DSCR Loans in Georgia: Taxes, Insurance and Cash to Close

A version of this question shows up in my inbox all the time. An investor has a Georgia rental under contract, the numbers worked in a national calculator, and then the closing figures come back higher than expected. Or the DSCR that looked comfortable on paper slips under the lender's minimum once real taxes and insurance get plugged in.

Usually nothing is wrong with the deal. The calculator just didn't know it was in Georgia.

Do DSCR loans work the same in Georgia as everywhere else?

Mostly, yes. A DSCR loan is still a business-purpose loan on a non-owner-occupied rental, qualified on the property's rent against its full housing expense: principal, interest, taxes, insurance and any HOA dues. Credit, reserves and appraisal work the way they do in any other state. If you want the basic mechanics first, this step-by-step DSCR walkthrough covers them.

What's different is the inputs. Georgia has two closing-table taxes that some states don't have, a property tax system that can hand you a very different bill than the seller paid, and coastal insurance that can wreck a ratio. Generic calculators tend to skip all of them.

The Georgia closing costs national calculators miss

Intangible recording tax on the security deed

In Georgia, the lender records a security deed instead of a mortgage, and that recording carries an intangible recording tax. Per the Georgia Department of Revenue, the rate is $1.50 for each $500 (or fraction of $500) of the note's face amount, with a cap of $25,000 on any single note. That works out to $300 for every $100,000 you borrow.

The DOR page says the lender can pass the tax on to the borrower, and in practice it shows up on your side of the closing statement. It also says the tax can't be treated as a finance charge on the loan. So it's a cash-to-close item, not a pricing item.

A lot of BRRRR investors haven't caught the next part yet. House Bill 586 changed what counts as a "long-term note." Under DOR Informational Bulletin 2025-02, starting July 1, 2025, the tax applies only when some part of the principal comes due more than 62 months out (it used to be three years). A short hard-money loan typically matures well inside that window, so your original acquisition closing may not have shown this tax at all.

A long-term DSCR loan matures far past 62 months, so it's taxable. The edge case is a DSCR or commercial note with a balloon that comes due within 62 months, which is treated as short-term and avoids the tax. If that's your structure, have the closing attorney confirm it. I've seen investors anchor on their hard-money settlement statement and then get surprised on the refinance. Budget for it.

Transfer tax on the deed

The real estate transfer tax is $1 for the first $1,000 of the sale price and 10 cents for each additional $100 (or fraction). Call it $1 per $1,000. The DOR says the seller is liable for it, though the parties frequently agree in the contract that the buyer pays. Read your contract before you assume it's the seller's line.

On a refinance there's no deed transfer for value, so there's generally no transfer tax. O.C.G.A. 48-6-2 exempts instruments given to secure a debt.

For everything else that lands on a DSCR closing statement (title, appraisal, lender fees, prepaids), see what to expect on DSCR closing costs.

Will my Georgia property taxes go up after I buy a rental?

This is the one that actually moves the ratio, and it's the one I'd spend the most time on.

Georgia assesses real property at 40% of fair market value, per the DOR's property tax valuation page, and local millage rates apply to that assessed figure. Taxes are charged against the owner as of January 1.

The listing's tax history tells you what the seller paid. If the seller lived there, they likely had a homestead exemption, and possibly years of capped value behind it. HB 581 created a statewide "floating" homestead exemption that limits annual assessment increases on homesteaded property, though it doesn't apply everywhere because local governments could opt out by March 1, 2025. Where it does apply, the House Budget and Research Office's HB 581 brief is clear that the base year resets when a home is sold. A rental isn't your homestead, so you don't get that protection going forward either.

HB 581 also requires every parcel to be appraised at least once every three years. So even if the county doesn't catch your purchase right away, it will get to it.

Older guides (and some still being published) say Georgia caps next year's fair market value at your purchase price. That rule is gone. HB 581 deleted that sentence from O.C.G.A. 48-5-2 effective January 1, 2025, and the current statute annotations reflect the repeal. Some older and secondary sources just haven't caught up, so don't build your underwriting on that cap. Call the county tax assessor (Fulton, DeKalb, Gwinnett, Chatham, wherever you're buying) and ask how they'd value the parcel after a sale.

What I do on Georgia files is ignore the seller's bill and estimate from scratch. Underwriters often do something similar, which is why a DSCR can drop between pre-approval and final approval.

