Occupancy Types
Primary residence — The home where you live most of the time. You must occupy within 60 days of closing and intend to live there for at least one year. Second home — A property you occupy part of the year, typically a vacation home. It must be a reasonable distance from your primary residence and cannot be a rental. Investment property — A property you purchase to rent out or generate income. You don’t intend to occupy it.How Occupancy Affects Terms
| Occupancy Type | Typical Max LTV | Rate Adjustment |
|---|---|---|
| Primary residence | 90% | Best rates |
| Second home | 85% | +0.25% to +0.50% |
| Investment property | 80% | +0.50% to +1.00% |
Documentation Requirements
Lenders verify occupancy intent through:- Signed occupancy affidavit at closing
- Distance from current residence (for second homes)
- Rental history and lease agreements (for investment properties)
- Comparison of subject property to current living situation
Occupancy Fraud
Misrepresenting occupancy is mortgage fraud. Claiming a property is a primary residence when you intend to rent it out can result in loan acceleration, legal consequences, and future lending restrictions. If your plans change after closing (job relocation, family circumstances), lenders generally understand—but the original intent must be truthful.Investment Property Considerations
Self-employed mortgage programs are popular for investment properties because:- Rental income can supplement qualifying income with some lenders
- Self-employed investors often have complex tax situations
- Higher loan amounts are available than with conventional investment property loans