Reviewed by: Jeffrey Kriebel, Senior Loan Advisor | NMLS #30073
November 6, 2026
To qualify for a second home mortgage, lenders check five things: how you’ll use the property, your down payment, your debt-to-income ratio, your credit, and the savings you’ll have left after closing. Eligible conventional loans may allow a 10% down payment, but individual lenders can require more.
Still deciding whether a second home fits your plans? Start with how to know if you’re ready to buy a second home.
Key takeaways
- The property must qualify as a second home. You need to use it yourself for part of the year, and it can’t primarily operate as a rental property.
- Your current mortgage counts. Lenders consider both housing payments and your other debts when deciding how much you can borrow.
- You need more than a down payment. Closing costs and savings left after closing are also important.
- Credit requirements vary. Some conventional loans no longer have a fixed minimum credit score under automated underwriting, but lenders may have their own requirements.
How mortgage requirements compare (as of November 6, 2026)
| Primary home | Second home | Investment property | |
| Minimum down payment, 1-unit purchase | As low as 3% for eligible buyers | 10% | 15% |
| Number of units allowed | 1–4 | 1 | 1–4 |
| Can rental income from the property help you qualify? | Sometimes | No | Yes, subject to rules |
| Basic cash reserves required | Usually none for a 1-unit home | 2 months of payments | 6 months of payments |
These are Fannie Mae’s baseline requirements for eligible loans under its conventional loan eligibility matrix and reserve guidelines. Your lender may have stricter requirements, and additional reserves can apply if you own multiple financed properties.
Does the property qualify as a second home?
A second home is a property you use personally for part of the year, such as a vacation home or weekend getaway. It isn’t your main residence, but it also isn’t primarily a rental property.
Lenders check this first because second homes and investment properties have different mortgage requirements.
What qualifies as a second home?
Under conventional second-home guidelines, the property must:
- Be a one-unit property
- Be used by you for part of the year
- Be suitable for year-round living
- Remain under your control
- Not be a timeshare or primarily operated as a rental property
- Not be controlled by a management company that decides who can stay there
Freddie Mac has similar requirements, including that the property must remain available mainly for your personal use and be in a location that reasonably makes sense as a second home.
Can you rent out a second home?
Yes, occasionally. Rental activity doesn’t automatically disqualify the property, as long as it still meets second-home requirements and the rental income isn’t used to qualify for the mortgage.
If you need rental income to afford the payments, an investment-property loan may be more appropriate. You also can’t give a management company control over who occupies the home.
Describe how you plan to use the property accurately on your mortgage application.
Does your second home need to be a certain distance away?
Not necessarily. Fannie Mae doesn’t set a minimum distance between your primary residence and second home. Freddie Mac requires the location to reasonably function as a second home, and individual lenders may have additional restrictions.
A vacation property near your primary residence isn’t automatically disqualified, but the lender may ask how you plan to use it.
How much do you need to put down?
You may qualify to buy a second home with a 10% down payment under conventional financing guidelines, although some lenders and loan programs require more.
A larger down payment can reduce your borrowing costs in two ways:
- Mortgage insurance: With less than 20% down, you’ll generally need private mortgage insurance (PMI) on a conventional loan. PMI protects the lender if you stop making payments and adds to your borrowing costs.
- Loan pricing: Second-home mortgages can carry additional pricing charges that generally decrease as your down payment increases, based on the loan pricing matrix. These costs may appear as a higher interest rate, discount points, or both. Compare the annual percentage rate (APR), which reflects the interest rate plus certain loan costs.
If your mortgage exceeds the 2026 conforming loan limit of $832,750 in most counties, or up to $1,249,125 in high-cost areas, you’ll generally need a jumbo loan. Tomo Mortgage offers jumbo loans for eligible second homes, although these loans may have stricter requirements.
Does your current mortgage count against you?
Yes. When you apply for a second home mortgage, lenders count your current housing payment, the new home’s payment, and your other monthly debts.
They compare that total with your gross monthly income (income before taxes). This is called your debt-to-income ratio, or DTI.
Under automated underwriting guidelines, DTI ratios up to 50% may be allowed. That doesn’t mean everyone at 50% will qualify. Lenders can set lower limits, and your full financial profile still matters.
