Using 2nd home / vacation home mortgages on rentals

[Sean L.]

I was chatting with a coworker regarding rental properties. He mentioned financing the rental as a second home rather than an investment property would result in better terms from lenders. while this is obviously true and I would prefer those terms, I couldn’t help but feel like there would be some time of fraud risk if I went this route.

Can anyone speak to using a 2nd home or vacation property mortgage on what is intended to be a rental? For context, the property is located near my hometown where I no longer live and is a currently occupied duplex, one lease one M2M. I believe there is a story that could be spun, including using the property as a home base when visiting family and letting the M2M lease roll off, but I don’t know if it’s worth it.