Typically 15–25% down

A different animal from the house you live in.

Rentals and second homes are underwritten more conservatively than a primary residence, because lenders know which mortgage gets paid last when things get tight. More cash up front, a higher credit bar, and money still in the bank after closing.

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What it takes

The requirements, in plain terms.

Down payment

Typically 15% to 25%, depending on the property type and how many units it has.

Reserves

Cash left over after closing — usually expressed as a number of months of payments. This is the requirement people forget to plan for.

Credit

A higher bar than a primary residence, and the terms available move more sharply with your score.

Rental income

It can help you qualify, but only if it is documented — a signed lease on an occupied property, or a market rent schedule from the appraiser on a vacant one.

Occupancy

Non-owner-occupied. VA, FHA and USDA are all off the table here; this is conventional territory.

Documents

What to have ready.

Requested once, up front, rather than in dribs — missing paperwork is what actually delays a file. The full checklist by how you're paid is on the loan programs page.

Signed leases for any property already rented
Schedule E from your last two tax returns
Statements proving the reserves are actually there
Mortgage statements, tax bills and insurance policies for every property you own
Pay stubs, W-2s and two years of returns
Two months of personal bank statements

Full document checklist

The part worth knowing

What people find out too late.

Guidelines vary more between lenders here than on any other purchase type — number of financed properties, how much rental income counts, how many months of reserves. That variation is the reason to shop the file rather than take the first answer, and it is the part of the job a bank structurally cannot do for you.

Answers

Questions about investment & second homes.

General answers. Every file is different, so treat these as a starting point rather than a quote.

Does the rent count as my income?

Partially, and only when documented. Lenders apply a vacancy factor rather than crediting the full rent, so the number that helps you qualify is lower than the rent you collect.

Is a second home priced like an investment property?

No — a second home you use yourself sits between a primary residence and a rental. How you intend to use it matters, and it must be represented accurately on the application.

How many properties can I finance?

There are limits, and they differ by lender. If you are building a portfolio, tell Lucy the whole plan at the start so the first loan does not make the third one harder.