New to str, is second home/vacation home 10% down still an option?

[Andrew Schlagheck]

Evening all.

Apologies for the basic post. Reading and researching as much as I can on str (reading Averys book.) Posts here, podcasts...alot of reference to vacation home 10% down loans. My local lender does not seem familiar. Is this still an option or have laws changed?

Appreciate all the knowledge shared here!

Andy

[Kevin Luttrell]

Fannie Mae expressly permits renting out a property secured with 2nd home financing. There is no mortgage fraud. Only stipulations are that you occupy the property for "some portion of the year" and that it not be controlled by a management company. And you can't use the rental income for qualifying. 

https://selling-guide.fanniema...

Like Ryan mentioned, Fannie/Freddie recently increased their LLPAs substantially for 2nd home loans so the rates and fees are substantially higher than they used to be. Pricing is now in-line with investment property pricing, so there is no longer a benefit to using 2nd home financing except to do 10% down (vs 15% down for investment property)

This is for normal Conventional financing. Small community banks, credit unions and other lenders who don't sell their loans in the secondary market may have different guidelines.