- Vacation home mortgages require at least 10% down and have stricter qualification standards than primary residence loans.
- Lenders classify South Carolina beach properties based on how often you intend to occupy them — this affects your rate and loan type.
- Rental income from a vacation home generally cannot be used to qualify for the mortgage unless it's classified as an investment property.
- Debt-to-income ratio and credit score requirements are tighter for second homes — typically 680+ credit and 43% or lower DTI.
- Working with a local lender familiar with Horry County vacation markets can streamline your approval process significantly.
Last updated: August 2026
Short answer: Vacation home mortgages in South Carolina require a minimum 10% down payment, a credit score of at least 680, and a debt-to-income ratio below 43% — stricter standards than a primary residence loan. Conventional and jumbo loans are the primary options since FHA and VA loans are restricted to primary residences, and rental income generally can't be used to qualify unless the property is classified as an investment property.
The dream of owning a vacation home on the South Carolina coast is well within reach for many buyers — but the path to financing one is different from buying a primary residence. Lenders apply stricter underwriting standards, higher down payment requirements, and different loan classifications to vacation and second home purchases. Understanding these nuances before you make an offer can mean the difference between a smooth closing and a frustrating delay.
Whether you're eyeing a beachfront condo in Myrtle Beach, a waterfront cottage along the Intracoastal, or a golf villa in one of the Grand Strand's premier communities, securing a vacation home mortgage requires preparation. This guide walks you through everything you need to know — from how lenders define a vacation home to the specific financial benchmarks you'll need to hit.
How Do Lenders Define a Vacation Home vs. an Investment Property?
Lenders classify a home as a second home if you'll personally occupy it part of the year, or as an investment property if you plan to rent it out most of the time — the investment classification requires a larger down payment and carries a higher interest rate. Before you apply for a mortgage, you need to understand how your lender will classify your property. This classification drives everything from your interest rate to your down payment requirement to whether rental income can help you qualify.
A second home (vacation home) is a property you intend to occupy personally for some portion of the year. Lenders typically require that the home be located a reasonable distance from your primary residence — usually at least 50 miles — and that it not be subject to rental management agreements that obligate occupancy to tenants for the majority of the year. Most South Carolina beach properties qualify as second homes when buyers plan to use them seasonally.
An investment property, by contrast, is purchased primarily to generate rental income. If you plan to rent the home out most of the year and use it yourself rarely or not at all, lenders will classify it as an investment property — which typically means a higher interest rate (often 0.5% to 0.75% higher than a second home) and a larger down payment requirement (usually 20–25%).
If you're also weighing when to sell your current home to fund the down payment, our seller resources can help you understand timing and equity options before you commit to the vacation purchase.
What Down Payment and Credit Score Do You Need for a Vacation Home Mortgage?
Most lenders require a minimum 10% down payment and a 680+ credit score for a second home, with better terms available at 20% down and a 720+ score. Vacation home financing is more demanding than primary residence financing. Here's what conventional lenders generally expect:
Down payment: A minimum of 10% is required for second homes, though many lenders prefer 20% to avoid private mortgage insurance (PMI) and to qualify for the best rates. Some jumbo products for higher-priced coastal properties may require 25–30% down.
Credit score: Most lenders want a minimum of 680 for a second home, though scores of 720 or higher will unlock significantly better rates. The vacation home market in Myrtle Beach is competitive, and buyers with stronger credit profiles tend to close faster — as explored in our post on how to win a bidding war in Myrtle Beach.
Debt-to-income ratio (DTI): Lenders typically cap DTI at 43% for second home mortgages, meaning your total monthly debt obligations (including both the new vacation home payment and your primary mortgage) should not exceed 43% of your gross monthly income. Some loan products allow up to 45% with compensating factors.
Cash reserves: Many lenders require two to six months of mortgage payments in reserve for a vacation home — a higher standard than primary residences. If you're purchasing a second home while still carrying a primary mortgage, reserves become especially important to demonstrate.
Loan Types Available for South Carolina Vacation Homes
Not all mortgage products are available for vacation home purchases. Here's a breakdown of what typically qualifies:
Conventional loans are the most common choice for vacation homes. Fannie Mae and Freddie Mac both offer second home programs with 10% down, and rates are only marginally higher than primary residence rates — typically 0.25% to 0.5% more.
Jumbo loans are often necessary for higher-priced Grand Strand properties above the conforming loan limit (currently $806,500 for most South Carolina counties as of 2025). Jumbo lenders tend to be more conservative with DTI and credit requirements.
FHA and VA loans are generally not available for vacation homes — they are restricted to primary residences. If you're a veteran looking to purchase a Myrtle Beach vacation property, you would need to use a conventional or jumbo product.
Portfolio loans from local banks and credit unions sometimes offer more flexibility for vacation properties, especially in markets like Myrtle Beach where lenders understand the seasonal rental landscape. These products may allow slightly more lenient DTI ratios or consider rental income more favorably.
If you're still exploring the buying process more broadly, our buyer resources provide a comprehensive overview of how the purchase process works in Horry County.
Can Rental Income Help You Qualify for a Vacation Home Mortgage?
Generally no — for a property classified as a second home, lenders require you to qualify using your existing income alone; rental income only counts toward qualification if the property is classified as an investment property. One of the most common questions from vacation home buyers is whether rental income — from Airbnb, VRBO, or a property management company — can help them qualify for the mortgage. The answer depends on how the property is classified.
For properties classified as second homes, rental income generally cannot be used to qualify. Lenders assume you'll occupy the property personally, and any rental income is considered speculative. You must qualify based on your existing income alone, which is why meeting the DTI thresholds described above is so important.
For properties classified as investment properties, lenders will typically allow 75% of projected rental income (using a signed lease or market rent appraisal) to offset the new mortgage payment in your DTI calculation. This can make it easier to qualify on paper, but you'll pay more in rate and down payment.
Some buyers choose to deliberately purchase as an investment property to take advantage of rental income qualifying — then transition their personal use patterns over time. It's worth discussing this strategy with both your lender and your tax advisor, since the IRS also has rules about vacation home rental income that affect your deductibility.
Frequently Asked Questions
Can I use a conventional loan to buy a vacation home in Myrtle Beach?
Yes. Conventional loans backed by Fannie Mae or Freddie Mac are the most common financing option for vacation homes in South Carolina. These loans require a minimum 10% down payment, a credit score of at least 680, and a DTI ratio below 43%. Interest rates are typically 0.25%–0.5% higher than rates for a primary residence.
What is the minimum down payment for a vacation home in South Carolina?
The minimum down payment for a second home classified as a vacation property is 10% with a conventional loan. However, many buyers put down 20% to avoid private mortgage insurance and secure a better rate. Investment properties — those purchased primarily for rental income — typically require 20–25% down.
Can I use rental income from my Myrtle Beach vacation home to qualify for the mortgage?
If the property is classified as a second home, rental income generally cannot be used to qualify for the mortgage. Lenders require you to qualify based on your existing income. If the property is classified as an investment property, lenders may use 75% of projected rental income in your qualification calculation, though rates and down payment requirements will be higher.
What credit score do I need to buy a vacation home in South Carolina?
Most lenders require a minimum credit score of 680 for a vacation home mortgage, but a score of 720 or higher will qualify you for the best rates and most loan products. Lower scores may still qualify with larger down payments or compensating factors, but the rate premium can be significant on a second home purchase.
Are FHA or VA loans available for vacation homes in Myrtle Beach?
No. FHA and VA loans are restricted to primary residences and cannot be used to purchase vacation or second homes. Veterans looking to buy a vacation property in Myrtle Beach must use a conventional or jumbo loan product instead.
