Second-Home Mortgages: Frisco Buyer Basics

Dreaming of a basecamp in Frisco where you can ski in the morning and unwind by the marina in the afternoon? If you’re eyeing a vacation home in Summit County, the financing details can feel more complex than a blue-to-black run. You want clear numbers, realistic expectations, and a smooth path from offer to closing. This guide breaks down second-home mortgages for Frisco buyers so you can plan your purchase with confidence and avoid costly surprises. Let’s dive in.

Second home vs investment property

The way your lender classifies the property drives everything from your rate to your down payment.

• Second home: You plan to occupy the property part of the year and it is not your primary residence. It is not primarily a rental.
• Investment property: You buy it mainly to generate rental income and do not intend regular personal occupancy.

Lenders look at your stated intent, how far the property is from your primary home, and whether you’ll offer it as a short-term rental. If frequent short-term rental use or a rental pool is part of your plan, many lenders will treat the loan as an investment mortgage rather than a second-home loan. Government-backed programs like FHA and USDA are typically for primary residences, and VA is designed for primary-use with narrow exceptions. Conventional conforming loans are the usual route for second homes.

What lenders expect in Summit County

Resort markets like Frisco often come with “overlays,” or stricter rules on top of standard guidelines. Here is what you should expect.

Down payment

• Second-home conventional loans commonly require 10% to 20% down when you meet lender criteria. In resort areas, 20% is more common.
• Investment property loans usually require 15% to 25% down for a single-unit purchase, with higher percentages for multi-unit or higher-risk scenarios.
• Jumbo loans often require 20% to 30% or more, especially in seasonal markets.

Credit score and pricing

• Many conventional programs start approvals around 620+, but resort-area second homes typically price better with higher scores, often 680 to 740+.
• Expect a modest rate premium over primary-residence loans for second homes. Investment loans generally cost more than second-home loans, and jumbo pricing can layer on an additional premium.

Reserves and DTI

• Reserves: Plan for 2 to 6 months of PITI for second homes and 6 to 12 months for many investment scenarios. Lenders can count liquid brokerage and some retirement funds; check how your lender treats accounts with withdrawal penalties.
• DTI: Many conforming loans cap DTI around 45%, with some exceptions up to 50% for strong files. Expect tighter limits for second homes and investments.

Mortgage insurance and occupancy

• If you put less than 20% down on a conventional loan, PMI may apply. Availability for second homes varies by insurer and lender.
• You will sign an occupancy statement. If your plans center on short-term rentals, lenders often reclassify to investment underwriting.

Property types in Frisco: condos, condo‑hotels, and STRs

Condos and condo‑hotels

Condo‑hotels (often called condo‑tels) operate with hotel-style management and rental pools. Lenders view these as higher risk because project revenues and owner access can look more commercial than residential. Many conforming lenders will not finance condo‑tels as warrantable second homes. If the project is non‑warrantable, you may need a portfolio or specialty loan, expect a larger down payment, and budget for higher rates. If a unit participates in a rental pool, lenders commonly treat it as an investment property.

Warrantable vs non‑warrantable projects

Condo projects go through a review of HOA budgets, reserves, owner-occupancy levels, special assessments, and commercial space. Common flags include a single entity owning a high share of units, high investor concentration, delinquent HOA dues, or frequent special assessments. Non‑warrantable status usually points you toward a portfolio lender with stricter terms.

Short‑term rentals and local rules

Many buyers plan some short-term rental use. In Frisco and Summit County, short‑term rentals are regulated through local permits, lodging taxes, and occupancy rules that change periodically. Always confirm local requirements and your HOA’s rental policies before you assume rental income or availability. For underwriting, consistent STR use or rental-pool participation often triggers investment classification with higher down payments, stricter reserves, and higher rates.

Rates, appraisals, and timing in a resort market

Mortgage rates rose sharply in 2022 and remained volatile through 2023 into mid‑2024. Second-home and investment loans price with premiums over primary-residence loans, and resort-area jumbos can add another layer. In a small market like Frisco, appraisals rely on limited comparable sales. If your property is unique or in a condo‑tel, underwriting and appraisal reviews can take longer. Build in extra time for HOA document reviews and project approvals, and be ready with an appraisal gap plan if needed.

A step‑by‑step game plan

Follow these steps to keep your purchase on track:

1. Get a true second‑home pre‑approval. Ask lenders for written program details: down payment, reserve requirements, credit and DTI limits, and rate quotes specific to Summit County. Include HOA dues and potential assessments in your numbers.

