5% Conventional Loans for Second Home/Investment Property?

[Luca Hillers]

My fiancé and I are looking to buy a second home to STR or a multi family property to begin renting out. Our credit and income are great, but our down payment is small relative to our area when considering having to put down 10-15%. I have heard there are tons of 5% down conventional loans on BP but every lender I've talked to says that's impossible. Can someone please point us in the right direction?

[Will Fraser]

Hi @Luca Hillers, and welcome to the BiggerPockets forums!

The problem here is that Conventional loans (on a primary residence) and Conventional loans on a secondary residence as two different things.  On your primary residence you can do 5% down, but on a vacation home you will need to do 10% or an alternative loan type (which almost certainly will not lower the down payment requirement).  

This 10% down program is actually an improvement over the 15-25% down that conventional lenders charge on other non-owner-occupied homes (like rental properties), so in that way it is a kindness to us would-be-vaction-home-owners.