Second Homes

Second Home Loans:
Financing Your Vacation Property

Buying a vacation home or second residence requires different financing than your primary home. Learn about second home mortgage requirements, down payment minimums, tax implications, and how second home loans differ from investment property loans.

Explore Second Home Financing

Second Home Mortgage Requirements

Second home loans are for properties you occupy for part of the year — not rental properties. Lenders consider second homes less risky than investment properties but riskier than primary residences. Requirements fall in between.

Second Home vs Investment Property

Feature Second Home Investment Property Primary Residence
Down Payment 10% typical (some 5%) 15-25% 3-20%
Credit Score 680+ 700+ 580-620+
Rate Difference 0.125-0.25% above primary 0.5-1% above primary Best rates
Rental Income Cannot use to qualify 75% of rent can offset DTI N/A
Reserves 2-6 months 6-12 months 0-2 months
FHA/VA Eligible? No No Yes

What Qualifies as a Second Home (Per Lender Guidelines)

  • Must be a single-unit dwelling suitable for year-round occupancy
  • Must be a reasonable distance from your primary residence (typically 50+ miles) — lenders want a true vacation home, not an investment property disguised as a second home
  • Must be occupied by you for some portion of the year — not rented full-time
  • Cannot be managed by a property management company that controls occupancy
  • Must have exclusive control — no timeshares or fractional ownership arrangements
  • Must not be subject to rental agreements that make it unavailable for your use

Tax Implications of Second Home Ownership

Mortgage interest deduction: You can deduct mortgage interest on up to $750,000 of total home acquisition debt (primary + second home combined). Property taxes: Deductible but subject to the $10,000 SALT cap. If you rent it out: If you rent for 14 days or fewer per year, rental income is tax-free. If you rent more, it starts being treated as a rental property for tax purposes, with different rules for expense deductions. Consult a tax professional — the interplay between second home and rental tax rules is complex.

Second Home FAQs

Can I buy a second home with an FHA or VA loan?

Can I use rental income from my second home to help qualify?

Finance Your Second Home — (213) 536-9372

Related Resources

Investment Property Conventional Loans Jumbo Loans HELOC Guide Cash-Out Refi LTV Guide DTI Ratio Free Consultation →