIDERATIONS WHEN BUYING IN FAIRHOPE

Fairhope Single Tax is unique, but it is not the only property-specific issue that can affect mortgage financing in Fairhope.

Depending on the property, Fairhope homebuyers may also need to consider:

Flood Zones and Flood Insurance — Properties near Mobile Bay, waterways, and other flood-prone areas may require flood insurance depending on the property's flood-zone determination and mortgage requirements.

Wind and Homeowners Insurance — Homeowners insurance costs and available wind coverage should be evaluated early, particularly because insurance premiums can affect the borrower's total monthly housing payment and mortgage qualification.

Condo Eligibility — Condominium financing may require review of the condominium project in addition to the individual borrower and unit. Conventional, FHA, VA, and other loan programs can have different condominium requirements.

Homeowners Association Requirements — HOA dues and assessments can affect mortgage qualification and should be included when estimating the property's total monthly housing expense.

USDA Geographic Eligibility — Some properties in and around the greater Fairhope area may qualify for USDA financing. USDA eligibility depends on the specific property location as well as household income and other program requirements.

Manufactured-Home Requirements — Manufactured homes have additional requirements involving HUD certification, foundation and engineering documentation, title status, land ownership, and whether the home has previously been moved.

Acreage — Properties with substantial acreage may require additional review depending on the loan program, property use, improvements, and appraisal.

Private Roads — Homes accessed by a private road may require documentation establishing acceptable legal access and road-maintenance arrangements.

Well and Septic Systems — Properties that are not connected to public water or sewer may have additional well, septic, inspection, or property requirements depending on the mortgage program.

New Construction — Buyers building a home in Fairhope may have access to FHA, VA, USDA, or conventional one-time close construction financing. Conventional construction financing may also provide additional flexibility for custom homes with eligible features such as swimming pools, outdoor kitchens, garages, and other permanent improvements.

Property Condition — FHA, VA, USDA, and conventional loans have different property-condition and appraisal requirements. Identifying significant repairs before underwriting can help prevent delays.

Appraisal Considerations — Fairhope includes waterfront properties, Single Tax leaseholds, custom homes, acreage, new construction, condos, and other properties that may require additional appraisal analysis.

Because the property itself can determine which mortgage programs are available, Fairhope Mortgage recommends reviewing both the borrower and the property early in the process—especially when the transaction involves Fairhope Single Tax, flood insurance, a condominium, manufactured home, acreage, private access, or new construction.

The right mortgage strategy starts with both the borrower and the property.

BUILDING A HOME IN FAIRHOPE

Fairhope continues to have opportunities for new construction ranging from subdivision homes to highly customized properties.

Qualified borrowers may have access to one-time close construction financing through conventional, FHA, VA or USDA programs, depending on borrower and property eligibility.

Conventional construction financing may provide additional flexibility for custom homes that include eligible permanent improvements such as swimming pools, outdoor kitchens, extensive outdoor living areas, upgraded garages and other high-end features.

If you already own land in Fairhope, existing land equity may potentially be incorporated into the construction financing depending on the loan program and transaction.

See our One-Time Close Construction Loans page for additional information.

FIRST-TIME HOMEBUYERS IN FAIRHOPE

First-time homebuyers should not assume that a 20% down payment is required to purchase a home in Fairhope.

Depending on qualification and property eligibility, available options may include:

Conventional financing with a low down payment

FHA financing

VA financing for eligible borrowers

USDA financing for eligible borrowers and properties

Down payment assistance

The best option depends on credit, income, available assets, property type, location and long-term financing goals.

SELF-EMPLOYED HOMEBUYERS IN FAIRHOPE

Fairhope and Baldwin County have many business owners, independent contractors and self-employed professionals.

Being self-employed does not automatically require a specialty mortgage.

Many self-employed borrowers qualify for conventional, FHA, VA or USDA financing using tax-return income.

When traditional tax-return income does not adequately represent the borrower's cash flow, other programs may potentially include bank statement, 1099 and alternative-documentation financing.

See our Self-Employed Home Loans page for more information.

FAIRHOPE INVESTMENT PROPERTY LOANS

Fairhope and the surrounding Eastern Shore can also attract real-estate investors.

Available investment-property financing may include conventional mortgages as well as DSCR loans that qualify primarily using eligible rental-property income rather than the investor's traditional personal income.

