All Forum Posts by: Jeff Chisum

We can use income filed under Sched E once it shows up on a tax return.  Bonus depreciation doesn’t count against your income calculation.

Would love to visit sometime.  I have a unicorn 10% down loan your clients would be interested in.

10% down second home occupancy loan in destination areas stick with One Unit SFR and Town Homes. This typically will not vary by lender.

15% down for condos/condotels in destination areas.  Will vary by lender.

You can do a condo in destination areas with DSCR. Typically need to be prepared to put down 25-30%. SCR 1-4 units and Town Homes 20% down for an experienced investor, 25% down for new investors. Will vary by lender.

I have clarification that it is now allowed for the transfer of title into an LLC that you are the majority owner of (borrower(s)) without any seasoning period if you used the second home occupancy loan. You have to attest (which you did when you took out the loan) that it will remain a second home for at least the first year of ownership. Safeguards- You will want to verify the loan was sold or will be sold to Fannie Mae, Freddie Mac or the Federal Home Loan Bank.

Clarification. When using the Fannie/Freddie/Federal Home Loan Bank second home occupancy loan and you transfer title within the first year to an LLC that the borrower is majority owner of it will not trigger the due on sale clause as long as you can attest that it will continue to be a second home.

Thank you for the feedback and question! My clients get a homeowners policy with a STR rider or go with a policy through a company like Proper Insurance that specializes in STR. To try and set up a landlord policy prior to closing or even shortly after closing would not be recommended. After the first year you are released from the occupancy commitment and you could place the property under a landlord policy without problems. You would just want to make sure the carrier is ok with short term rentals.

@Michael Baum I double checked with a CPA that specializes in working with STR investors and he said there was no distance/mileage requirement from your primary.

I’m going to bet that most originators are not going to know the policy. As stated previously make sure you have a Fannie/Freddie or Federal Home Loan Bank loan…which if you are going with a 10% down second home occupancy loan there is a 95% chance. If you are shopping lenders that would be a question to ask. Most people undervalue working with an expert or just don’t know the importance. They just want to shop rate.

@Jon Martin people do get tripped up by this. By listing and accepting bookings year round for the first year doesn’t take away your ability to occupy the property when you want to. Technically it’s available for you to occupy 365 days. After the first year you are released from any restrictions.

@Andrew Steffens agree with all. We have physician clients that work in the suburbs that need to buy something close to their hospital in the case of bad weather or they need to be close to the hospital. When not there they rent it out on a short term basis.