Can I purchase a 'vacation home' without having a primary?

Question

After doing some googling, it the answer isn't very clear to this question: If I currently don't own a primary residence (just renting), can I purchase a vacation home that I visit 2 weeks out of the year for 10% down? I know it's considered a second home loan, but does it actually need to be my 'second' home?

The reason I'm asking is because I have a friend that's interested in purchasing a property in a different state (Kentucky or Florida) to use as a rental property. We're looking for ways to lower the potential downpayment. Would appreciate any suggestions

Eric Yu · Answer

I also helped a client secure a 2nd home before they had a primary. That said, I know a lender who can service a lot of west coast states (MACU) with a 10% down investment loan program. They don't service Kentucky or Florida, but there may be other credit unions in those areas with similar programs. Good luck!

Lyndsay Zwirlein · Answer

Yes you can! I did it myself personally last year.

Brett Deas · Answer

I know a few lenders who can help you with that. Feel free to reach out and I can send them to you.

Galen Ikonomov · Answer

You absolutely can. Reach out to an experienced broker, there are plenty of them here.

Raymond J. Rodrigues · Answer

@Asare Nkansah, you sure can. I’ve done it quite a few times for my clients buying here in Florida. You will just have to qualify with also counting your current housing expense(rent). Feel free to reach out with any questions! Always happy to share the knowledge.

Ryan Thomson · Answer

@Asare Nkansah Seems like that should work. I'd ask around for good investor-friendly lenders and then call the lenders to ask what can be done.

Kevin Hart · Answer

@Asare Nkansah Yes you can. You do not have to own your primary residence to do a "second" home loan. Your lender can clarify any details, but I believe it would have to be a short term rental property so that you could actually visit it throughout the year. Don't think it works with a LTR

Jacob St. Martin · Answer

I don't believe that this is possible. The reason is that for a second home loan/vacation loan, they are using the equity in your primary residence to secure the loan which allows for the lower down payment. Your only other options for a lower down payment are for one of you to house hack, BRRRR so that you are able to pull most or all of your capital back out, or find a private lender who will do loans with a lower down payment. There are also some lenders who will do DSCR products at 15% down but those have been harder to find since the interest rate hikes