Second Homes with Rental Income – OK!

True Example – Borrowers are snowbirds, who live in Minnesota, and they buy a second home in Palm Springs, CA.  During the course of the year they stay in the Palm Springs house for the winter months and rent it out for a couple months a year to not-so-good friends.

Being good citizens, they report the rental income on their tax returns.

Now they want to refinance and every lender is countering them to an investment property because of the rental income showing up on their tax returns.

But we all know it’s really a second home with reasonable rental income.  We consider this a second home, not an investment.