The Federal Rule That Classifies Your Loan, and the Georgia Taxes That Sit on Top
Program and regulatory figures verified October 10, 2026. Details change; confirm your scenario with us.
The federal layer is the same everywhere. What makes it worth a Georgia page is what it does not cover.
The rule, verbatim
Fannie Mae Selling Guide B2-1.3-02, under "Refinances to Buy Out An Owner's Interest":
"A transaction that requires one owner to buy out the interest of another owner (for example, as a result of a divorce settlement or dissolution of a domestic partnership) is considered a limited cash-out refinance if the secured property was jointly owned for at least 12 months preceding the disbursement date of the new mortgage loan. All parties must sign a written agreement that states the terms of the property transfer and the proposed disposition of the proceeds from the refinance transaction."
★★ Limited cash-out and cash-out are priced and underwritten differently. ★ We publish no rates or payment figures, so we will not put a number on it.
★★★ The two conditions, precisely
- ★★★ Twelve months of joint ownership, to disbursement. Not application. Not length of marriage. Not occupancy. It is a title test, and the deed answers it. Falling short does not prevent the loan. It reclassifies it as cash-out.
- ★★★ A written agreement signed by all parties covering both the transfer terms and the "proposed disposition of the proceeds from the refinance transaction." A decree awarding the house and silent on where the refinance money goes satisfies the first and not plainly the second.
★★ Both are cheap to fix in a draft and awkward afterwards, because the second one needs your former spouse's signature again. The short version for counsel.
★★ The on-title exception
Selling Guide B2-1.3-03: "There is no waiting period if the lender documents that the borrower… was legally awarded the property (divorce, separation, or dissolution of a domestic partnership)", displacing the usual six-month requirement, and the twelve-month seasoning of the loan being paid off "does not apply… when buying out a co-owner pursuant to a legal agreement."
★★ Note the asymmetry: one provision imposes a twelve-month joint-ownership condition, another removes a six-month on-title wait. Different questions, routinely merged into one wrong sentence.
★★★ And what it does not reach, which is the Georgia point
The agency rule governs how the loan is classified. It says nothing about Georgia's own charges, and Georgia has two:
| Tax | Rate | Note |
|---|---|---|
| ★★★ Intangible recording tax: on the note | ★★★ $1.50 per $500 of face amount = 0.30% | capped at $25,000 |
| Real estate transfer tax, on the deed | $1 for the first $1,000, then 10 cents per $100 = 0.10% | ★ the seller is liable |
★★★ The intangible recording tax is charged on the face amount of the note, the very loan the agency rule is busy classifying, at 0.30%. A perfectly structured limited cash-out still pays it. The detail, and why we assert no exemption.
★★ So a Georgia buyout has a federal question (how is the loan classified?) and two state questions (what is taxed, and at what rate?), and they are independent. Getting the federal one right does not reduce the state ones.
★ Where it applies
These are agency requirements, so they govern loans delivered to Fannie Mae. All 159 Georgia counties sit at $832,750, and the dearest Georgia metro is $402,000: so a typical Georgia buyout is comfortably inside agency territory. The limit.
★ Read 2026-10-10; agency requirements change and carry lender overlays.
Mike Certo, NMLS #260555. (480) 296-6513 · mcerto@cfmtg.com.
Frequently asked questions
Is a Georgia divorce buyout a cash-out refinance?
Under Fannie Mae's rule it is a limited cash-out refinance rather than a cash-out, if the property was jointly owned for at least 12 months preceding the disbursement date and all parties sign a written agreement stating the terms of the transfer and the proposed disposition of the refinance proceeds.Does the agency buyout rule reduce Georgia's taxes?
No. The Fannie Mae rule governs how the loan is classified and underwritten. Georgia's intangible recording tax on the note and real estate transfer tax on the deed are separate state charges, and a correctly structured limited cash-out still pays them.Do I have to wait six months on title to refinance after a Georgia divorce?
Not if you were awarded the property. Selling Guide B2-1.3-03 states there is no waiting period where the lender documents that the borrower was legally awarded the property through divorce, separation or dissolution of a domestic partnership.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about mortgage financing during and after a divorce. Not a loan commitment, and not legal, tax or financial advice. Cornerstone First Mortgage is a lender; it is not a law firm, does not represent any party to a divorce, does not make attorney referrals, takes no position on how property should be divided, and gives no advice on whether to demand a jury trial. Georgia property division is governed by the Official Code of Georgia Annotated and by case law and is applied by the superior courts; the intangible recording tax and the real estate transfer tax are administered by the Georgia Department of Revenue and collected by the clerk of the superior court, and homestead exemptions are administered by county tax officials. Agency requirements described here are Fannie Mae Selling Guide provisions current as of the date shown and are subject to change and to lender overlays. Housing market figures describe the twelve months to August 2026 and are not a forecast. All loans are subject to borrower, property and program qualification.