Indiana Second Home Loans and Mortgage Solutions

Financing Your Dream Second Home

Looking to purchase a part-time home in Indiana? Whether it's a lake house in Kosciusko County or a weekend condo in Indianapolis, BNB Lending offers flexible financing options for second homes across the state. We guide buyers through mortgage qualification, local tax obligations, and short-term rental regulations. Our loan programs are designed for borrowers who want personal-use properties with limited rental income. From STR tax implications to zoning compliance, we help you structure your second home loan in Indiana to match your lifestyle and investment goals.

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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 Indiana?

Indiana follows standard second home lending rules. The property must be a single-unit home suitable for year-round occupancy, used by the borrower for part of the year, and not primarily rented. Most lenders require a 10–20% down payment, strong credit, and documented income. The state of Indiana does not add additional restrictions to federal lending guidelines. However, local zoning ordinances or HOA rules may influence property use. At BNB Lending, we evaluate your full financial profile and property plans to determine if your home qualifies for second home loan benefits.

How do short-term rental restrictions affect loan eligibility?

Short-term rental activity can affect whether your loan qualifies as a second home loan or must be structured as an investment mortgage. If you intend to rent out the property frequently, it may not meet second home occupancy standards. In Indiana, there is no statewide STR law, but cities like Indianapolis may require rental registration and sales tax compliance. The state applies a 7% sales tax to short-term lodging. At BNB Lending, we review your rental plans and local regulations to help align your financing with lender requirements and intended property use.

Do second homes qualify for property tax relief in Indiana?

Indiana second homes do not receive the same tax benefits as primary residences. The state offers a mortgage deduction credit through the Homeowners’ Tax Credit, but this only applies to owner-occupied primary homes. All real property, including second homes, is taxed, and commercial lodging is assessed at 100% of true value under Class 4. While Indiana’s tax rates are moderate compared to other states, second homes are taxed without exemption. At BNB Lending, we help evaluate property tax impacts so you can plan for all costs associated with your second home.

Can I deduct mortgage interest on a second home?

Yes, Indiana allows mortgage interest to be deducted on your state tax return if you itemize. At the federal level, you can also deduct interest on second homes, subject to IRS limits and use conditions. If your property generates rental income, you may need to prorate deductions based on personal versus rental use. BNB Lending structures your mortgage to align with potential tax benefits and encourages buyers to consult a CPA familiar with Indiana tax rules and federal guidelines to optimize deductions.

Are there second home loan programs in Indiana?

The Indiana Housing and Community Development Authority (IHCDA) does not offer any loan programs for second home purchases. Its assistance is limited to primary residences for first-time buyers and qualifying households. For vacation or part-time homes, buyers must use private lenders. BNB Lending provides second home loans throughout Indiana with competitive rates and personalized support. Whether you’re eyeing a lakefront escape or a seasonal city retreat, we help structure your loan around Indiana’s property tax system and short-term rental policies.

What types of homes can qualify for second home loans?

Eligible homes must be one-unit residences that are livable year-round and used primarily for personal occupancy. These include condos, townhomes, and detached houses. The home must meet lender appraisal standards and be free from timeshare arrangements. In Indiana, local municipalities may regulate short-term rental activity, especially in resort areas. These rules can affect how the property is classified and financed. At BNB Lending, we assess your intended use and ensure the home aligns with second home guidelines before recommending a loan structure.

Who benefits from choosing a second home loan over an investment loan?

These loans are perfect for self-employed individuals, LLCs, and investors managing multiple properties. If you plan to use your Indiana 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 Indiana second home loans to provide flexibility while keeping your financing compliant with lender and zoning guidelines.

Thinking beyond Indiana? Explore short term rental loans and second home opportunities in nearby states like Illinois or Ohio to expand your portfolio.