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!