Str Insurance and second mortgage

[Kaitlin Mallory]

Are there any issues using an str policy such as Proper Insurance and having it sent for escrow to my lender if the original loan was intended as a 2nd loan vs str? Is this somehow a violation of terms

[Pierre Guirguis]

This is less about the insurance carrier and more about your loan documents. If the original loan was underwritten as a second home and not an investment property, most lenders have occupancy and use clauses in the note. Converting to short-term rental without notifying them can technically violate those terms, even if payments are current. Escrowing an STR policy itself isn't usually the issue. The issue is whether the lender permitted short-term rental use under the loan agreement.

Before making any changes, I’d review:
- The occupancy language in your note
- Any rider related to second home use
- Whether short-term rental activity is restricted

If there’s ambiguity, it’s better to clarify with the lender than assume it’s fine.