| What it is | A mortgage on investment property qualified on the property's rent rather than the borrower's personal income |
| The formula | Qualifying monthly rent ÷ monthly PITIA = DSCR |
| Georgia assessment | 40 percent of fair market value, per the Georgia Department of Revenue |
| A rule that changed | House Bill 581 repealed the cap that set the prior sale price as the maximum fair market value, effective January 1, 2025 |
| Georgia recording cost | Intangible recording tax of $1.50 per $500 of the note, capped at $25,000 per note |
| Stonehaven’s role | A mortgage brokerage. Financing is arranged through third-party capital providers |
Short answer: a DSCR loan finances a rental property on the property's income rather than the borrower's personal income. The lender divides the rent it will count by the full monthly housing payment. If the result clears the program's minimum, and the rest of the file holds up, the loan can be made without the tax returns and debt-to-income calculation a conventional loan requires. In Georgia, two local items move the arithmetic more than investors expect: how property is assessed after a purchase, and the recording tax charged on the new note.
This guide is the hub for a series. It covers what the ratio measures, what Georgia adds, and where to go deeper on each piece.
What the ratio measures
For one-to-four unit rentals the convention is qualifying monthly rent divided by monthly PITIA, which is principal, interest, taxes, insurance and association dues. A ratio of 1.00 means the rent exactly covers the payment. Above 1.00 there is a cushion. Below it, the owner funds the difference each month.
Two words in that formula do a lot of work. Qualifying rent is not necessarily your rent: programs discount it by rule, and a lease above market on a purchase generally counts at the market figure instead. PITIA is the full payment, not just principal and interest, which is why taxes and insurance decide more Georgia deals than rate does. For the national picture, including how these loans are regulated as business-purpose credit, see DSCR loans explained.
What these loans are used for
- Purchases of long-term rentals, from single-family to fourplex.
- Rate and term refinances of existing investment debt.
- Cash-out refinances, covered for Georgia in equity, rent and net proceeds.
- Takeouts of bridge or renovation financing once a property is stabilized.
- Portfolio growth, because there is generally no fixed cap on the number of financed properties in the way agency rules impose one.
They are for investment property only. A DSCR borrower certifies they will not occupy the property, and misstating occupancy on a mortgage application is fraud, not a technicality.
Why the property's income does the qualifying
Conventional investor loans test the borrower: income documentation, a debt-to-income calculation, limits on financed properties, and title held individually at closing. That works well for a salaried buyer and poorly for a self-employed investor who legitimately minimizes taxable income, or for someone adding a sixth rental.
DSCR programs move the test to the asset. Personal income is not used. Credit, reserves and the property still are. Closing in an LLC is routine, usually with a personal guaranty. The tradeoff is price: DSCR financing generally costs more than a comparable conventional investor loan, which is why the right question is not which product is better in the abstract but which one your file actually fits.
Why requirements vary so much
There is no single DSCR rulebook. These loans are made by specialty lenders and funded by institutional capital, and each program sets its own minimums for coverage, leverage, credit, reserves and loan size. Two lenders can look at the same Georgia duplex and reach different qualifying rents and different maximum loans, honestly.
That is the argument for working through a brokerage rather than a single lender. Stonehaven is a mortgage brokerage, not a direct lender: financing is arranged through third-party capital providers, and the work is matching a file to the programs that actually fit it. Be skeptical of any source quoting you a universal minimum credit score, ratio or down payment. Those numbers exist per program, not per industry.
What Georgia adds to the arithmetic
Assessment, and a rule that recently changed
Georgia assesses property at 40 percent of fair market value, and one mill equals one dollar per thousand dollars of assessed value, per the Georgia Department of Revenue on property tax valuation and millage rates.
State law used to cap a property's fair market value for the year after a sale at the sale price. House Bill 581 repealed that cap effective January 1, 2025, and also requires appraisal of every property at least every three years, per the Department of Revenue's 2024 summary of enacted legislation. Your purchase price is evidence of value, not a ceiling on it.
The assessment caps you may have read about are homestead exemptions, which require the owner to occupy the property. The Fulton County homestead guide is explicit that these reduce assessed value on owner-occupied homes and renew only while the owner occupies as a primary residence. A rental gets none of them. Its remedy is the appeal, and Fulton allows 45 days from the date of the annual notice to file one. Practical takeaway: never underwrite a Georgia rental on the seller's current tax bill.
The intangible recording tax
Georgia charges a recording tax on instruments securing long-term notes, meaning notes where any principal is due more than three years out. The rate is $1.50 per $500 of the note's face amount, capped at $25,000 per note, collected by the clerk of superior court before the security deed is recorded, per the Department of Revenue. It scales with the loan, so it grows with leverage. Georgia's separate real estate transfer tax is the seller's liability by statute, though contracts frequently reallocate it.
Jurisdiction matters more than "Georgia"
Millage rates and zoning are set locally, and metro Atlanta contains many jurisdictions with very different numbers and rules. That is worked through in financing a duplex, triplex or fourplex in metro Atlanta.
A hypothetical worked example
Assumptions, all hypothetical: a single-family rental in unincorporated DeKalb County, purchase, price and value $280,000, loan $210,000 at 75 percent loan-to-value, market rent $2,400 a month, hazard insurance $150 a month, no association dues. Illustrative rate of 7.25 percent, 30-year fixed, which is not a quote and is not available.
