San Francisco, CA · Member since 2014 · 161 posts · 26 votes
I am planning to buy a single family home in California. It is special because it has a vacation license in that city. However, I want to buy it with a residential loan and not a commercial loan (better rates and terms!). It is currently listed on VRBO with the seller so it is visible that it is a vacation renta to any bank. Can I buy it with a residential loan even though I would use it to do vacation rental (Airbnb/VRBO)? Or, I would need first rent it or live in it before I do vacation rental? If so for how long?
You said in your original post you intended to rent it as a vacation rental. You can not get a residential loan unless you intend to live there. If you lie and live there for a year then rent it out you might get away with it though. Plenty of investors do it that way. Some do not even stay as long as a year and their mortgage company never knows, but if caught it is mortgage fraud.
Matt Smith you can absolutely get a residential loan rather than a commercial.
If you are asking can you say it is your primary residence to either get a better rate or put lower down on it than it sounds like you already know the answer.
Just out of curiously where is the property?