A second home loan from Fannie Mae or Freddie Mac must be secured by a one-unit property that the borrower occupies for part of the year and keeps for personal use, and it must receive an automated approval (Desktop Underwriter Approve/Eligible or a Loan Product Advisor Accept). Both cap purchase and limited or "no cash-out" refinance loans at 90% LTV and cash-out refinances at 75%. Rental income from the second home cannot be used to qualify, gifts above 80% LTV require a 5% contribution from the borrower's own funds, and Fannie Mae's Desktop Underwriter requires two months of reserves.
Fannie Mae (conventional)
- The property must be occupied by the borrower for some portion of the year, be a one-unit dwelling suitable for year-round occupancy, and be under the borrower's exclusive control; it must not be rental property or a timeshare arrangement. Fannie Mae B2-1.1-01
- 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 for qualifying purposes; no agreement may give a management firm control over occupancy. Fannie Mae B2-1.1-01
- The loan must be underwritten in Desktop Underwriter and receive an Approve/Eligible recommendation; high LTV refinance loans are the only exception. Fannie Mae B2-1.1-01
- Maximum LTV/CLTV/HCLTV for a one-unit second home: 90% for purchase and limited cash-out refinance, 75% for cash-out refinance. Fannie Mae Eligibility Matrix
- Desktop Underwriter requires two months' reserves for a second home transaction, plus additional reserves when the borrower has multiple financed properties. Fannie Mae B3-4.1-01
- When the subject property is a second home, the borrower may have at most 10 financed properties (DU). Fannie Mae B2-2-03
- When gifts are used and the LTV is greater than 80%, the borrower must make a 5% minimum contribution from their own funds. Fannie Mae B3-4.3-04
Freddie Mac (conventional)
- The loan must be an Accept Mortgage on a 1-unit property that the borrower occupies for part of the year and that is available for personal use more than half of the calendar year; a 2-unit second home is treated as an Investment Property. Freddie Mac 4201.12
- Short-term renting is allowed if no rental pool or agreement requires renting, gives a management company control over occupancy, or involves revenue sharing; rental income from a second home may not be used as stable monthly income. Freddie Mac 4201.12
- Maximum LTV/TLTV/HTLTV: 90% for purchase and "no cash-out" refinance, 75% for cash-out refinance. Freddie Mac 4203.1
- Each borrower, and all borrowers together, may not be obligated on more than 10 financed 1- to 4-unit properties, including the subject property and the primary residence. Freddie Mac 4201.12
- Pooled funds, wedding or graduation gifts, gifts or grants from an Agency, and Employer Assisted Homeownership benefits cannot be used; reserves must meet Section 5501.2, which for Loan Product Advisor Mortgages means the reserves on the Feedback Certificate. Freddie Mac 4201.12 Freddie Mac 5501.2
- When the LTV/TLTV/HTLTV is above 80% and gift funds are used, the borrower must contribute 5% of value from personal funds. Freddie Mac 5501.3
Sources
- Fannie Mae Selling Guide, September 2, 2026 version: B2-1.1-01, Occupancy Types (Second Home Properties) (p. 159); B3-4.1-01, Minimum Reserve Requirements (p. 411); B2-2-03, Multiple Financed Properties for the Same Borrower (p. 227); B3-4.3-04, Personal Gifts (p. 435)
- Fannie Mae Eligibility Matrix, August 5, 2026 version: Standard Eligibility Requirements - Desktop Underwriter (PDF p. 2)
- Freddie Mac Single-Family Seller/Servicer Guide, September 16, 2026 version: 4201.12(a), Eligibility requirements (p. 4201-9); 4201.12(b)(iii), Rental income from a second home (p. 4201-11); 4203.1(b)(ii), Maximum LTV, TLTV and HTLTV ratios (p. 4203-5); 4201.12(b)(i), Maximum number of financed properties (p. 4201-10); 4201.12(b)(ii), Asset eligibility and reserve requirements for second home Mortgages (p. 4201-10); 5501.2(b), Minimum required reserves (p. 5501-13); 5501.3(k), Minimum contribution from Borrower personal funds (p. 5501-27)
Agency guides set the baseline; individual lenders can add stricter overlays. Sources are the guideline versions in Zeitro Strata as of October 29, 2026.