See our DSCR Investment Property Loans page for more information.

FREQUENTLY ASKED QUESTIONS ABOUT BUYING A HOME IN FAIRHOPE

What is Fairhope Single Tax?

Fairhope Single Tax refers to the land-lease system associated with the Fairhope Single Tax Corporation. FSTC owns certain land in and around Fairhope and leases that land to lessees under long-term leases.

Is Fairhope Single Tax an additional tax?

The name can be misleading. “Single Tax” refers to the economic philosophy behind Fairhope's founding and the Corporation's land-rent system rather than simply being an extra tax charged to every Fairhope homeowner.

Is every house in Fairhope Single Tax?

No. Many properties in Fairhope are conventional fee-simple properties. Single Tax status is property-specific.

Can I get a mortgage on Fairhope Single Tax property?

Potentially, yes. Fairhope Single Tax properties have been mortgaged for many years. The lender needs to review the leasehold structure and applicable documentation and ensure the transaction meets the requirements of the selected mortgage program.

Do I own the land on Fairhope Single Tax property?

The Fairhope Single Tax Corporation owns the underlying FSTC land. The lessee holds a leasehold interest under the applicable lease.

How long is a Fairhope Single Tax lease?

The Fairhope Single Tax system has historically used 99-year leases. Buyers should review the current lease and transfer documents applicable to their individual property.

Will a lender outside Fairhope understand Single Tax?

Some will, but the structure is unusual. Using mortgage and closing professionals familiar with Fairhope Single Tax can help prevent misunderstandings and delays.

Can I use FHA, VA or conventional financing?

Potentially. Leasehold property can be eligible under multiple mortgage programs when the property, lease and transaction satisfy the applicable requirements.

Can USDA be used in Fairhope?

Some properties may potentially meet USDA geographic eligibility requirements. Borrower household-income and other USDA requirements also apply. Eligibility should be checked using the specific property address.

Do I need flood insurance in Fairhope?

Not every Fairhope property requires flood insurance. Whether flood insurance is required for a mortgage depends primarily on the property's applicable flood-zone determination and loan requirements.

Can I finance a new home in Fairhope?

Yes. Qualified borrowers may have conventional, FHA, VA or USDA construction-to-permanent options depending on the borrower, property and project.

WHY CHOOSE A LOCAL FAIRHOPE MORTGAGE COMPANY?

Mortgage lending is increasingly digital, but real estate remains local.

Fairhope has property issues that can be unfamiliar to lenders outside Baldwin County, particularly Fairhope Single Tax leaseholds.

Working with a Fairhope-based mortgage company means your lender understands the local market and can identify issues such as Single Tax, flood insurance, property eligibility and construction financing earlier in the process.

Fairhope Mortgage combines local market knowledge with access to multiple mortgage programs so borrowers can compare options rather than trying to fit every transaction into one loan product.

ABOUT THE AUTHOR

Tom Kalagher | Founder & Branch Manager, Fairhope Mortgage

Tom Kalagher is the Founder and Branch Manager of Fairhope Mortgage, LLC, based in Fairhope, Alabama.

Tom works with homebuyers, homeowners, real estate investors and real estate professionals throughout Fairhope, Baldwin County and the Gulf Coast. His mortgage experience includes conventional, FHA, VA, USDA, construction, down payment assistance, home equity, DSCR, self-employed borrower and manufactured-home financing.

As a Fairhope-based mortgage professional, Tom also works with transactions involving the Fairhope Single Tax Corporation and the additional leasehold, title and mortgage considerations that can accompany Single Tax properties.

His approach is to evaluate both the borrower and the property early in the process so potential financing issues can be identified before they create problems near closing.

Tom Kalagher — NMLS #2028566
Fairhope Mortgage, LLC — NMLS #2561450
Fairhope, Alabama
Phone: (251) 391-5618
Website: Fairhope-Mortgage.com

IMPORTANT

Mortgage eligibility depends on borrower qualification, property eligibility, appraisal, title, insurance, occupancy, loan-program requirements and underwriting. Fairhope Single Tax properties involve leasehold interests and additional documentation that must be reviewed for the specific transaction and mortgage program. Not every Fairhope Single Tax property or borrower will qualify for every mortgage program. Fairhope Mortgage does not provide legal or tax advice. This information is provided for educational purposes and is not a commitment to lend.