Updated October 2026. Loan rules were read on October 22, 2026 on Fannie Mae, VA.gov, IRS, FHFA, CFPB and NAR pages. This is general information, not financial or tax advice.
You can’t usually buy a second home with a true $0 down loan. Fannie Mae caps a one-unit second-home purchase at 90% of the price, so plan on at least 10% down. VA loans offer no money down, but only on a home you’ll live in. The real “no money down” route is borrowing that 10% from equity you already own.
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Key takeaways
- A conventional second-home loan tops out at 90% loan-to-value on a one-unit home, per Fannie Mae’s eligibility matrix. That means a 10% down payment.
- VA loans can mean no down payment, but VA says you must live in the home you buy with the loan. A vacation home doesn’t qualify.
- Most “no money down” second homes are really funded with a HELOC, home equity loan or cash-out refinance on the first home.
- On NAR’s September 2026 median price of $417,500, 10% down is $41,750 before closing costs.
Can you buy a second home with no money down?
Not with a standard second-home mortgage. Lenders see a second home as riskier than the one you live in. If money gets tight, people pay the mortgage on their main home first.
So the rules are tighter. Fannie Mae’s Selling Guide says a second home must be a one-unit home, suitable for living in all year. You must live there for part of the year and keep full control of it. It can’t be a timeshare, and it can’t be run by a rental management firm that controls who stays there.
Then there’s the down payment. Fannie Mae’s eligibility matrix allows up to 90% loan-to-value on a one-unit second-home purchase. That leaves 10% you must bring from somewhere. Your lender may ask for more, based on your credit and debts.
Why don’t VA, FHA or USDA loans work here?
Those are the well-known low or zero down programs. But they’re built for the home you live in. VA.gov lists the rule plainly: to get a VA-backed purchase loan, you must live in the home you’re buying with it. FHA follows the same idea. HUD’s handbook says at least one borrower must move in within 60 days and plan to stay for a year.
There’s one honest workaround. If you’re moving and the new place becomes your main home, a VA or FHA loan can work. Your old home can then become the “second” property, or a rental. Our guide on renting out your first home when you buy a second walks through that move.
Is a second home the same as an investment property?
No, and the label matters. Fannie Mae treats a home you rent out full time as an investment property. Those loans usually carry higher costs and tighter limits. If the lender sees rental income on a second home, the loan can still be a second-home loan. But that rent can’t be used to help you qualify.
What are the real ways to buy a second home with little or no cash?
Here are the options people actually use, from most common to least.
1. Borrow against your first home
This is how most “no money down” second homes happen. You don’t skip the down payment. You fund it with equity. The CFPB describes a home equity line of credit (HELOC) as an open-end line that lets you borrow again and again against your equity. Your equity is your home’s value minus what you owe.
A home equity loan pays you a lump sum, usually at a fixed rate. A cash-out refinance replaces your first mortgage with a bigger one. Each one puts your main home on the line. The Consumer Financial Protection Bureau says to consider a HELOC only if you’re sure you can keep up with the payments.
If your credit isn’t perfect, read our guide to home equity loans with bad credit before you apply.
2. Ask the seller to finance part of the price
In seller financing, the seller acts as the bank for some or all of the price. Some sellers will carry a second note that covers the down payment. That only works if your main lender allows it. Many don’t, so ask first. Get the terms in writing, and have a real estate attorney review them.
3. Buy with a partner
A co-buyer can bring the down payment while you bring the income, or the other way around. Write down who owns what share, who pays which bills and what happens if one of you wants out. Lenders will look at both of you.
4. Use gift funds, if your loan allows it
Some loan programs allow a family gift toward the down payment. Rules differ by loan type and occupancy. Ask your lender in writing before anyone moves money.
5. Make the new home your main home
If you plan to live in the new place most of the year, it’s not a second home. It’s your next primary home. That opens VA and FHA. Be honest on the loan forms. Calling a vacation home your primary residence is mortgage fraud.
For a closer look at the same question for beach and mountain places, see how to buy a vacation home with no money down. For rentals and flips, read how to buy real estate with no money down.
How much cash do you need for a second home in 2026?
Let’s run the numbers on the US median. NAR reported a median existing-home price of $417,500 for September 2026. The average 30-year fixed rate was 6.86% that month, per Freddie Mac data quoted by NAR.
| Item | Amount on a $417,500 home | Where it comes from |
|---|---|---|
| Down payment (10%) | $41,750 | Fannie Mae max 90% LTV for a one-unit second home |
| Loan amount | $375,750 | Under the 2026 conforming limit of $832,750 in most areas (FHFA) |
| Closing costs | Varies by state, lender and title company | Your Loan Estimate |
| Cash reserves | Set by your lender | Often required on second homes |
The Federal Housing Finance Agency sets the conforming loan limit each year. For 2026, it’s $832,750 for a one-unit home in most of the country. Go above it and you’re in jumbo loan territory, with its own rules.
If you fund the $41,750 with a HELOC, you now carry three payments: your first mortgage, the HELOC and the new mortgage. Add property taxes, insurance and any HOA dues on both homes. Run that total against your income before you shop.
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Buy a home →Do you get a tax break on a second home?