Insurance in Georgia: coastal counties and the wind/hail deductible

I'm not going to quote you statewide premium trends, because they vary too much by county, roof age and carrier to be useful from a blog post. What I can tell you is how insurance tends to break files.

Near the coast (Savannah, Tybee, the Golden Isles), carriers may write a separate wind or hail deductible, sometimes set as a percentage of dwelling coverage instead of a flat dollar amount. Some lenders have maximum deductible rules. A cheap quote with a deductible the lender won't accept isn't a cheap quote. Flood zone status matters too, and the appraisal and flood certification will settle that question whether you checked it or not.

Get a real landlord policy quote (not a homeowner policy) before you finalize your offer. If you have questions about a Georgia carrier or a policy, the Georgia Office of Insurance and Safety Fire Commissioner is the state regulator.

Can I use a DSCR loan for a short-term rental in Atlanta or Savannah?

Often, yes, but expect questions. Atlanta, Savannah and Tybee Island each regulate short-term rentals locally, and the rules (permits, registration, where STRs are allowed at all) change. I won't summarize them here because a stale summary is worse than none. Check the city's own STR page for the specific address before you buy.

On the lending side, if you're qualifying on short-term rental income, the underwriter wants to know the property can legally operate that way. An unpermitted or non-permittable STR can push a lender back to long-term market rent, which may not cover the payment. Our STR DSCR guide covers how lenders figure short-term income.

Security deeds and foreclosure: why lenders are comfortable in Georgia

Georgia lending runs on the security deed. In plain terms, the borrower conveys title to the lender as security until the debt is paid, and Georgia security deeds typically include a power of sale. That lets a lender foreclose through the process set out in Title 44 rather than through a lawsuit, subject to the state's notice and advertising requirements.

From where I sit, that's part of why non-QM investors are generally willing to lend here. A process that lenders view as predictable tends to support appetite for a state. I'm not going to put a number of days on it, because the actual timeline depends on the deed, notices and any borrower filings. If foreclosure procedure matters to your decision, a Georgia real estate attorney is the right call.

Worked example: a $300K Atlanta-area rental with Georgia numbers

Say you're under contract on a single-family rental in Gwinnett for $300,000. This is an illustration, not a quote.

Transfer tax on the deed is $1 for the first $1,000 plus 10 cents on each of the remaining 2,990 hundreds. That's $300. Seller's by default, yours if the contract says so.

Intangible recording tax on your security deed runs $300 per $100,000 of loan amount. Plug in your real loan figure, and round each partial $500 up.

Property tax is where it gets interesting. At a $300,000 fair market value, the assessed value is $120,000. Every mill of combined millage costs $120 a year on that assessment. Pull the actual county, city and school millage for the parcel and multiply. Then compare that to the seller's last bill. If the seller had a homestead exemption and an old base value, your number may be meaningfully higher.

Now rebuild the DSCR with that tax figure and a real landlord insurance quote, not the listing's numbers. You can run it in the DSCR calculator. If the ratio only works on the seller's tax bill, it doesn't work.

How do I refinance out of hard money in Georgia?

The Georgia-specific pieces are the ones above. No transfer tax on a straight refinance. The intangible recording tax on the new long-term note is usually yours, even if your hard-money loan avoided it. Some refinances with the same holder have partial relief on the unpaid balance, so ask the closing attorney, but if you're moving from a hard-money lender to a DSCR lender, I'd plan on paying it on the full new note.

Reassessment timing matters too. If your rehab pushed the value way up, the county may catch it, and your next tax bill could reflect the improved value. Underwriting should use a realistic figure for that.

Seasoning, appraisal and cash-out rules aren't state-specific. The hard money to DSCR refinance guide walks through them.

Georgia DSCR checklist before you apply

• A new property tax estimate from the parcel's millage and 40% of value, not the seller's bill
• A landlord insurance quote with the wind/hail deductible spelled out
• The intangible recording tax on your expected loan amount
• Who pays transfer tax under your purchase contract
• STR permit status from the city, if you're using short-term income
• A call to the county assessor if you're unsure how the sale will affect value

If you've already run these and want to see whether your Georgia deal clears, take the qualifier quiz and I'll look at it with Georgia numbers, not national ones.

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Tanner Cook is a licensed mortgage loan originator (NMLS #2090424). This content is for informational purposes only and does not constitute financial advice. Loan approval is subject to credit and property qualification. Equal Housing Lender.