This BLOG On Fannie Mae Second Home Guidelines On Vacation Home Purchases Was UPDATED And PUBLISHED On October 28th, 2019
Fannie Mae Second Home Guidelines Update
Fannie Mae Second Home Guidelines require that the second home buyer put at least 10% down payment on a home purchase.
- Second-home financing are not permitted with government loans
- Government Loans are the following:
- FHA Loans
- USDA Loans
- VA Loans
- Government loans are for owner occupant primary residences only
- Fannie Mae and Freddie Mac are the two mortgage giants that sets the rules and mortgage lending guidelines for conventional loans
- Conventional Loans does allow for second home financing as well as investment home financing
- The differences between second home financing and investment home financing are that with second home loans, rates are much lower than investment home financing
- The down payment requirements are significantly lower on second home financing versus Conventional Investment Home Financing
- Second-home financing requires 10% down payment
- Investment home financing on a single-family home requires 15% down payment
- Mortgage rates on investment home financing are about 0.50% higher than second home financing
- All conventional mortgage loan programs require borrowers to have at least a 620 Credit Score and must meet all conventional mortgage lending guidelines
In this article, we will cover and discuss Fannie Mae Second Home Guidelines.
Fannie Mae Second Home Guidelines And Second Home Financing Requirements
Just meeting conventional mortgage lending guidelines and having the 10% down payment on a home purchase does not guarantee that a second home buyer can qualify for a second home mortgage loan.
- Fannie Mae and Freddie Mac have specific rules and requirements with second home financing requirements
- The second home purchase needs to be at least 100 miles from the primary home of the second home buyer
- A second home purchase that is just a few miles away cannot qualify for second home financing and can only qualify for an investment home financing
- Again, most second-home buyers will greatly benefit from the rates and terms and the minimum down payment requirements of second home mortgage loans than investment home mortgage loans
Second Home Purchases Under 100 Miles From Primary Home
Second home buyers can qualify for second home financing that is closer than 100 miles from their primary homes if and only if the second home purchase is a waterfront property or is located in a resort.
- If the second home buyer purchases a second home that is nearby his primary home which is similar in size and similar type of neighborhood, then it will definitely not qualify for second home financing
- However, if the second home purchase is a beachfront home or is in a resort area like Disney World in Orlando, Florida, and the second home purchase is nearby the primary residence, then this type of property will qualify for a second home purchase
Home Buyers of second and vacation homes second home financing with a national direct lender with no mortgage overlays can contact us at The Gustan Cho Team at 262-716-8151 or text us for faster response. Or email us at firstname.lastname@example.org. We are available 7 days a week, evenings, weekends, and holidays to answer any of your questions.