Two buyers can look at the same lake cottage near Richmond and walk into very different loan files. One plans long weekends and a few weeks a year at the house. The other plans to rent it out. Fannie Mae and Freddie Mac, whose guidelines lenders follow on conforming conventional loans, treat those plans as different occupancy types, and the type changes the down payment ceiling, the cash a lender wants left in your account after closing and what you can count as income.
This guide is built from the guideline pages themselves, which we opened and read in October 2026. Each number comes from a linked page. We make no rate or price claims, because a lender’s current program sheet sets those, and individual lenders can add conditions on top of agency rules.
The three occupancy labels, as Fannie Mae defines them
Fannie Mae’s Selling Guide topic on occupancy types says it purchases or securitizes loans on three kinds of property: principal residences, second homes and investment properties. A principal residence is the property the borrower occupies as a primary residence. An investment property is one the borrower owns but does not occupy.
The second-home label is the one with a checklist. According to that page, a second home:
- must be occupied by the borrower for some portion of the year;
- is limited to one-unit dwellings;
- must be suitable for year-round occupancy;
- must be under the borrower’s exclusive control;
- cannot be a rental property or a timeshare arrangement;
- cannot be subject to an agreement that gives a management firm control over who occupies it; and
- must be underwritten in Fannie Mae’s Desktop Underwriter and receive an Approve/Eligible recommendation.
Pricing follows the label too. The same page says a loan-level price adjustment applies to certain second-home loans and to all investment property loans, on top of any other adjustments. It names the adjustment but not the amount, and so do we. Your lender’s quote shows the cost for your file.
The label follows how you will use the house. A cottage you mean to hand to a rental manager does not fit the second-home list. For multi-unit options, our guide to buying a duplex or multi-family in Richmond picks up that thread.
How much down: Freddie Mac’s ceilings by occupancy type
Freddie Mac publishes its maximum loan-to-value table by property type. For purchase and no cash-out refinance loans that are not super conforming, it lists the following ceilings. A lower ceiling means a larger down payment.
| Property type | Maximum LTV | Smallest down payment implied |
|---|---|---|
| 1-unit principal residence | 95% | 5% |
| Second home | 90% | 10% |
| 1-unit investment property | 85% | 15% |
| 2- to 4-unit investment property | 75% | 25% |
The down payment column is simple subtraction from the ceiling. Cash-out refinances are tighter: the same page lists 80% for a one-unit principal residence, 75% for a second home or one-unit investment property, and 70% for a two- to four-unit investment property. The page also notes that products such as Home Possible have their own limits.
Fannie Mae publishes its own Eligibility Matrix, and a lender may set stricter limits than either agency. For how these ceilings compare with FHA and VA minimums on a primary home, see our down payment options guide, and for credit score floors by program, see minimum credit scores by loan program.
Reserves: the cash a lender wants left after closing
Fannie Mae’s page on minimum reserve requirements measures reserves in months of the qualifying payment on the new mortgage (principal, interest, taxes, insurance and association dues). For loans run through Desktop Underwriter, it says:
- two months of reserves for a second home;
- six months for an investment property, and also for a two- to four-unit principal residence; and
- no minimum for a one-unit principal residence.
As a hypothetical, if the qualifying payment were $2,000 a month, two months is $4,000 and six months is $12,000. The money has to be left over after your funds to close are subtracted.
Owning other financed properties adds to the requirement when the new loan is a second home or investment property. The page applies a percentage to the combined unpaid balance of mortgages and home equity lines on those other properties: 2% for one to four financed properties, 4% for five to six, and 6% for seven to ten, the last tier for Desktop Underwriter only. The calculation leaves out the subject property and your principal residence, and it also leaves out properties that are sold or pending sale.
Get the Richmond closing-timeline checklist
Second homes and investment properties add steps most first-time purchases skip: occupancy documents, reserve verification and extra lender questions. Ask for our Richmond closing-timeline checklist and we will send it, so you can see where each step falls before you go under contract.
Where the labels get tested around Richmond
If you want a getaway within reach of Richmond, the outer counties are one place to look. Powhatan, Goochland and Hanover are the outer-county pages to start with if acreage matters, and Chesterfield County includes neighborhoods built around lakes. Our guide to neighborhoods on a lake or reservoir names places to start, and the homes with acreage page shows listings with land. You can also run a custom filter in our property search.