2. Compare lenders with local expertise. Community banks, regional lenders, and brokers who regularly finance Summit County second homes and condo‑tels can clarify project eligibility early and reduce surprises.

3. Document funds and reserves. Gather 60 days of bank/brokerage statements and proof of down-payment sources. Confirm which accounts your lender counts as reserves.

4. Verify rental rules first. Check current Town of Frisco and Summit County STR requirements. Then review HOA bylaws, meeting minutes, budgets, reserve studies, and insurance certificates. Ask for any rental-pool or manager agreements if it is a condo‑tel.

5. Underwrite the HOA. Watch for large special assessments, high delinquency rates, or low reserves. These can affect lender approval and your monthly costs.

6. Price your insurance. Mountain properties can have higher premiums due to snow load, freeze risk, and wind or hail. If you plan to rent, ask about policies that cover STR activity.

7. Plan your appraisal strategy. If comps are thin, discuss value support with your agent before you offer. Be prepared with extra down payment or an appraisal gap plan.

8. Talk to a CPA about taxes. If you intend to rent, get guidance on depreciation, expense tracking, and how local lodging taxes interact with your plans.

Offer strategies that work in Frisco

• Strengthen your financing. A detailed second‑home pre‑approval letter tailored to the property type helps sellers trust your offer.
• Right-size your earnest money. Consider your risk tolerance and use contingencies strategically.
• Address potential appraisal gaps. If you can, outline your plan to cover a shortfall.
• Build realistic timelines. Allow extra time for HOA review, condo project approval, and any condo‑tel underwriting.
• Keep inspection practical. Focus on big-ticket systems and mountain-specific issues like roof condition and plumbing for freeze protection.

Quick checklist for Frisco second‑home buyers

• Pre‑approval from a lender who finances second homes in Summit County.
• Down payment and reserves documented; recent bank/brokerage statements.
• If you plan to rent: two years of rental history or tax returns if you want to use rental income to qualify.
• Full HOA packet: CC&Rs, bylaws, budgets, reserve studies, insurance, meeting minutes.
• Confirmation of STR rules from the Town/County and your HOA.
• Property tax verification and any special assessments.
• Insurance quotes, including STR coverage if applicable.

Common mistakes to avoid

• Assuming any condo in Frisco is financeable as a second home. Condo‑tel or non‑warrantable status can require specialty financing.
• Counting on projected STR income to qualify. Lenders typically want documented history, not projections.
• Underestimating reserves. Many second‑home loans require months of PITI left after closing.
• Ignoring HOA health. High special assessments or delinquency rates can derail loans and budgets.
• Compressing timelines. Condo and condo‑tel reviews take longer; build in buffer.

How we help you buy with confidence

You deserve clear guidance, strong local intel, and a financing plan that fits Summit County realities. From screening properties for warrantability to coordinating with experienced lenders and reviewing HOA packages, you can move forward with clarity and fewer surprises. If you are exploring a Frisco second home, connect with a local, concierge-level advisor who has deep experience with resort purchases and rental considerations.

Ready to take the next step? Reach out to Tanya Delahoz for a personalized plan tailored to your goals in Frisco and across Summit County.

FAQs

What is a second‑home mortgage for a Frisco property?

• It is a conventional loan for a home you occupy part of the year that is not your primary residence and is not primarily used as a rental; lenders price it slightly higher than primary-residence loans.

How much down payment do I need for a Frisco second home?

• Many conforming second‑home loans require 10% to 20% down, while investment and jumbo loans often require larger down payments; confirm exact terms with your lender.

Are condo‑hotels in Frisco easy to finance as second homes?

• Not usually; many condo‑tels are considered non‑warrantable and require portfolio or specialty loans with higher rates and larger down payments.

Can I use projected Airbnb income to qualify for a mortgage in Summit County?

• Lenders typically require documented rental history or tax returns and rarely accept projections alone, especially for short‑term rentals.

How do Frisco short‑term rental rules affect my loan type?

• If your plan is frequent short‑term rentals or a rental pool, many lenders classify the property as an investment, which means higher down payment, stricter reserves, and higher rates.

What reserve funds do lenders want for a Frisco second home?

• Expect 2 to 6 months of PITI for second homes and 6 or more months for investment properties, with higher requirements common for self‑employed borrowers or jumbo loans.