Loan Requirements for a Second Home
Do you wish you had a tranquil and relaxing second home?
The majority of people do, but how do you afford a second home?| Debt to Income | 36% (or less) | 36% (or less) | 45% (or less) | 45% (or less) |
|---|---|---|---|---|
| Credit Score | 640 | 680 | 680 | 700 |
| Minimum Down Payment Percentage | 25% | 10% | 25% | 10% |
| Source - FANNIE MAE ELIGIBILITY MATRIX |
Maximum loan amount
See jumbo loan for further information.
Seller paid closing costs
Fannie Mae second home mortgage guidelines allow the seller to pay a percentage of the buyer's closing costs.The amount of the seller concession is determined by the percentage of the down payment.
Frequently
Asked Questions About Second Home Mortgages
Q. Is it possible to use a VA loan for a second home?
A. A second residence mortgage is not available by the VA; only
homes that are occupied by the owner are eligible.
Q. Can an FHA loan be used for a second home?
A. The FHA does not permit second home financing. But, there are
employment-related exceptions. See
Can
I get an FHA loan for a second home? Second home guideline
Q. Can I rent my home?
A. In most circumstances, conventional and FHA home loans require a
minimum of one year of occupancy before renting the property.
Before converting the dwelling to a rental home, it's a good idea to
talk to your lender before making the conversion.
Q. Can I buy a vacation home with a VA loan?
A. The VA home loan program is only for primary residences that are
owned by the borrower. Second home financing is prohibited.
Q. Can I buy a second house with a FHA loan?
A. Yes, technically. If certain conditions are met, the FHA will
approve a second mortgage.
Q. Can you buy a second house with less than a 20% down payment?
A. Most likely. The amount of money needed for a down payment is
determined by the debt-to-income ratio.
Q. Can a USDA loan be used to purchase a second home?
A. If your current loan is a USDA guaranteed loan and you have lived
in the house for at least three years, you are allowed to utilize it
as a second residence.
Q. Can you qualify for a mortgage based on projected rental
income?
A. According to Fannie Mae, if the subject property is used for
qualifying uses and will generate rental income, one of the
following Fannie Mae forms must be used to substantiate the
property's income-earning potential:
Single-Family Comparable Rent Schedule (Form 1007) (supplied with
the corresponding appraisal report) for one-unit residences, or
Small Residential Income Property Appraisal Report is for properties
with two to four units (Form 1025).
For second home finance, see Fannie Mae's criteria.
Fannie Mae guidelines for second home financing
Q. How much of a second-home mortgage can I afford?br /> A. Contact the lender who handled your present home's mortgage or a loan officer at your bank.
Q. What is the current second-home mortgage rate?
A. See the list below.