Question 1

What is the difference between a second home and an investment property?

Accepted Answer

A second home is a property you occupy for part of the year for personal use — a beach house, mountain cabin, or vacation condo. An investment property is bought primarily to generate rental income. Second homes qualify for better rates and lower down payments than investment properties.

Question 2

What down payment is required for a second home?

Accepted Answer

Most conventional second-home programs require at least 10% down, with the best pricing at 20%-25% down. Reserve requirements of 2-6 months of PITIA on both your primary and second home are typical.

Question 3

Are second-home rates the same as primary residence rates?

Accepted Answer

No. Second homes have loan-level price adjustments that make rates slightly higher than a comparable primary-residence loan — usually about 0.25% to 0.75% depending on down payment and credit score.

Question 4

Do I have to live a certain distance from my primary home?

Accepted Answer

There's no strict distance rule, but the property must be a reasonable distance from your primary residence, be a one-unit dwelling suitable for year-round occupancy, and be under your exclusive control (not subject to a rental management agreement or timeshare).

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