Mortgage Navigator • Conventional • Occupancy

Second homes

A second home is for the borrower's personal use. It is not simply an investment property with a different label.

Build My Mortgage Game PlanConventional Navigator

Personal use

Second-home eligibility depends on genuine borrower occupancy/use under the agency's rules. The property should function as a residence available to the borrower rather than primarily as a rental business.

Freddie

Freddie's Section 4201.12 governs second-home mortgages and requires the monthly payment on the second home to be included in DTI along with the housing expense on the borrower's current primary residence.

Manual underwriting

Freddie's current Exhibit 25 shows second homes as an LPA Accept execution rather than a standard manually underwritten occupancy category.

Practical point: occasional rental activity can create questions. The borrower should accurately disclose intended use and let the selected agency/lender determine eligibility.
Could the other agency solve this? Fannie Mae and Freddie Mac are not identical. If this scenario fails under one agency, compare the other agency's current rule and AUS result before assuming conventional financing is unavailable. A lender overlay is also different from an agency prohibition.

Official guide baseline

Fannie Mae Selling Guide · Freddie Mac Seller/Servicer Guide

Occupancy must reflect the borrower's actual intended use. Misrepresenting occupancy can constitute mortgage fraud.