We live in San Diego and have been saving up to invest in our first property. The market here is obviously tough (and we'd like to invest here or nearby for several reasons), but we have heard about second home loans that have more favorable down payment and interest options which could increase our buying power and allow us to cast a wider net during our property search.

Understably this type of product would have to pass the sniff test. Considerations we've heard/read about are: distance to primary residence, location of the property in comparison to the primary residence (ie, if we live by the beach and we buy a property by the beach, it's likely not our vacation or second home, whereas living inland and buying in downtown or by the beach could be a more likely second or vacation home), and minimum timeframes for owner occupancy (like 14 nights if we eventually choose to do STRs there).

We live inland and if this does allow us to buy at a higher price point, we're open to looking in more tourist-y areas of the city. We are also really curious about the Big Bear area (in zones that allow STRs). Ideally, we're able to find a loan at 10% down, at or below current rates. Our thinking is, if we can put down lower and make the deal pencil at the higher rate, we can always refinance when rates drop, which we understand is expected in the fall/winter 2024. But even if they don't fall soon or enough, we'd be locked into our rate and can look to add value other ways until better refinancing scenarios present themselves.

Investors, have you used this type of product? If so, what was your experience?

Lenders, is this truly an option and if so, what are down payment percentages and interest rates you're seeing? And what are some of the parameters that we'd be required to meet (ie distance from primary residence, etc)?

"Second Home" Loans Options?

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