By Lisa Glauber Shippel, Esq.
Buying a home or taking out a loan for real estate comes with a lot of moving parts. If you’re feeling a little overwhelmed, you’re not alone. One of the biggest questions I get from clients is: “What do I really need to know before I borrow money in Georgia?”
The good news? You don’t need to figure it all out on your own. Here’s a breakdown of key loan requirements in Georgia, some options to help with down payments, and a new rule that could save you money on taxes if you’re borrowing for the short term.
Conventional Loans: The Most Common Route
Most homebuyers use a conventional mortgage, which is what you’d get from your typical bank or lender.
Here’s what lenders usually look for:
- A credit score of at least 620, but ideally higher.
- A down payment of 5–20% (you may qualify for as low as 3% depending on the program).
- If you’re putting less than 20% down, you’ll pay PMI (private mortgage insurance) until you build up equity.
- Your debt-to-income ratio (DTI) should be under 43%.
You’ll also need to provide standard documentation like pay stubs, tax returns, bank statements, and ID, so gather those early.
FHA Loans: More Flexibility, Especially for First-Time Buyers
FHA loans are backed by the government and can be easier to qualify for.
- Credit score as low as 580 with 3.5% down.
- Higher DTI ratios allowed (up to 57% in some cases).
- Mortgage insurance is required, both upfront and monthly.
- The property must meet specific conditions and safety standards.
These loans are a great option if you’re building your credit or don’t have a large down payment saved.
Georgia Dream Program: Help for First-Time Buyers
If you haven’t owned a home in the last three years, the Georgia Dream Homeownership Program is worth looking into.
- It helps with down payment and closing costs.
- There are income and purchase price limits based on where you live.
- You’ll need to take a short homebuyer education course and work with an approved lender.
- You must contribute at least $1,000 of your own funds.
This is a fantastic program that I recommend to a lot of clients, especially young buyers or anyone trying to get into their first home.
Construction Loans: Building from the Ground Up?
If you’re building a home or tackling a major renovation, you’ll likely need a construction loan.
Here are the basics:
- Higher credit score (usually 680+)
- 20–25% down payment
- You’ll need a licensed builder, no DIYs here
- The lender will do a special appraisal based on the finished value
These loans are a little more complicated, but manageable with the right team. I often work with builders and homeowners during construction closings to make sure everyone is protected.
NEW: A Tax Change That Can Save You Money
Let’s talk about something that can make a big difference at closing: Georgia’s Intangible Tax.
It used to be that any loan over 36 months in Georgia would trigger this tax, about $3 per $1,000 borrowed, and it’s paid when the loan is recorded with the county.
But here’s the update:
As of now, the state only requires an intangible tax on loans longer than 62 months.
So, if you’re borrowing for less than 62 months, no intangible tax applies.
That could mean real savings at closing, especially for investors, short-term financing, or buyers planning to refinance later.
This is something we’re watching closely for clients, and I always suggest bringing it up with your lender if you’re looking at short-term financing.