What counts as a second home? A lender's occupancy class rather than a count of houses: a one-unit home the owner occupies part of the year, keeps under their own control, and does not rent out full time.
Second home is a lending classification, not a count of the houses somebody owns. Every mortgage is written against one of three occupancies, primary residence, second home or investment property, and the borrower certifies which one at closing. A second home is commonly a one-unit property, suitable for year-round use, occupied by the owner for some part of the year, under the owner's own control rather than a rental management agreement, and a reasonable distance from the primary residence. Lenders vary the details. The certification is the same everywhere, and misstating it is loan fraud.
The classification is priced. Second-home financing commonly asks 10 percent down against the 3 to 5 percent a primary residence can be bought with, carries a rate above a primary residence and below an investment property, and counts the full payment on both homes in the debt-to-income ratio, because there is no rental income to offset it. Insurance is its own question, since a policy for a home that stands empty part of the year is not the policy for a home somebody lives in, and the carrier has to be told which it is.
In Nevada the property tax cap follows occupancy too. NRS 361.4723 caps the annual increase in the bill at 3 percent for an owner-occupied primary residence, and NRS 361.4722 allows up to 8 percent on other residential property, so a second home can be billed against the higher cap. The claim is filed with the county assessor and the current rule is worth verifying there. Renting the home out changes the answer again in three places at once: at the lender, at the insurer, and at the county, where short-term rentals are separately licensed.
A worked example
A $380,000 one-unit home bought as a second home: 10 percent down is $38,000, against the $13,300 a 3.5 percent FHA purchase of a primary residence would need. The lender counts both housing payments in the debt-to-income ratio, so a $2,050 payment here lands on top of a $2,400 payment at home, and the tax bill is capped at up to 8 percent a year rather than 3 percent.
Run the payment on a second home
Questions people ask
How much down payment do you need for a second home?
Commonly 10 percent, and lenders set their own floors above that for smaller loans or weaker files. FHA, VA and USDA financing is for a primary residence, so the low down payment programs do not apply, and mortgage insurance is available but priced higher than on a primary residence.
Can you rent out a second home?
Occasional rental is commonly allowed, but a home under a rental management agreement or rented full time is an investment property to the lender, a different risk to the insurer, and in Clark County a separately licensed use. Check all three before listing it anywhere, because the loan was written on the occupancy that was certified.