Taxes are computed rather than assumed. Forty percent of $280,000 is $112,000 of assessed value. At the published unincorporated DeKalb total of 44.090 mills from the county's 2026 millage schedule, that is $4,938.08 a year, or $411.51 a month.
| Step | Figure |
|---|---|
| Qualifying rent | $2,400.00 |
| Principal and interest | $1,432.57 |
| Taxes and insurance | $561.51 |
| Full monthly payment (PITIA) | $1,994.08 |
| DSCR | 1.20x |
| Down payment | $70,000 |
| Georgia intangible recording tax on the note | $630.00 |
The ratio clears with room. Note how much of the payment is not principal and interest: more than a quarter of it is taxes and insurance, neither of which falls when you borrow less. That is why Georgia deals are frequently decided by the tax line rather than the rate. And a reminder the formula cannot give you: rent minus PITIA is not cash flow. Vacancy, management, maintenance and capital reserves come out of the same rent.
When to use the calculators
Two public tools, for two different questions.
- Use the DSCR Program Calculator when you know the loan amount you want and need the ratio a program would actually compute, including unit-by-unit qualifying rent for multiunits, short-term rentals, condotels and five-to-eight unit buildings.
- Use the DSCR loan calculator when you want to size a loan against a target ratio on a simple one-to-four unit rental.
A field-by-field walkthrough of both is in how to use a DSCR calculator. Neither tool is an approval. They are the same math the desk runs first.
The process, start to finish
- Run your own numbers. Value, rent, taxes computed forward, an insurance quote, and the loan you want.
- Scenario review. A specialist confirms which programs consider the file and what the real constraints are. No credit pull at this stage.
- Application and credit. Entity documents if you are closing in an LLC.
- Appraisal with a rent schedule. This sets both the value and the qualifying rent, which is why it decides more files than anything else. See which rent counts.
- Underwriting, then closing.
Because there is no personal income file to verify, a complete and well-organized file generally moves faster than a full-documentation loan. Timelines still depend on the appraisal, title, the lender and the market, and nobody can promise one.
Mistakes to watch for
- Using the seller's property tax figure instead of a forward-looking one.
- Adding up advertised rents rather than qualifying rents.
- Forgetting the intangible recording tax in a closing budget.
- Taking maximum leverage at a ratio barely above the minimum, so an insurance quote can sink the file. See down payments and LTV.
- Assuming a no-ratio program will be available. Some exist, some do not. If your ratio is short, start with restructuring.
- Treating a passing ratio as proof of a good investment.
The first of those is the most common and the most expensive, because it surfaces at underwriting rather than at offer.
Frequently asked questions
Do I need tax returns for a DSCR loan in Georgia? Personal income documentation is generally not used to qualify. Credit, reserves, entity documents and the property are still reviewed. Requirements vary by lender.
Can I close in an LLC? Commonly yes, usually with a personal guaranty from the members. It is one of the main reasons investors use these programs.
What ratio will I need? It depends on the program and the property type. There is no single industry minimum, and we would not quote one without seeing the file.
Does Stonehaven lend directly? No. Stonehaven Lending is a mortgage brokerage. Financing is arranged through third-party capital providers and remains subject to their underwriting.
Is this available outside Georgia? Business-purpose DSCR financing is arranged more broadly, with availability varying by state and program. Residential consumer-purpose lending is licensed state by state.
How is a first rental treated differently? Some programs apply overlays to investors without a track record. That is covered in can a first-time investor get a DSCR loan in Georgia.
Next step
Run your property through the DSCR Program Calculator with a tax figure you computed rather than inherited, then send us the purchase price or value, the rent, the loan amount you want, and your estimated taxes and insurance so we can review the structure. A deal review comes back from a specialist, with no credit pull at that stage. Product background is at DSCR loans for rental property.
County records and taxes for a Georgia rental
Georgia's homestead guidance ties the standard exemption to the owner's primary residence. For a rental acquisition, have the county review the proposed ownership and use instead of assuming the seller's exemption remains. Confirm city, county and school components against the same parcel record so the calculator's tax line represents the property being financed.
State reference: Georgia Department of Revenue: homestead exemptions.
Documents and questions for this property review
Assemble the parcel identification, county account, current exemptions and any separate city or school charges. Ask which amounts reflect the proposed rental ownership. Reconcile that total with the tax figure entered in the DSCR calculator, and retain the supporting record so later quotes use the same expense assumption.
A property review example
Hypothetical planning example, not a completed transaction. An Atlanta-area investor compares an occupied rental with a residence being converted to investment use. Build a tax file for each, verify association obligations and obtain independent insurance quotes. Then use the DSCR tools to distinguish a lender's qualifying ratio from the cash remaining after vacancy, management and maintenance.
Can a Georgia rental buyer rely on the seller's homestead tax bill?
Use it as historical information, then ask the county to review the proposed ownership and rental use. The loan analysis needs a supported estimate for the buyer's situation.
Review the program-specific calculation using supported rent and the reconciled tax estimate.
Request a property scenario review
Stonehaven Lending is a mortgage brokerage arranging business-purpose DSCR financing nationwide, with availability varying by state, property, lender and program. Request a DSCR review with the property location, legal unit count, intended use, purchase or refinance goal and available rent and expense records.
Turn Georgia context into review questions
Identify the county, the source of the tax figure, and the date of the insurance estimate. Ask whether those amounts reflect the expected position after purchase. Keep the operating budget separate from the amounts used for qualification: a DSCR ratio is not a complete return projection.