Buying a second home in OOB
Roughly half of OOB's housing stock is non-primary. Whether you're buying purely for personal use, partial rental, or a future retirement plan, the structural choices made at purchase determine your loan terms, insurance, tax treatment, and STR options.
Updated May 2026
Use intent matters at the loan level
'Second home' for Fannie/Freddie means owner-use 14+ days/year and no formal rental restriction in the loan documents. Pure investment is a separate product (DSCR or investment conventional). Mixed-use is a gray area, be honest with your MLO.
Tax treatment
Mortgage interest deductible on up to $750k combined primary + one second home (TCJA limits). Rental income from <14 days/year is excluded from income (Augusta rule). Above 14 days, full Schedule E with depreciation and expense allocation.
Insurance
Hazard premium ~30, 50% higher than primary on the same value (vacancy risk). Flood through NFIP or private. Liability layer through your existing umbrella.
Buying in an LLC
Most agency loans don't allow LLC ownership. DSCR programs do. If LLC ownership matters for liability, plan the financing structure first.
Compiled from Town of Old Orchard Beach, RSU 23, FEMA, Maine Revenue Service, US Census, and MLS. Deemed reliable but not guaranteed; verify before any transaction.