Second Home for College

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🏠 Buying a Second Home for Your College Student in Louisiana

Helping your child secure comfortable, stable housing near campus can be a smart financial move—and it doesn’t have to mean the higher costs of an investment property. Under Fannie Mae’s occupancy rules, you can finance a second home for a college‑bound son or daughter and still qualify for owner‑occupied (primary residence) terms, as long as specific requirements are met.

🔎 1. Fannie Mae’s “Second Home”

A second home is a one‑unit property that the borrower occupies for part of the year. It must be:

  • Suitable for year‑round living

  • Owned and controlled exclusively by you (the parent)

  • Not a rental or timeshare

By meeting these criteria, the property avoids the higher down payments and rates of investment loans.

✅ 2. How It Works for College Housing

  1. Ownership & Occupancy

    • You, the parent, are the borrower and owner.

    • You must occupy the home for a portion of the year—for example, summer, winter, and school breaks—to satisfy the “second home” rule.

    • Your child lives there during the academic terms as your designated occupant.

  2. No 20% Down Payment Required

    • As a second home, you can often qualify with as little as 5–10% down, rather than the 20% that investment properties typically demand.

  3. Loan Programs You Can Use

    • Conventional (Fannie Mae/Freddie Mac): Second‑home financing with down payments starting at 5–10%.

    • Jumbo Loans: If the home price exceeds conforming limits, jumbo financing is available with similar second‑home occupancy rules.

🆕 3. Primary Residence Option via Co‑Borrower Occupancy

If you’d prefer to classify the home as your student’s primary residence—unlocking even better terms—you can:

  • Add your child as a co‑borrower on the loan.

  • As long as at least one borrower (your student) occupies the home as their principal residence, it meets Fannie Mae’s primary‑residence definition.

  • Your student’s income doesn’t need to qualify on its own, because you (the non‑occupying co‑borrower) provide the qualifying income, credit, and reserves.

Additional Benefits of Primary‑Residence Classification

  • Lower Down Payment & Rates: Qualify with as little as 3–5% down and access the best conventional rates.

  • Reduced Property Taxes: Primary residences in Louisiana receive a homestead exemption on the first $7,500 of assessed value—saving you roughly $750‑$800 per year on parish property taxes Louisiana Law Help.

  • Owner‑Occupant Protections: Some local programs and grants apply only to primary residences.

📋 4. Steps to Finance Your Child’s College Home

  1. Get Pre‑Approved

    • Document your income, assets, and credit—your approval is based on you and your co‑borrower as a household.

  2. Choose the Right Property

    • One‑unit homes only. Ensure it’s close enough to campus that it truly serves your child’s needs.

  3. Plan Your Occupancy

    • Block out at least 30–60 days per year if you use the second‑home route, or have your student occupy full‑time as a primary residence if you co‑borrow.

  4. Submit Your Offer

    • Work with your real estate agent to draft an offer, include your pre‑approval letter(s), and highlight the intended occupancy plan.

  5. Close & Move In

    • After closing, furnish the home for your child—and enjoy your time there too when breaks roll around!

🎯 5. Benefits for Louisiana Parents

  • Equity Building: The home grows in value over time—no wasted rent checks.

  • Cost Savings: Avoid landlord markups and high campus–area rents.

  • Flexible Use: Enjoy the property yourself or let your student occupy full‑time.

  • Tax Savings: Homestead exemption on primary residences reduces your annual property tax bill.

📞 Ready to Learn More?

At Parish Lending, I specialize in creative occupancy strategies that save you money and give your student a secure place to live. Let’s discuss your goals and local market options.