Texas Hill Country
Lake Travis, Marble Falls, Fredericksburg, Wimberley. Popular for weekend escapes from Austin and San Antonio. Higher-end properties often land in Jumbo territory.
Buying a second home in Texas.
Vacation property, family home, or in-state retreat — second-home financing rules differ from primary residence and investment property. Here's what Texas buyers need to know.
What counts as a second home.
A second home is a 1-unit residence you occupy at least part of the year, separate from your primary home. The category sits between primary residence (where you live full-time) and investment property (which you rent full-time and never occupy).
The IRS test for second-home tax treatment is whether you use it personally for at least 14 days per year (or more than 10% of rental days, whichever is greater). The lender test is similar but stricter — most investors require that the property not be rented full-time and that it sit at least 50 miles from your primary residence.
This distinction matters because financing terms are dramatically different. Second-home loans price close to primary-residence loans (a small Loan-Level Price Adjustment hit). Investment-property loans price meaningfully higher — sometimes a full point in rate or more. Calling a true investment property a "second home" to chase better pricing is occupancy fraud and is a federal crime. We pin down occupancy at the start of every file.
Three programs most Texas second-home buyers compare.
Government programs (FHA, VA, USDA) do not finance second homes — they are primary-residence-only. That leaves conventional second-home pricing, jumbo for higher-priced properties, or alt-doc programs like Asset Depletion for retirees buying off liquid assets.
Conventional Second-Home
Standard agency second-home pricing — typically 10% minimum down with 680+ FICO. Best when the home and your profile fit conforming guidelines.
Learn moreJumbo Loan
For higher-priced second homes above the conforming limit — Hill Country, Galveston Bay, or larger DFW second residences.
Learn moreAsset Depletion
Alt-doc qualifying for retirees and high-net-worth borrowers buying a second home off liquid assets instead of W-2 income.
Learn more
Second-home requirements at a glance.
- 10–20% minimum down payment (vs 0–3.5% for many primary-residence programs)
- Property must be at least 50–60 miles from your primary residence (lender rule, varies)
- Property must be a 1-unit dwelling — single-family, townhouse, or condo
- You must occupy the property at least part of the year (not 100% rental)
- Stronger reserve requirements — typically 2–6 months PITI for both homes post-close
- 680+ FICO recommended for best second-home pricing
Talk to your CPA — not us — for tax planning.
Mortgage interest on a qualified second home is generally deductible (subject to current TCJA limits on combined acquisition debt). Property taxes are generally deductible inside the SALT cap. Rental days and personal-use days have specific reporting rules. We are mortgage brokers, not tax advisors — every second-home buyer should run the numbers with a CPA before closing.
Where Texans buy second homes.
We finance second homes across Texas. Four markets show up most often.
Texas Gulf Coast
Galveston, Pirates Beach, Crystal Beach, Port Aransas. Beach-house demand from Houston and the broader Gulf Coast. Confirm flood zone — properties in coastal areas often require flood insurance.
East Texas Lakes
Lake Tyler, Cedar Creek Lake, Lake Palestine, Toledo Bend. Lake-house markets popular with DFW buyers wanting a weekend property within driving distance.
DFW Metro Adjacent
Family second homes in Plano / Frisco / Allen near aging parents or married children, or city-pied-à-terre downtown Dallas / Fort Worth condos.
Common second-home questions.
What counts as a second home (vs investment property)?
A second home is a 1-unit residence you occupy at least part of the year, located a meaningful distance from your primary home (typically 50+ miles per lender overlays). It cannot be rented full-time. The IRS test is whether you use it personally for at least 14 days per year (or more than 10% of rental days, whichever is greater). An investment property is one you do not personally occupy and rent full-time. The financing is materially different — second-home rates and down payment requirements are closer to primary-residence pricing than to investor pricing.
What is the minimum down payment on a Texas second home?
Conventional second-home loans typically require 10% minimum down for qualifying buyers, though some lenders push it to 15–20%. Jumbo second-home loans usually start at 10–20% depending on loan amount and FICO. There is no government program (FHA, VA, USDA) that finances a second home — those are primary-residence-only.
Can I rent out my Texas second home?
You can rent it part-time, but you cannot rent it full-time and still call it a second home for financing. Most lenders require that you occupy the property at least part of the year and that any rental be limited (typically less than 14 days per year for true second-home treatment, though specifics vary by investor). If you plan to rent full-time, the property is an investment property and uses different financing — DSCR, conventional investor, or short-term-rental loans. Always confirm intended use with us before closing.
Are second-home rates higher than primary-residence rates?
Yes, modestly. Conventional second-home loans carry a Loan-Level Price Adjustment (LLPA) hit per Fannie / Freddie pricing — typically a fraction of a percent in rate vs primary residence. Jumbo second-home pricing varies by investor. The actual difference depends on FICO, down payment, and current LLPA grids — we model both before recommending one.
What about Texas property taxes and insurance on a second home?
Texas has no homestead exemption on a second home — only your primary residence qualifies. That means full property taxes (no homestead cap on assessed value increases). Insurance also runs higher: vacant-period coverage, hurricane / windstorm zones on coastal properties, and flood insurance where applicable. Build the higher carry into your monthly numbers from day one. We model PITI on the actual property, not a generic estimate.
Ready to finance your Texas second home?
We will pin down occupancy, model both conventional and jumbo, and tell you the real cash to close before you write an offer.