Illustrative example, not a loan offer:
| Monthly amount | |
| Gross monthly income | $20,000 |
| Current home payment (mortgage, taxes, insurance, HOA) | $3,200 |
| Car loan | $500 |
| New second home payment (including taxes and insurance) | $3,000 |
| Total monthly debts | $6,700 |
| DTI | 33.5% |
If the second home’s payment increases to $5,500, your total monthly debts would rise to $9,200, bringing your DTI to 46%.
That’s below the 50% maximum for Fannie Mae’s automated underwriting, but above a lender’s 43% limit. Whether you qualify depends on your income, other debts, and loan program.
How much cash do you need left after closing?
Lenders don’t just check whether you have enough for the down payment and closing costs. They also want to know you’ll have money left over. These remaining savings are called cash reserves.
Under conventional loan reserve requirements, a second home generally requires at least two months of the new home’s full housing payment in reserves. If your second home costs $3,000 per month, you’d need at least $6,000 left after closing.
The requirement can increase if you own other financed properties, such as rental homes. Additional reserves are calculated using the outstanding mortgage and HELOC balances on those properties, excluding your primary residence and the new home:
- 1–4 financed properties: 2% of those balances
- 5–6 financed properties: 4%
- 7–10 financed properties: 6%
Suppose you own your primary home and a rental property with a $300,000 outstanding mortgage. You’re now buying a second home with a $3,000 monthly payment.
| Reserve requirement | Amount |
| Two months of second-home payments | $6,000 |
| 2% of the rental property’s $300,000 mortgage balance | $6,000 |
| Total reserves needed | $12,000 |
Your primary home’s mortgage balance isn’t included in that additional reserve calculation. This example shows a baseline requirement; your lender may require more, especially for jumbo loans.
What credit score do you need?
There’s no single credit score requirement for every second home mortgage.
In November 2025, Fannie Mae removed its 620 minimum credit score for new loan files reviewed through its Desktop Underwriter system. Instead of relying on a fixed cutoff, the system considers your broader credit history and financial situation.
For second-home purchases under Fannie Mae’s guidelines, the loan must also receive an Approve/Eligible result from its automated underwriting system. Manual underwriting isn’t an alternative under that program.
However, lenders can still set their own minimum scores, and your credit score continues to affect mortgage pricing. Tomo Mortgage’s jumbo loan requirements include a minimum credit score of 700. The score you need for a conventional second-home loan depends on the lender and loan program. A stronger credit profile may give you more options and better pricing.
Ready to apply, or adjust one thing first?
If the property qualifies as a second home and your finances meet the lender’s requirements, getting preapproved is the next step. If something is holding you back, consider these options:
- Property use: If you plan to operate the home mainly as a rental, an investment-property mortgage may be a better fit.
- Down payment: You may be able to use equity from your current home through a home equity line of credit (HELOC) or cash-out refinance. Borrowing more can increase your monthly debts.
- DTI: Paying down debt, choosing a less expensive property, or adding a qualified co-borrower may improve your ratio.
- Credit: Improving your credit profile before applying may give you more loan options.
- Cash reserves: Keeping more savings available after closing can help you meet the lender’s requirements.
A preapproval can give you a clearer picture of what you may qualify for based on your actual income, debts, credit and savings.
Tomo Mortgage, LLC · NMLS #2059741 · Equal Housing Lender
Frequently Asked Questions
Do you need 20% down for a second home?
No. Eligible second-home purchases may qualify with a 10% down payment. A larger down payment may lower your borrowing costs, and individual lenders may require more.
Can I rent out my second home?
Yes, occasionally, as long as the property still meets second-home occupancy requirements. Rental income doesn’t automatically disqualify the home, but you can’t use it to qualify for the mortgage under the agency guidelines discussed above.
Does a second home have to be a certain distance from my primary home?
Not always. Fannie Mae doesn’t specify a minimum distance, while Freddie Mac requires the location to reasonably function as a second home. Individual lenders may have additional requirements.
Can I use an FHA or VA loan for a second home?
Generally no. FHA and VA loans are intended for homes used as primary residences, not ordinary vacation properties. Most second-home buyers use conventional or jumbo financing.
Is a second home mortgage the same as a second mortgage?
No. A second home mortgage finances another property you’ll use yourself. A second mortgage, such as a home equity loan or HELOC, lets you borrow against a property you already own.
Can I use equity from my current home for the down payment?
In many cases, yes. A HELOC or cash-out refinance may provide funds for a second-home down payment. Eligible funds borrowed against an asset can be used for a down payment, but the new loan payment generally counts toward your DTI.