The Quick Read: One cash-out refinance secured by rentals in three states does not create one lien. It creates a separate recorded security instrument in each county where a property sits, and each state applies its own recording taxes to the same debt.
- A lien is recorded where the land is, so three states means at least three recording offices.
- Georgia, Florida and Alabama each tax the debt instrument at recording, and the cost is usually passed to the borrower at closing.
- Paying off the old loan does not clear the old lien. A recorded release does.
- The same total debt can cost different amounts depending on how the loan is papered.
- Title counsel, not the borrower, decides the tax base in each state. Ask for a per-state estimate before you commit.
How Does One Loan Become Three Recordings?
One note is signed, but each state gets its own security instrument, tax calculation and county filing. The loan cannot complete until every instrument is in recordable form and each state’s tax is collected. The steps below are Lendmire’s synthesis of how state rules fit together, not a single official procedure.
1. One note, several liens. The borrower signs one note. Each pledged property is then tied to the debt by its own security instrument.
2. The right instrument per state. Depending on the state, that instrument is a mortgage, a deed of trust, or Georgia’s security deed. Title counsel picks the form.
3. Value and debt are allocated. Appraised value or an allocated loan amount per property often drives the tax base in each state.
4. Each state’s tax is figured. The title or closing agent runs the numbers state by state. The lender is usually the party liable, and the cost is passed through at closing.
5. Every county records. Each county where land sits receives its instrument. Priority depends on recording.
6. Old liens are released. The prior lender’s release is recorded in each county where the old loan was a lien.
More instruments and more counties mean more title work. That is the real cost of a multi-state file: coordination, not complexity of the loan itself.
What Kind of Loan Puts Three States Under One Note?
A cross-collateralized loan does it. The industry also calls it a blanket loan or a portfolio DSCR loan, and all three names describe one note secured by several rentals. (A bank’s “portfolio loan,” meaning a loan the bank keeps on its own books, is a different thing.)
Lendmire’s wholesale network of DSCR lenders offers two structures for this:
- The 30-year portfolio DSCR loan. It covers 2 to 20 properties under one note, typically from $300,000 to $5,000,000. Coverage is measured on the pool, so rent is tested against pooled debt service and stronger properties can offset weaker ones. Interest-only periods are available.
- The rental portfolio term loan. It covers five or more rental properties or units under one loan, typically from $500,000 to $50,000,000. Terms run 3, 5, 7 or 10 years with a balloon at maturity. Recourse and non-recourse versions exist, and multi-market cross-collateralization is part of the design. Properties in several markets may sit under one loan. Small multifamily of five or more units is eligible only here.
Both structures share a few rules that matter on a cash-out:
- Leverage. Cash-out is capped at 75% of the pooled value, subject to lender guidelines. The structure’s own ceiling still applies.
- Seasoning. Cash-out generally expects about six months of ownership. Inside the first six months, the loan is also capped at 90% of total cost (purchase price plus documented improvements). That rises to 100% of total cost from six to twelve months, the leverage ceiling still applies, and the loan is the lower of the two. After twelve months, appraised value alone is the basis.
- Credit. The portfolio programs typically look for a 640 floor, with 680 or 720 on some structures.
- Entity. Some structures require a special-purpose entity, typically an LLC, subject to program terms.
- Property types. Single-family, 2-4 unit, condo and townhome are eligible. Owner-occupied, co-op, mixed-use and commercial property is not. Manufactured and mobile homes are not reviewable on these programs.
One property can sit below 1.00 coverage inside the pool. Underwriting tests the pooled coverage, the leverage and the terms. Clearing 1.00 on the pool is also not the same as positive cash flow. DSCR compares rent to the full monthly obligation of principal, interest, taxes and insurance, and repairs, vacancy and management sit outside it. For the broader mechanics, see the complete DSCR loans guide. Every figure here is a program range, subject to lender guidelines and individual underwriting.
Key Terms Defined
Note. The signed promise to repay the debt.
Security instrument. The recorded document that ties a property to the note. It is called a mortgage, a deed of trust or, in Georgia, a security deed.
Lien. The claim a lender holds against a property until the debt is paid.
Recording. Filing the instrument with the county office where the land sits, which makes the lien public.
Satisfaction or release. The recorded document from the old lender stating that the lien is cleared.
Cross-collateralization. Every pledged property backs the whole debt, not just its own share.
Priority. The order in which liens stand, which generally follows recording order.
Payoff Is Not Release
Paying off the old loan does not clear the old lien. The lien stays in the public record until a release is recorded. On a refinance, the payoff and the new recording happen at the same closing, but they are separate events. Both must show up in each county’s index.
An unreleased old lien can block a later sale or refinance. That is why the closing agent tracks release paperwork for every property being paid off, not just the new instruments. On a three-state pool, that means three sets of old releases and three sets of new filings.
Three States, Side by Side
The mechanics differ most in what the state taxes and how it treats collateral that sits partly elsewhere. Use the table as a map, and confirm each cell with title counsel.
| Factor | Georgia | Florida | Alabama |
|---|---|---|---|
| Instrument | Security deed | Mortgage | Mortgage |
| What is taxed | Long-term note | Debt, two taxes | Mortgage debt |
| Multi-state twist | Resident vs nonresident holder | Maximum-lien wording | State allocation order |
| Who pays | Holder, passed through | Lender exposed if unpaid | Passed through |
Georgia: Resident Holders and Apportionment
Georgia taxes long-term notes secured by real estate. Georgia Code § 48-6-61 caps the tax at $25,000 for any single note. What counts as “long-term” is a question for title counsel.
