NC 10% Down Vacation Home Loan?

Question

I'm trying to find out if anyone has had luck finding a lender who will allow 90% LTV at a reasonable (less than 5.5%) rate on a second home/vacation home loan. My partners and I are trying to buy a house in Oak Island, NC and need to find a lender who will offer 90% LTV. We've spoken to a few mortgage brokers and it sounds like, due to recent Fannie/Freddie policy changes, the 10% down second home loan is starting to disappear as a loan product. Bonus points if the lender does not sell the loan to Fannie Mae/Freddie Mac for the reasons detailed above. Navy Federal and South State Bank are already on our list. Thanks!

Julia Taylor · Answer

In case anyone is looking for this info, I contacted both State Employees Credit Union & Coastal Federal Credit Union. Both do offer the 10% down vacation home loan but State Employees Credit Union has limitations on who can become a member (I don't qualify since I'm not a NC resident or state employee, etc).

Coastal however does not require you to be a resident of NC (or VA or SC, the other states they serve), and from what I've been told it's easy to become a member there. Thank you @Arthur Schwartz!

Kevin Tornes · Answer

@Julia Taylor Thanks for the update. We ultimately decided to go with South State Bank with a conventional loan, but we went with a 10/1 ARM instead of the 30 year fixed. We were able to get a rate of 4.875% at 90% LTV. We feel comfortable going the ARM route as they do have caps in place and the 10 years gives us flexibility to make a move to refinance or sell with plenty of time. The caps are a max of 5% added interest rate in yr 11 (9.875% total)/ max of 2% added interest rate in yr 12 (assuming the max cap has not hit) with a maximum cap of 9.875%.

Arthur Schwartz · Answer

State Employees Credit Union & Coastal Federal Credit Union

Jessie Dillon · Answer

hiii i'm closing on a second/vaca home loan with 10% down on friday. milestone mortgage solutions, vernon miles 774-836-3402

Julia Taylor · Answer

Mitch Davidson explained what's happening with the 10% down loan well in this thread I started: https://www.biggerpockets.com/...

Julia Taylor · Answer

@Patrick M.  CFCU had looser residency requirements than SECU. However, the number of points they require you to pay was absurd. I ended getting pre-approved for a 10% down vacation home loan with Movement Mortgage. No residency requirements that I know of and the time you use the home for personal use is non-specific. I’ll be happy to report back if we actually close on a home in NC with them.

Chris Carrigan · Answer

Movement Mortgage is a great company to do business with here locally.

Alice Chodkowski · Answer

@Kevin Tornes. Great info. I appreciate you sharing. I'm looking to do the same thing in the near future

Patrick M. · Answer

@Julia Taylor on SECU and CFCU - did either share what their residency requirements were? I'm trying to figure out how many days I can rent out a place per year while still spending 4-8 weeks per year there.

NC 10% Down Vacation Home Loan?

Most Popular Reply