Using 1031 for both rental AND vacation home

[Kevin Lisewski]

My lender is telling me 4 days out from closing that I can't use 1031 funds to buy a vacation home. Is that valid?

I sold a rental in March, and used over half the 1031 value to buy another rental, and planned to use the remainder towards purchase of a vacation home that we would also rent out from time to time.

Any advice? Lender is saying Fannie Mae won't accept a second home being partially funded by a 1031, because that makes it "seem like an investment property". I don't see what the funding source has to do with the intended use.

Advice welcome!

[Wayne Brooks]

@Kevin Lisewski Are you getting a “second home” loan or an “investment” loan? I suspect it is a “second home” loan and 1031’s Are for pure investments, so....”either you are lying on the 1031 documents Or you’re lying on this loan app” is their reasoning....which is not an unreasonable conclusion.