Reference no: EM133102900

Occupancy Second Home

If the Borrower obligated on a loan declares they will occupy the subject property as a second home, the following must be true or the loan is ineligible to the Lender: 

• The location of the subject property must be reasonable for second home use (for example if the Subject Property is in the same neighborhood as the borrowers' primary residence and such area has no appeal as a vacation destination, it would not be a reasonable second home; second homes should generally be either in a vacation destination or in a city distant from the borrowers) 
• If the purpose of the loan is for a refinance, the borrower must not have rented the subject property for more than two weeks with minimal rental income; 
• For not less than fifty weeks per year, the subject property must be for the borrowers' exclusive usage, no time shares a permitted, and the subject property may not be for the use of a family member, for example a second home may not be occupied as the residence of the Borrower's parents or children.   
• The Subject Property must be suitable for year-round use

Question:

The appraisal for a second home purchase transaction indicates it is a lake front condo. In reviewing the transaction, you discover the condo is located only 6 miles from the borrower's primary residence. Would this transaction be acceptable as a second home given its location to the primary residence?