STR loan options in these times?

[Wesley Myers]

We have a contract on our 2nd STR. Current approval from one bank is 30/yr at 6% with 20% down. Is this the norm these days with excellent credit? What about borrowing against a 401k or borrowing against our current STR that's fully owned? Any advice greatly appreciated!

[Raymond J. Rodrigues]

@Nicholas Covington, what you're saying is not true. Read the guidelines on what the requirements are for a second home.

It states that it must be occupied by the borrower for some portion of the year. Meaning the property cannot be rented out with an annual lease during the first year, not that it cannot be rented out. 

It goes on to state the following, " If the lender identifies rental income from the property, the loan is eligible for delivery as a second home as long as the income is not used for qualifying purposes, and all other requirements for second homes are met (including the occupancy requirement above)."

I've listed the guidelines down below so that you are aware of what you CAN and cannot do. Hopefully this helps your business knowing this now. 

✓	Second Home Requirements
	must be occupied by the borrower for some portion of the year
	is restricted to one-unit dwellings
	must be suitable for year-round occupancy
	the borrower must have exclusive control over the property
	must not be rental property or a timeshare arrangement1
	cannot be subject to any agreements that give a management firm control over the occupancy of the property
	must be underwritten in DU and receive an Approve/Eligible recommendation, with the exception of high LTV refinance loans required to be underwritten in accordance with the Alternative Qualification Path (see B5-7-03, High LTV Refinance Alternative Qualification Path).

1. If the lender identifies rental income from the property, the loan is eligible for delivery as a second home as long as the income is not used for qualifying purposes, and all other requirements for second homes are met (including the occupancy requirement above).