Second Home Mortgage Restrictions -STR

[Aaron Henricksen]

I'm considering purchasing a property as a second home, with a 10% down 30 year mortgage, and using it as a STR for most of the year. I would also be using it with my family to vacation, so I would be using it for personal reasons for at least a couple of weeks each year.

I spoke with a mortgage broker recently, and he told me that I'm not allowed to rent it out during the first 12 months, even as a STR. He said the problem would be when I claim the STR income on my taxes, that someone could look at that and consider it mortgage fraud. I also read that if you only operate a property as a STR for 14 days or less, you don't need to count the revenue on your taxes, but my goal would be to rent it out much more than that.

I’ve heard people on the podcasts use this kind of mortgage, so, my questions are:

1) is this truly a restriction? and

2) are there any work arounds?

For a little more context, I have two other properties, including my primary residence, and another STR that's in my LLC's name, where I used a portfolio lender. So, I even thought of some strategies where I purchase the house in my name, but my LLC operates the STR side of the business, or even creating an S Corp to run the STR part.

From what I've heard and understand, using a second home mortgage to buy a STR seems like a common strategy, and I don't want to break any laws or rules related to taxes or the mortgage, but I'm trying to see if there's a creative solution, if this is, in fact, an issue.

Thanks in advance!