Can you use 2nd Home as LT Rental?

[Susanne Owens]

So my realtor has proposed the questIon, we have obtained a loan. I described what we wanted to do by purchasing a home out of state to our mortgage lender and she said we should go with ______loan because of interest rate, APR. I told her we may do long term rental with it and we were leaning that way. So here’s the dilemma, realtor calls 1 day before closing and says, “I’m advising you that if you buy this house and plan on it being a LT rental but have the loan as a second home and not as an investment loan then you could be committing mortgage fraud” and she doesn’t want any part of it. Any advice???