Second Home Loan Frequency

[Brook Davenport]

I’m assuming you can only have 1 second home loan at a time? I wanted to see what the frequency you could get the Fannie/Freddie second home/vacation loans with 10% down. 

[Jason Wray]

Quote from @Dee Shiozaki:

Quote from @Jason Wray:

Brook,

You can buy a Second Home/Vacation in multiple states you just cannot buy more than (1) second Home/Vacation home in the same general area.

My investors take advantage of the 10% down loophole and its really just a matter of upfront planning with your Banker to ensure there is a proper plan in place.  There is a little science behind the up front processing to avoid UW issues.

At the end of the day Vacation homes can still be rented out so it offers a 2 sided coin.  You just have to know how to set them up to avoid issues on the future UW/fundings.

Where does it say on fanny's site that they need to be In in different states ?

Dee-

 Good question, It does not say that specifically I am giving a better solution to the ability to use the loan program without issues.  There is a mileage requirement (typically 50 miles) and the  "Underwriters" use common sense that can and will question the intention of the second Home.  We can see the loans that you close on credit and the date it closed.  Most investors try and take advantage of the Primary Home, Secondary home program without concern.

When you buy too close in proximity and too soon in terms of sale date you trigger red flags.  If you purchased a second home in an a state like Florida on the East Coast, there is a reasonable explanation to buy on the West Coast or Jacksonville and then Cape Coral (Distance is key) but you need a reasonable explanation.  Typically the UW will ask for a letter of Explanation written to explain the reason.  

That letter will be placed in the file in case the file gets pulled for a QC or a Pre or Post Audit to detect mortgage fraud.  If you are trying to use the Second Home loophole you need to make sure you and your Banker/Loan Officer are on the same page.  You also have to make sure you do not use a loan officer that is new and has no seasoning.  That can cause you a denial and lost money on appraisals and other fee's if the loan is denied or cancelled.