Freddie Mac Eases Down Payment Requirements for 2-Unit Primary Residences and Second Homes

Posted On April 03, 2018

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This week, Freddie Mac announced updates to its loan-to-value (LTV) ratio guidelines for purchases and “no-cash-out” refinance mortgages used for second homes, any 1-unit residential property owned by the borrower but only occupied for a portion of the year, and 2-unit primary residences, such as duplexes. 

Previously, 2-unit properties required a 20% down payment for 80% financing.  Now, 2-unit properties will only require a 15% down payment for 85% financing.  Second homes previously required a 15% down payment for 85% financing, will now require a 10% down payment for 90% financing.  This move is more in line with the LTV requirements Fannie Mae uses for these financing scenarios.

The relaxed guidelines will likely make it more affordable for home buyers seeking to purchase a second home or owners of second homes who are interested in refinancing to lower their monthly payment.  Purchasing a second vacation home is a great way to eliminate the unpredictable cost of a hotel or rental home and reinvest in an equity-building asset.  Second homeowners can also use the property whenever they want, without having to compete over hotel rates during peak vacation season.  Owners of 2-unit properties often benefit from the rental income generated by their second residence and having the option to provide housing for adult children or aging parents. 

CMG Financial offers a robust selection of loan options for buyers looking to purchase or refinance a second home or 2-unit primary residence.  From our direct to agency loans to our proprietary All In One LoanTM to HomeFundItTM the down payment crowdfunding platform, CMG Financial works with borrowers to find the right loan for their current and future financial goals. 

For detailed information about the latest updates, please click here to access resource.


CMG Financial will be planning to implement these changes and will release updated guidelines in the coming weeks.