QUESTION ABOUT VACATION/SECOND HOME LOAN FOR ABNB!!!!

[Colby Wartman]

LOOOOONG story short, I have been pre-approved for a conventional investment loan with 20% down. We are looking at putting an offer down on a property in Florida for an ABNB. However, listening to Roberts ABNB series he talked about a vacation/secondary home loan he has used for ABNB and only needs 10% down. From what I've heard about using a vacation/secondary loan, there is literature in the loan saying that you are not allowed or should not use this loan if you have plans for ABNB. Is this true? Has anyone used this type of loan and then used it for ABNB? So should I pay the 20% down and use a conventional investment loan or am I able to use the vacation/secondary loan with 10% down and use that property for ABNB or long-term rental?? This question is time sensitive as we are putting an offer down ASAP! Thank you all!

[Lyndsay Zwirlein]

Hey Colby! 

The Fannie Mae requirements state that if you purchase a second/vacation home which allows for up to 90% LTV, you must intend to occupy the property for part of the year (typically at least 2 weeks). However if you choose to rent it out the remainder of the time, that is acceptable. Also you cannot use projected rental income to help you qualify for the mortgage, whereas with an investment home loan you can.

Feel free to reach out if you have more questions! Happy to help!  Good luck!

Lyndsay