"Second home" mortgages

4 Replies

My first property was a "second home" mortgage with 15% down. I've since refinanced that loan and bought additional properties with standard 20%-down "investment" mortgages. The question is, when (if ever) can I say, "This property is no longer a second home, it's an investment" and then get a new "second home" loan on a new property purchase? (Note: I already know I can get another "second home" loan in a different geographical location. I am talking here about multiple properties in a single small area). I guess I'm trying to "recycle" my second home low-down-payment benefit and use it again.

If you refinanced this as an owner occupied you must occupy the residence for one year. If it was refinance as a Second home you must maintain the availability to live in it for 1 year. This is where people will use it as a STR and schedule themselves 14 days to live in the home as well to meet occupancy requirements.

A Second home with Fannie Mae requires 90% LTV or 10% Down whereas a 1-unit Investment property is 85% LTV or 15% Down. A Second home is restricted to a 1-unit, while an investment property for 2-4 unit would be 75% LTV or 25% Down.

20% Down is generally considered "The Down Payment" because it will remove the need for Mortgage insurance and lower your monthly payment.

Please See below for the requirements for a second home.


Best of Luck!

Promotion
BiggerPockets
The one-stop-shop for REI
Find Local Home Improvement Pros!
Check out our network of trusted, local contractors for all of your home improvement projects.
Find a Contractor
So if you stay in the place for 14 days can you then legally rent it long term afterwards even if the year is not up?

Originally posted by @Torrell Palmason:

If you refinanced this as an owner occupied you must occupy the residence for one year. If it was refinance as a Second home you must maintain the availability to live in it for 1 year. This is where people will use it as a STR and schedule themselves 14 days to live in the home as well to meet occupancy requirements.

A Second home with Fannie Mae requires 90% LTV or 10% Down whereas a 1-unit Investment property is 85% LTV or 15% Down. A Second home is restricted to a 1-unit, while an investment property for 2-4 unit would be 75% LTV or 25% Down.

20% Down is generally considered "The Down Payment" because it will remove the need for Mortgage insurance and lower your monthly payment.

Please See below for the requirements for a second home.


Best of Luck!

I would not recommend LTR, as the Second home must be suitable for year round occupancy and if you have a tenant it is no longer suitable for you to live in it. I know many people use a Second home as a STR and schedule 14 days to live in the home.

Best of Luck!