The Georgia Secretary of State rules address the multi-state case directly. If the note holder is a Georgia resident and collateral sits both inside and outside Georgia, the tax is computed as if all the property were in Georgia, subject to the cap. If the holder is a nonresident, the tax is $1.50 per $500 of principal, multiplied by the share of Georgia real property value in the total collateral. Values are certified under oath, and the cap is applied after apportionment. When property sits in more than one county, the tax is paid to each county of recording.
Two points trip investors up. The tax follows the note amount, not a purchase price. And the cap is per note, so how many notes exist matters.
Florida: Two Taxes and a Cap Trap
Florida stacks two taxes on a recorded mortgage, per Starfield & Smith. Documentary stamp tax is 35 cents per $100 of the debt. The nonrecurring intangible tax is 2 mills. If the mortgage limits recovery to less than the note’s face amount, the intangible tax is paid on that maximum lien. A standalone note has a documentary stamp cap, but a mortgage recorded in Florida has no such limit.
An out-of-state lender with Florida collateral must collect the tax at closing, or it may owe it when the instruments are recorded. Whether the tax attaches to the full note or only a Florida share on mixed collateral is fact-specific. Title counsel decides the base.
Alabama: A Department of Revenue Order
The Alabama Department of Revenue lists the mortgage tax at $.15 per $100 of indebtedness or fraction thereof. When a mortgage covers property both inside and outside Alabama, a county probate judges’ presentation explains that the Department of Revenue issues an order allocating the amount due to Alabama counties. The office collects only the Alabama share. It cannot collect tax for other states.
Where the General Rule Breaks
The rule of thumb says one loan means one set of costs. These cases break it.
- Georgia resident versus nonresident holder. A resident holder is taxed as if all collateral were in Georgia, up to the cap. A nonresident holder gets apportionment. The difference can be material.
- Florida maximum-lien language. Limiting the recoverable lien amount limits the intangible tax base.
- Adding collateral to an existing Georgia note. Practitioners sometimes discuss this as a way to avoid new tax if conditions are met. Treat it as a question for counsel, not a rule.
- Release and partial sales. Cross-collateral loans carry allocation and release mechanics. Partial releases, substitutions and a sale of one property follow the loan documents. The release price runs above the property’s allocated balance, and the remaining pool must still cover its debt service.
- Lender appetite. Some lenders avoid mixed-state pools and others treat them as routine. The network’s portfolio lenders vary, so a no from one source is not a no from every source.
The “no tax on mortgages in the Southeast” idea is also wrong. Florida, Georgia and Alabama each tax the debt instrument. And the cost is not borne by the lender in practice. The holder is liable by statute in some states, but the cost is commonly passed to the borrower by contract.
One Loan or Several? The Investor Decision
A single pooled loan trades the paperwork of several notes for the simplicity of one. Separate loans per property mean separate taxes, each figured on its own note. Georgia’s per-note cap and Florida’s cap-versus-no-cap difference mean the same total debt can cost differently depending on how it is papered. Present that as a structuring question for title counsel, not a conclusion.
The bigger tradeoff is risk. With cross-collateralization, a default can put every pledged property at risk. Investors who want each rental to stand alone often accept separate loans and extra paperwork. Investors with five or more rentals and a strong pooled coverage number often prefer one note. Lendmire’s piece Is One Portfolio Cash-Out Refinance Worth It for Five or More Rentals? walks through that call.
Before you commit, run this checklist:
1. Ask for a per-state estimate of recording taxes and fees.
2. Ask whether the mortgage will state a maximum lien amount.
3. Confirm how value is allocated across properties.
4. Get the release paperwork list for every old loan.
5. After closing, search each county index to confirm the new lien and the old release both appear.
6. If either is missing, call the closing agent right away and ask for the recording status.
Tax treatment varies; consult a qualified professional.
Frequently Asked Questions
Do I get one lien or one per state?
One per county where land sits. The loan is one note, but each property is tied to it by its own recorded instrument, so a three-state pool produces at least three recordings.
Does paying off my old loan clear the old lien?
No. The lien stays in the public record until the old lender’s release is recorded. The closing agent tracks that release for each property, and you should verify it appears in each county index.
Who pays the recording taxes?
By statute the holder is usually liable in several states, but the cost is commonly passed to the borrower by contract at closing. Ask for a per-state estimate in advance so the number is not a surprise.
Can a blanket loan really cross state lines?
Yes, on programs built for it. The rental portfolio term loan allows multi-market cross-collateralization, though lender appetite varies, and some lenders decline mixed-state pools.
Will rents that clear 1.00 mean positive cash flow?
Not necessarily. DSCR compares rent to principal, interest, taxes and insurance only. Repairs, vacancy, management and capital expenses sit outside the calculation, and pooled coverage lets one weak rental ride on stronger ones.
Next Step
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. Reach the team at 828-256-2183 or request a quote.
The recording cost in a multi-state pool is set by how the paperwork is drawn, so a more affordable structure is rarely the one that looks simplest on a term sheet.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR loans are evaluated by the lender on rental income rather than personal income, subject to lender guidelines — a fit for LLC-owned portfolios, self-employed investors, and operators scaling beyond conventional loan caps. Recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
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References
2. Georgia Secretary of State, Rules 560-11-8
3. Starfield & Smith, Florida documentary stamp and intangible tax refresher
4. Alabama Department of Revenue, Recordation Tax
5. Alabama Probate Judges Association, recording presentation
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Should You Use a Bank or a Broker for a Cash-Out Refinance? · Can You Cash-Out Refinance Right After Buying a House? · How the Appraisal Works on a Cash-Out Refinance
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.