Second-Home Loan

A second-home loan is for a property you occupy part of the year yourself, like a vacation home. It comes with a lower down payment than an investment loan, often around 10 percent minimum under Fannie Mae guidelines, though the exact figure varies by lender and borrower profile.

The trade-off is strict occupancy rules. The home cannot be a full-time rental or be locked into a management agreement that controls when it is available, and you cannot use projected rental income to qualify. Labeling an investment property as a second home to get the cheaper terms is occupancy fraud, with real legal and loan consequences, so the use has to genuinely match the loan.