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11 North Water Street 10th Floor, Mobile, AL 33602

45 Rockefeller Plaza 20th Floor, New York, NY 10111

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TIN FUNDING GROUP

Vacation Rental Property Loans

A Loan Program Designed for Only One Thing: Vacation Rentals

Our vacation rental loan program is underwritten based on property level cash flow and borrower credit, rather than the borrower’s income. As a result, our vacation investment property loans are the market leader for self-employed investors and investors building a portfolio of vacation rental properties.

  • Common sense underwriting of your short-term rents
  • Full 30 year terms (no balloons) for your peace of mind
  • No tax returns required
  • Simple, haggle-free pricing you can depend on
  • Protect your identity and other assets by borrowing in a corporate entity
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Finance Your Investment Property Today

TFG’s vacation rental program is meant to be scalable, and there is no hard limit to how many properties an investor can finance with us. We provide purchase and refinance financing up to 80% LTV. Commonly, a customer obtains a cash-out refinance from TFG to purchase or improve another vacation rental property.

Application Stage

You provide us a completed application and pay for the appraisal. We evaluate your credit.

Processing

One of our loan processors is assigned and works with you on gathering the rest of our required documentation.

Closing Stage

Your Processor submits full loan package to underwriting team; once approved we schedule your closing.

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How To Qualify For A Vacation Rental Home Loan

TFG has mastered the vacation rental loan process, providing over $545 million in loans to investors looking to develop a strong rental income through vacation rental properties. Our qualification requirements are simple and straightforward. They include the following four main areas of focus.

Meet Minimum Requirements

Funding requirements are higher for a second home than for a primary home, as are the credit score requirements. Ensure that your vacation property meets these minimum thresholds:
  • Minimum property value of $150,000
  • Minimum loan value of $75,000
  • Minimum credit score of 680
Also, you should not have had any bankruptcies in the last four years and no foreclosures within the last three years.

Prepare Documents

For loans on vacation rentals, you don’t need to provide things like tax returns and pay stubs, but there are still some essential documents required, including the following:

  • One form of ID for every guarantor
  • Voided check
  • Insurance declaration page
  • Title company contract
  • Business entity documents if you are borrowing through a company
  • HOA contact information, if applicable
  • Current lender information if this is for a cash-out refinance
  • Purchase contract
  • Addendums to purchase contract

Tin Funding Group has an incorporated appraisal process, which we will undertake once you complete the application, but we may ask for additional documentation on lease agreements or rental history.

Down Payment Requirements

In general, you should expect to pay 25% down on a vacation rental unless you have a very good FICO score, in which case you may be able to negotiate for only 15% down. Sometimes, lenders may request up to 35% if your credit score is lower than their expectations.

Ensure the Property Is Rent-Ready

When buying a vacation rental home with a loan, the lender typically requires it to be rent-ready and in C4 condition. If your property has significant construction or renovation costs, this will need to be financed through a different lender.
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What to Consider When Financing a Vacation Rental Property

Choosing income-generating second homes requires significant market research, as well as a solid understanding of the costs associated with maintaining a vacation property. Here are some of the most salient factors you must include when deciding to invest in vacation rentals.

Scout potential vacation rental properties

Look at a variety of different markets before narrowing it down. Start at the state level, break it down by regions, and then begin investigating cities to find the most profitable market and property.

Rental income

Look at property values, occupancy rates, and average nightly rates, then use this data to assess cash flow, ROI, and cash-over-cash return. Visio Lending has a variety of helpful rental property calculators that can assist in your assessment.

Investment property location

Get down to the street level and assess why a particular vacation home may be a good investment. This involves proximity to attractions, local transport options, and the general neighborhood.

Tax benefits

Each state has different tax requirements, as well as different tax breaks. Working with a financial advisor can be helpful at this step.

Property management

Property management includes guest communication, marketing, cleaning, management and upkeep, and furniture replacement.

Operating expenses

Some other operating expenses include mortgage payments, insurance, pest control, repairs, and payroll.

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