Second-Home Loan on a Multifamily Property?

[Gabriel Hamilton]

Hey BP Community!

I'm scouting properties in upstate New York and found a great duplex. It has an existing long-term tenant in one unit and I plan to STR the second unit. My question is: can I get a second-home loan on a multifamily property?

I've run successful STRs in the past (and currently in other markets), I have a great FICO score, and my W2 income is good, but I've only ever heard of second-home loans on single family rentals. Thanks for your input!

[Ryan Hastings]

Hey Gabriel! Most of the second home loan programs I've seen specify that the property must be single family. However, if you find a really good mortgage broker they may know of some smaller local banks that might be flexible on that requirement. I've seen a handful of multifamily properties on lakes and other 'recreational areas' that are traditionally dominated by STRs, so I would think that a smaller local bank would be more willing to consider a multifamily in that second home loan program. One of the big things the lenders want to see is that you actually plan to be using the second home yourself, as an actual 'second home' from time to time. 

I'm assuming that you're looking into the second home loan because of the lower down payment? If so, have you considered trying to do a deal with creative finance? All of my lowest down payment deals have come from creative seller finance deals.