10% Downpayment Vacation Home Loan

[Evan O'Brien]

When purchasing a property with a 10% down payment vacation home loan with intentions to use as a short term rental is not being able to use the property as a rental for 12 months a typical requirement of a 10% down home vacation loan? Or do the requirements for how long a property isn’t able to be used as a rental vary per lending institution?

I spoke with a lender last week who explained to me that with their conventional10% down payment vacation home loan program would require the property to not be used as a rental for 12 months. Any additional information for feedback would be greatly appreciated!

[Jason Wolohan]

Typically the lender will want you to use the property for a portion of the year (at least two weeks) and you won't be able to use the income expected from the property to qualify, like other investment loans might allow. Because you'll need to have the intent of using it for personal use, you'd be limited by not putting long term leases in place or using some property management companies. If you plan to self manage you should be fine.