How to finance primary residence/rental property?

1 Reply

Good Morning,

I have a unique situation on my hands. I am going to be purchasing a home in Galveston Texas that I plan on renting out as much as it can be rented. But I also plan on going to the home when I am off work to enjoy it myself. Now my dilemma is how to go about financing it.

I am a merchant mariner so I am only home about 4 months a year right now. I do not currently own a home. So I am having a little trouble getting clarity as to how I should finance this home. Can you use an FHA loan and rent the home out as a vacation rental? Or would that be considered mortgage fraud? My situation is unique because I really am only home about 4 months a year. I am also considering an investment loan, but being only 24 I am not sure I will be able to get one. I have the money to put down and a great credit score, but do not have the credit history I think I will need. Not to mention with an investment loan I have read you can only spend 2 weeks at the home and when I am home I would like to spend a decent amount of time there.

Another note, I have my primary residence with my parents. I can leave it as it is if that is of any assistance.

Any suggestions of how to go about this would be greatly appreciated.



Good morning,

My parents actually did something similar here in Galveston. My mom is retired and has been traveling a lot with my dad since he is a pilot. Since they spent most of the time when they were state side in either Galveston or College Station, they bought a duplex here in Galveston and rented out the bottom. Even though she’s not here year around, it is perfectly legal to have as an owner occupancy.

Now she rents out another unit in the house. This is different than renting out via AirBnB. I definitely wouldn’t recommend going FHA as then it becomes a federal issue. You could do a conventional loan as owner occupancy but you’d still be in a grey area. Technically it would be your sole primary residence so you’d be good there but you’d also be renting it out so it’s quasi investment. I know of people that have done this with properties. It’s not that I condone it but it does happen. If you could find a property that is multiple units or better yet has a garage apartment you’d be set. You can easily have the garage apartment as your primary residence while you rent out the front house. You can still use the front house when it’s not occupied if you need the space.

There are ways to work with your situation. You just need to be smart about it. If you need a local lender for the loan, I have some great contacts I’d be happy to send you. Feel free to reach out to me via email or my cell.

Have a great day!