A lot of Tahoe buyers live somewhere else most of the year. Maybe you are in San Francisco, the Peninsula, or Sacramento and want a place in Truckee, Tahoe Donner, Northstar, Tahoe City, Olympic Valley, Kings Beach, Tahoe Vista, or Carnelian Bay for ski weekends and summer weeks. Financing that place as a second home is often a better deal than financing it as an investment property, but the rules are specific. I'm Kevin Darmody, a local Tahoe mortgage broker. Licensed in California; I lend on California properties only. This page explains how it works in plain language.
What Counts as a Second Home?
For conventional loans sold to Fannie Mae, a second home has to meet a set of requirements in the Fannie Mae Selling Guide (section B2-1.1-01). In short, the property:
- Must be occupied by you for some portion of the year
- Must be a one-unit home (a house or a single condo unit, not a duplex)
- Must be suitable for year-round occupancy
- Must be under your exclusive control
- Cannot be a timeshare, and cannot be under an agreement that gives a management company control over who stays there
That last point matters in Tahoe. Some condo-hotel and rental-pool setups give a management firm control of bookings. Those generally do not qualify as second homes under these rules.
Can I Rent It Out Sometimes?
This is the most common question I get. Under Fannie Mae guidelines, if a lender sees rental income from a second home, the loan can still be treated as a second home as long as that rental income is not used to help you qualify and all the other second-home requirements are still met. In practice, that means you need to qualify on your own income and debts without counting rent.
If you plan to rent the home most of the year, or you need the rental income to qualify, it is probably an investment property, and you should look at investment or DSCR financing instead. See our page on Tahoe short-term rental and DSCR loans.
Be honest about how you plan to use the home. Occupancy is reviewed by lenders, and misstating it is a serious problem. I would much rather help you pick the right loan from the start.
California Properties Only
I work only on homes located in California, which covers the North Shore and Truckee area: Truckee, Tahoe Donner, Northstar, Tahoe City, Olympic Valley, Kings Beach, Tahoe Vista, and Carnelian Bay. If you are looking at Nevada-side homes such as Incline Village, I am not able to help with that loan. If renting is part of your plan, check local rules before you buy. Placer County (Tahoe City, Kings Beach, Olympic Valley, and nearby areas) requires a short-term rental permit, and the Town of Truckee caps short-term rental certificates and currently has a waitlist.
What You Will Need
Expect to document the same things as for a primary home purchase:
- Income (pay stubs and W-2s, or tax returns if you are self-employed)
- Assets for your down payment, closing costs, and reserves
- Credit review
- Details on your current home and its housing payment, since you will be carrying both
Second homes usually need a larger down payment than a primary residence and pricing can be a little different. I will walk through the actual numbers for your situation rather than quote generic figures here.
Why Work With a Local Broker?
As a broker with C2 Financial, I can shop your scenario across multiple wholesale lenders instead of offering one bank's menu. I also live in the area, so I know the difference between a Northstar condo, a Tahoe Donner cabin, and a West Shore lakefront property with unusual HOA or insurance questions.
Frequently Asked Questions
Yes. Living elsewhere is normal for second homes. The Tahoe property just needs to be in California. You need to occupy the home for part of the year and qualify with both housing payments.
Get a Straight Answer on Your Scenario
Fill out the short rate check / pre-approval form or call or text Kevin at (530) 363-1348. Send your scenario during the day and you will usually hear back that same evening with options. A full pre-approval usually follows the next morning once your documents are in.
Kevin Darmody, Mortgage Loan Originator, NMLS #1245250 | C2 Financial Corporation, NMLS #135622 | Licensed in California; California properties only | (530) 363-1348 | Equal Housing Opportunity
C2 Financial Corporation is a mortgage broker, not a direct lender. This is not a commitment to lend. All loans are subject to credit approval, underwriting, and property review; program guidelines vary by lender and can change without notice. Equal Housing Opportunity.