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If you are already a homeowner, you may already be familiar with how to obtain a mortgage when buying a new home. Many mortgage lenders offer home mortgages not just for primary residences, but also for your goal of owning a second home or investment property. Since you would not be occupying the property as you would with your primary residence, mortgage lenders may have different requirements for these types of home purchases.


Primary Residence vs. Second Home vs. Investment Property

When you apply for a home loan, one of the first things a lender would like to know is how you intend to use the property: as a primary residence, as a second home, or to collect income. A “primary residence” could also be called your “home base” – it’s where you and your family will live most days of the year. “Second homes”, sometimes called vacation homes, cannot have more than one unit and cannot be rented out or used for income purposes. The owner of an “investment property” does not occupy the property, but instead leases the home to others, and is responsible for the maintenance and upkeep of the property.

Different states of occupancy represent different levels of risk to a mortgage lender. Because the borrower intends to live in their primary residence, the lender believes they are more likely to pay back their home loan. The relatively higher risk associated with second homes and investment properties could mean higher upfront fees, or could translate to a higher interest rate than for a primary residence. To learn more, contact one of our loan officers.


Can I Buy a Multifamily Home as a Primary Residence?

Residential multifamily homes are properties with two to four individual units that may be occupied by different families. If you intend to occupy one unit in a multifamily home, and rent out the additional unit or units, you may apply for a primary residence mortgage.

If you are interested in purchasing a second home for your family, or considering expanding your portfolio with an investment property purchase, it’s good to know all your options. One of our home loan specialists at The Federal Savings Bank can help you with a plan to achieve your homeownership goals. Contact us at this link to take the next step on your homebuying journey.


Subject to credit approval. Terms and conditions may apply. Property insurance is required on all loans secured by property.

This information is intended for educational purposes only. Products and interest rates subject to change without notice. Loan products are subject to credit approval and include terms and conditions, fees and other costs. Terms and conditions may apply. Property insurance is required on all loans secured by property. VA loan products are subject to VA eligibility requirements. Adjustable Rate Mortgage (ARM) interest rates and monthly payment are subject to adjustment. Upon submission of a full application, a mortgage banker will review and provide you with the terms, conditions, disclosures, and additional details on the interest rates that apply to you individual situation.