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The financing differences between primary, secondary and investment homes

Not all homes have the same purpose, nor do they have the same financing requirements. There are three occupancy types and all have different ways of securing financing:

  • Primary residence
  • Secondary residence
  • Investment property

Before purchasing any type of home or additional properties, know if you can afford the responsibility.

Primary residence

This is the home you live in for most of the year. Getting a mortgage is typically easier for primary homes and borrowers can benefit from lower mortgage rates than other types of occupancies. Conventional, USDA, FHA, or VA loans are the most used mortgages for primary residences.

A property cannot be listed as your primary residence and secondary home at the same time so even in the off-chance that you spend exactly 50% of your time in each, you will need to select one as your primary residence.

Secondary residence

A second home is one that you live in sometimes, like a vacation home. According to Freddie Mac, “The borrower must keep the property available primarily (i.e., more than half of the calendar year) for the borrower’s personal use and enjoyment.” This property isn’t in a timeshare or part of a rental agreement and financing can be more challenging. It’s for your enjoyment.

In some cases, secondary properties must be located a certain distance away from your primary residence. Otherwise, it may be classified as a rental.

Government-backed loans, like FHA and VA, can’t be used to purchase a second home. Instead, you could consider financing options like Conventional or even jumbo loans.

Investment properties

If you are renting out the secondary property for 180 days or more out of the year, it’s considered an investment property. When you buy an investment property, your goal is to generate income—this includes homes with the intent to flip them.

Like second homes, government-backed loans can’t be used to purchase an investment property. Because of their level of risk, investment properties often have higher interest rates. Conventional loans can be considered but other options are available.

Get what you need at

Before purchasing any type of home or additional properties, know if you can afford the responsibility.

Whether you’re interested in financing a primary, secondary, or investment property, the experts at are here for you. We are ready to help guide you through the ins and outs of purchasing multiple properties.

Call now to speak with one of our experienced loan officers

to get approved for a mortgage today!

The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.