700 credit score cant get 10% down 2nd home loan?? need 740?

[Brandon Vaughan]

Hi, i am trying to purchase my first STR. I thought i had found a lender but after running the numbers, was told i need a better credit score. has anyone ells had this problem or found a lender that will do 10% down with 700 credit score? please help thank you!

[Jay Hurst]

Quote from @Brandon Vaughan:

Hi, i am trying to purchase my first STR. I thought i had found a lender but after running the numbers, was told i need a better credit score. has anyone ells had this problem or found a lender that will do 10% down with 700 credit score? please help thank you!

 @Brandon Vaughan    What you are likely running into is a loan level pricing adjustment (LLPA) issue. LLPA's are what Fannie and Freddie charge to deliver a loan to them.  The LLPA are a set of matrixes based on property type, credit score and loan to value. The higher the loan to value or lower the score the higher the LLPA which pushes up the rate. 10% down second homes have VERY large LLPA adjustments of 4.125.  See second home line in the middle of this snip:

with a 700 credit score and 90% loan to value you also have a 1.00 adjustment vs a .250 adjustment for 740 or higher. see snip:

so, likely your lender cannot simply do a loan with those combined adjustments because the required rate/costs are not offered.  If you can possibly put down 20% in would be doable but also a lot cheaper for you.