Sometimes. The IRS says in Publication 936 that you can treat one second home as a qualified home for the mortgage interest deduction. If you rent it out part of the year, you must also use it yourself more than 14 days, or more than 10% of the days it’s rented, whichever is longer. Talk to a tax pro about your case.
What are the risks of a zero-down second home?
Borrowing 100% of the cost, even across two loans, means you start with no cushion. Here’s what that can mean:
- If prices dip, you can owe more than the home is worth. Selling would then cost you money.
- A HELOC usually has a variable rate, so the payment can rise.
- Your lender can freeze or cut a HELOC if your home’s value drops, per the CFPB.
- Your main home secures the borrowed down payment. Miss payments and it’s at risk.
- Second homes often need cash reserves, so you may still need savings even with the down payment covered.
Our view: a second home bought on borrowed equity only works if you could carry all the payments on your income alone, with no help from rental income. If it only works with perfect bookings, wait.
Not sure which mortgage fits? Start with our guide to the minimum down payment rules and what getting pre-approved really involves.
How can you lower the cash you need at closing?
You can’t skip the down payment on a second-home loan, but you can cut the cash around it.
First, get a buyer credit. Beycome’s buyer program charges buyers no upfront fee. When a seller offers buyer-agent compensation, Beycome keeps 1% of the price, with a $1,499 minimum, and credits the rest to you at closing. On a $417,500 home where the seller offers 3%, that’s 3% ($12,525) minus 1% ($4,175), or $8,350 back. That’s up to 2% back. If the compensation offered is below the $1,499 minimum, you cover the gap at closing.
That 3% figure is only an example. Commissions are not set by law or NAR rules and are fully negotiable. Sellers choose whether to offer any buyer-agent compensation, and how much. Since August 17, 2024, those offers can’t be shown on the MLS. Your lender must also approve any credit, and some loans cap it.
Second, if you’re selling your first home to fund the next one, keep more of your equity. A flat fee MLS listing from Beycome starts at $99, with $0 due to Beycome at closing. More equity kept is more down payment for the next place.
Third, in Florida or Texas, compare closing fees. Beycome Title charges a $99 settlement fee in Florida and $299 in Texas. Title insurance and other closing costs are extra.
Frequently asked questions
Can I buy a second home with no money down?
Not with a standard second-home loan. Fannie Mae allows up to 90% loan-to-value on a one-unit second home, so you need 10% down. Many buyers borrow that 10% from equity in their first home.
Can I use a VA loan for a second home?
Only if you’ll live in it. VA.gov says you must live in the home you buy with a VA-backed purchase loan. If the new home becomes your primary home, it can work.
How much down payment do I need for a second home?
Usually at least 10% on a conventional loan. On a $417,500 home, the September 2026 US median, that’s $41,750. Your lender may ask for more.
Can I use a HELOC for a second home down payment?
Yes, many lenders allow it if you qualify with the HELOC payment included. Your first home secures the line, so you could lose it if you can’t pay.
Can I rent out my second home?
Some renting is allowed on a Fannie Mae second-home loan, but you must live there part of the year. The rent can’t be used to qualify. A full-time rental is an investment property.
Is mortgage interest on a second home tax deductible?
It can be. IRS Publication 936 lets you treat one second home as a qualified home, with use rules if you rent it out. Ask a tax pro.
Do second homes have higher mortgage rates?
Often, yes. Fannie Mae applies a loan-level price adjustment to some second-home loans, which can raise your rate or fees. Compare Loan Estimates from several lenders.
This is general information, not financial, tax or legal advice. Loan rules change and vary by lender. Ask a licensed lender and a tax pro about your situation.
Loan rules are from Fannie Mae’s Selling Guide B2-1.1-01 and eligibility matrix, VA.gov and FHFA, read October 22, 2026. Median price and rates are from NAR’s September 2026 existing-home sales release.
Buyer program: no upfront fee. Beycome keeps 1% of the price, minimum $1,499, and credits the rest of the buyer-agent compensation the seller offers at closing. If the compensation offered is below the minimum, the buyer covers the gap at closing. Credits need lender approval, can be capped by loan type and depend on state rules.
Beycome prices are as of October 2026. “$0 at closing” means no Beycome fee at closing; other closing costs, taxes and title fees still apply. Beycome Title operates in Florida and Texas today, and Michigan, Ohio, Illinois and Indiana starting November 1, 2026.
Sources
- Fannie Mae Selling Guide, B2-1.1-01 Occupancy Types, read October 22, 2026.
- Fannie Mae Eligibility Matrix (one-unit second home purchase, 90% max LTV), read October 22, 2026.
- VA.gov, VA-backed purchase loan, read October 22, 2026.
- HUD Single Family Housing Policy Handbook 4000.1, occupancy requirements (60-day move-in, one year), read October 22, 2026.
- CFPB, What is a HELOC?, read October 22, 2026.
- FHFA, Conforming loan limit values for 2026, read October 22, 2026.
- IRS Publication 936, Home Mortgage Interest Deduction, read October 22, 2026.
- NAR, Existing-home sales, September 2026, published October 13, 2026.
- NAR, What the NAR settlement means for buyers and sellers, read October 22, 2026.
- Beycome, buyer program, October 2026.
- Beycome, listing package features, October 2026.
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