Illinois Second Home Loans and Mortgage Solutions

Financing Your Dream Second Home

Thinking of buying a second home in Illinois? Whether it’s a vacation condo in downtown Chicago or a peaceful retreat in Galena, BNB Lending helps you finance properties meant for personal use with occasional rental income. Our second home loans follow federal occupancy standards and are structured to meet lender and local tax guidelines. From Cook County property taxes to municipal STR rules, we help you navigate the complexities of owning a second home in Illinois—so you can purchase with confidence and enjoy your investment.

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How to qualify

To obtain a quote, we will need the following information:

Property Value and

 Purchase Price


Down Payment

Amount


Credit Score

 

Asset Types

  • Single Family Homes
  • Townhomes
  • Condos
  • 2 - 4 Units (Duplex, Triplex, Quadplex)
  • Multi-Family: 5 - 8 Units
  • Mixed-Use: 2 - 8 Units
  • Multi-Family: 9+ Unit



Loan Terms


  • Loan Sizes: $100k up to $3.5 Million (Larger loan sizes available on a case by case basis)
  • Purchase LTV: Up to 85%
  • Rate & Term Refinance LTV: Up to 80% 
  • Cash Out Refinance LTV: Up to 80%
  • Amortization: 30 Year % 40 Year Amortization Options Available
  • Term Lengths: 5/6 ARMs, 7/6 ARMs, 10 Year Interest Only, 30 Year Fixed & 40 Year Fixed
  • Floor Rate: 5.50% (subject to change daily due to market volatility)
  • Full Recourse with personal guarantee required for all borrowers with majority ownership (typically 20%+ or 25%+ if closing in an Entity)
  • DSCR Requirement: 1.00x or greater depending on loan size and property type. Sub-1.00x DSCR and NO DSCR options available.
  • Vesting: Lending to Individuals, LLCs, and Corporations. Trusts Allowable on a Case by Case Basis.
  • Average Time to Close: 14 to 35 days

Wondering if you qualify for investment property financing in your area?


We offer lending services in all 50 states!

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Frequently Asked Questions

What are the requirements for a second home loan in Illinois?

Second home loans in Illinois follow standard lending criteria. The property must be a one-unit dwelling that’s suitable for year-round use and personally occupied by the borrower for part of the year. It must not be used primarily as a short-term rental or titled under an LLC. While Illinois does not add any distance or state-level restrictions, local zoning and condo bylaws may apply. Most lenders require a 10–20% down payment, strong credit, and documented income. At BNB Lending, we review your specific property, location, and intended use to ensure it qualifies for second home financing.

How do short-term rental regulations affect financing eligibility?

Short-term rental use may affect how your home is classified for mortgage purposes. If you plan to rent it frequently, the property might be treated as an investment—requiring different loan terms. In Illinois, there’s no statewide STR restriction, but cities like Chicago have their own licensing, registration, and tax requirements. Many condo associations and HOAs also restrict rental durations. At BNB Lending, we analyze your intended use and guide you toward the appropriate loan product—making sure your mortgage structure aligns with local rules and your long-term ownership goals.

Do second homes receive any property tax breaks in Illinois?

No, Illinois second homes do not qualify for homestead exemptions or other residential property tax reductions. Property taxes in the state are among the highest in the country, especially in Cook County. Real property is assessed at approximately 33% of market value, and second homes are taxed at the same rate as other non-owner-occupied properties. If your property is also used as a short-term rental, it may fall into a different tax classification depending on the municipality. BNB Lending helps you assess potential tax liabilities before closing, so you're fully prepared.

Can I deduct mortgage interest on a second home?

Yes, you can deduct mortgage interest on a second home at both the federal and Illinois state level if you itemize your deductions. The property must be for personal use and fall within IRS loan limits. If the home is rented out for part of the year, interest deductions may need to be prorated based on how many days it's used personally. BNB Lending structures your loan with tax efficiency in mind and encourages you to work with a CPA familiar with Illinois property law and federal reporting requirements to maximize your deductions.

Are there second home loan programs in Illinois?

Illinois does not offer any state-backed programs for second homes or vacation property purchases. The Illinois Housing Development Authority (IHDA) focuses exclusively on primary residences, offering assistance to first-time buyers, veterans, and low-income households. For second home purchases, buyers must work with private lenders. At BNB Lending, we provide flexible second home financing options statewide—from Chicago condos to waterfront homes in Lake County. We help you navigate STR tax rules, local zoning, and property classifications to ensure your loan is compliant and built around your goals.

What types of properties are eligible for second home loans?

Eligible properties include single-family homes, condos, and townhouses that are livable year-round and used primarily for personal occupancy. Properties must meet lender standards for condition and appraisal. Second homes cannot be timeshares, subject to short-term rental agreements exceeding allowable limits, or used primarily for business. HOA and municipal rules in Illinois cities may restrict rental use, which affects financing eligibility. At BNB Lending, we evaluate your target property, zoning, and intended use to ensure it meets second home lending criteria before you make an offer.

Who should consider a second home loan instead of an investment loan?

These loans are perfect for self-employed individuals, LLCs, and investors managing multiple properties. If you plan to use your Illinois home primarily for personal stays and only rent it occasionally, a second home loan may offer better rates and terms than an investment loan. These loans must be in your personal name—not held by an LLC. BNB Lending structures Illinois second home loans to provide flexibility while keeping your financing compliant with lender and zoning guidelines.

Thinking beyond Illinois? Explore Airbnb loans and second home opportunities in nearby states like Wisconsin or Indiana to expand your portfolio.