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Specific Programs & Property Types
A one-unit property you occupy for part of the year and control yourself. It must be suitable for year-round use and cannot be primarily a rental or a timeshare.
Fannie Mae's occupancy rules (opens in a new tab) require a second home to be:
Lenders also look at whether the location makes sense as a second home, such as a vacation area or a reasonable distance from your primary residence.
Occasionally, yes. But rental income cannot be used to qualify for a second-home loan, and if you plan to rent the property most of the time it should be financed as an investment property.
Describing a planned rental as a second home to get better terms is occupancy misrepresentation, which is mortgage fraud. If rental income is a big part of your plan, look at investment property financing instead, including DSCR loans that qualify on the property's rent.
More than on a primary residence. Conventional second-home loans typically start around 10% down, and pricing adjustments and reserve requirements apply.
Fannie Mae and Freddie Mac set maximum loan-to-value ratios by occupancy and apply loan-level price adjustments to second homes, so the cost is higher than an equivalent primary-residence loan. Lenders also look for reserves: savings left after closing, measured in months of payments, and the requirement grows if you own several financed properties. See Fannie Mae's guidance on multiple financed properties (opens in a new tab).
FHA, VA and USDA loans are designed for primary residences, so most second homes are financed conventionally or, above the conforming limit, with a jumbo loan.
Some resort condos have hotel-style features or mandatory rental programs that make them ineligible for conventional financing, and rural cabins can raise appraisal and property questions. Review the details before you offer.
Condo projects with significant hotel or rental-pool characteristics, sometimes called condotels, are generally ineligible for Fannie Mae and Freddie Mac loans. See condominium financing for how lenders review a project.
For cabins and rural properties, lenders look at year-round access, water and septic, acreage and comparable sales. Portfolio and non-QM lenders can sometimes finance properties that fall outside agency rules, typically with larger down payments.
Sometimes. A cash-out refinance of your primary residence is another way to fund a second home purchase. Whether it makes sense depends on your current rate and the total cost both ways.
If your current mortgage rate is low, replacing it to pull cash out can cost more over time than a separate second-home loan. Frank can price both paths side by side. Run your own numbers with the refinance calculator and the payment calculator, then start a quote. Any figures before underwriting are estimates only, not a commitment to lend.
Sources: Fannie Mae Selling Guide B2-1.1-01: Occupancy Types (opens in a new tab); Fannie Mae Selling Guide B2-2-03: Multiple Financed Properties for the Same Borrower (opens in a new tab); Fannie Mae Selling Guide (opens in a new tab); Freddie Mac Single-Family Seller/Servicer Guide (opens in a new tab); CFPB: Loan Estimate explainer (opens in a new tab).
Education, not a loan offer. Program rules come from agency guidelines; lenders add their own requirements, and rules change. Not a commitment to lend.
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