Vacation home as a primary residence?

Question

I'm looking to buy a vacation/rental home and trying to figure out how to finance it.  Am I able to buy it with an FHA loan to put only 3.5% down if my actual primary residence is in my wife's name?  I have no real estate on my credit at all, so would I be able to apply for an FHA loan in just my name for this as my "primary residence"?

Matthew Wolk · Answer

No.  If you are on an FHA loan, you would need to live in the home as your primary residence for at least a year.  If you bought the house and immediately rented it out, that would be mortgage fraud.

Katherine Blazer · Answer

Everything Paul said is correct. You will need to qualify for the mortgage PITI with your income. You cannot use any projected rental income to qualify for the loan. There are also radius requirements to how close it can be to your primary residence.

Riley S. · Answer

I bought a home that I had hoped to live in, but due to circumstance I actually don't live there full time and have just kept it as a vacation rental. I got the loan as a primary residence with 3% down and just waited a year before renting it. I also don't have any other mortgages in my name, and I haven't run into any problems. I think you'd be fine with classifying it as primary residence and waiting to rent for a full year. You get into mortgage fraud trouble if you buy as primary and then list it for rent right away.

Lyndsay Zwirlein · Answer

The lowest money down option is a vacation/second home loan which allows for a max LTV of 90%.  You will be required to sign an occupancy affidavit at closing to verify. With the market tightening, it is my understanding fannie/freddie are checking on this more closely than ever.

Mason Hickman · Answer

@Michael Furey

Definitely do not do this. It is mortgage fraud to get a loan for a primary and rent it out, especially with a federally backed program! Look into banks that offer 10% down vacation/second home loans. Typically, they will require you use the property at least 14 days per year. Your intention in getting a vacation home also needs to be to use it for your own use and the rentals are supplemental.

Jonathan Taylor · Answer

@Michael Furey 10% down on second/vacation homes @Paul De Luca is right assuming you qualify with Income/DTI etc

Having your wife and you on the loan would help to utilize her income as you MAY (not 100% on this) not be able to buy a second/vacation home without a primary.

Paul De Luca · Answer

I believe there is financing available for 2nd homes/vacation rentals for 10% down. Yes, not having any mortgages will improve your DTI and your borrowing power.

Michael Furey · Answer

It's going to be used as a vacation home mainly and then rented out when we weren't using it.  What other options do I have to put as little down as possible?  Does it help that I don't have any mortgages in my name?

Paul De Luca · Answer

@Michael Furey

If it's not actually going to be your primary residence, you should not use an owner occupant loan. Also, if you are planning on renting it out as a STR FHA has a clause prohibiting that.

Vacation home as a primary residence?

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