Two questions come up when a getaway sits near your own home. Will the lender accept second-home occupancy at that distance? The Fannie Mae page we read states no mileage rule, but the lender decides. And if you want rental income, do local rules allow it? Our short-term rental rules guide covers the City of Richmond, Henrico and Chesterfield, and our condo and HOA rental caps guide covers association limits.
Investment property: what changes when you will not live there
For a rental you will not occupy, every figure above moves against you: a lower loan-to-value ceiling on Freddie Mac’s table, six months of reserves on Fannie Mae’s, and a price adjustment on every loan. Rental income is where the process diverges. How a lender treats it on an investment property depends on that lender’s own rules, while on a second home Fannie Mae allows rental income to exist only if it is not used to qualify. Some investors skip personal-income qualifying altogether, and our guide to DSCR loans for Richmond investors explains how those lenders qualify the property itself.
Exit planning belongs in the file as well. If you expect to sell a rental and buy another, our guide to 1031 exchanges for Richmond-area landlords explains the timelines. And if you are weighing a multi-unit purchase where you would live in one unit, ask lenders early which occupancy type applies to each structure.
Why the label on your application has to be true
Occupancy is something a lender asks you to certify, and the consequences of a false answer are not only contractual. The U.S. Attorney’s Office for the Central District of California reported a 2016 federal conviction of a borrower who stated in loan applications and in two occupancy certifications that three condominiums would be her primary residence when she never intended to live in them. She was convicted of five counts of making false statements to federally insured financial institutions, and the release gives a statutory maximum sentence of 10 years. It is one reported case, not a prediction, but it shows that misstating occupancy can be a federal matter.
The CFPB’s page on creating a loan application packet makes the everyday version of the point: lenders use what you provide to decide how much they will lend, and inaccurate information can lead to costly surprises. If your plans are uncertain, tell the lender the plan you have today and ask what happens if it changes.
What changes at closing
The occupancy type you chose follows you through the transaction: the loan is underwritten, priced and documented under that label, and the application and occupancy certifications you sign carry it. Reserves are verified after funds to close are subtracted. As on any purchase, you receive a Closing Disclosure, and our guide to the Closing Disclosure and the three-day rule explains what can change before you sign. Between approval and the closing table, avoid new debt or large moves of money, which our guide to what not to do between approval and closing details.
To compare lenders, start with our featured lenders and buyer services, and give each the same occupancy plan so the quotes are comparable.
Ready to map the steps? Ask for the closing-timeline checklist
Tell us whether you are leaning toward a second home or an investment property, and we will send the Richmond closing-timeline checklist so you can see the order of documents, reserve checks and deadlines.
Frequently asked questions
Can I rent out a second home now and then?
Fannie Mae’s occupancy page says a second home must not be a rental property or a timeshare. It also says that if the lender identifies rental income from the property, the loan can still be delivered as a second home as long as that income is not used to qualify and every other second-home requirement is met. A management agreement that hands a firm control over occupancy is also ruled out. Local rental rules are a second hurdle, and our short-term rental rules guide covers the City of Richmond, Henrico and Chesterfield.
Can a condo or townhome be a second home?
The Fannie Mae page restricts second homes to one-unit dwellings, but it does not discuss condo projects, so we cannot tell you how a particular building will be treated. Our non-warrantable condos guide explains how a building can be hard to finance, and a lender can check a specific project early.
How many days a year do I have to use a second home?
The Fannie Mae page says only that the borrower must occupy the property for some portion of the year. It sets no number of days, so a lender may apply its own conditions. Get that expectation in writing before you write an offer.
What if I am buying a house for a parent or a grown child?
Fannie Mae treats two situations as owner occupancy even though the borrower will not live there. A child can be treated as the owner-occupant when the parent cannot work or lacks the income to qualify alone, and a parent or legal guardian can be treated that way for a disabled adult child in the same position. These are narrow exceptions, not second homes. Our co-borrower and non-occupant co-signer guide covers the related loan structures.
Which assets count toward reserves?
Fannie Mae lists funds in checking and savings, stocks, bonds, mutual funds, certificates of deposit, money market and trust accounts, the vested amount in a retirement account, and the cash value of a vested life insurance policy. Eligible gift funds can be used, though gifts of equity cannot. Personal unsecured loans, non-vested stock options and rent-back credit cannot.
If I am buying two investment properties at once, do I need reserves for each?
Fannie Mae says that when a lender processes several second home or investment property applications at the same time, the same assets can satisfy the reserve requirement for each, and reserves are not cumulative across the applications. Each file still has to meet its own required amount, so confirm the approach with your lender.
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