Kentucky Second Home Loans and Mortgage Solutions

Financing Your Dream Second Home

Ready to purchase a second home in Kentucky? Whether you're looking at lakefront property in the western region or a peaceful cabin in the Appalachians, BNB Lending offers tailored loan solutions for personal-use properties. Our second home mortgages follow federal guidelines and include flexible terms for borrowers who intend to occupy the property part-time. From lodging tax implications to local rental rules, we guide you through the entire process. If you’re exploring a seasonal or vacation property in Kentucky, our lending team ensures your financing strategy is compliant and personalized to your 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 Kentucky?

Kentucky follows standard second home lending requirements. The property must be a one-unit home used for personal occupancy at least part of the year and suitable for year-round living. It cannot be a timeshare or primarily income-producing. Most lenders require a 10–20% down payment, stable income, and a strong credit profile. While Kentucky does not impose extra occupancy rules, borrowers should still check for local zoning restrictions or HOA limitations. At BNB Lending, we assess your full borrower profile and intended property use to match you with the right second home loan.

How do short-term rental rules affect loan classification?

If your property is frequently rented out, it could be considered an investment by lenders, requiring different loan terms. While Kentucky does not regulate short-term rentals at the state level, many cities and counties require registration, inspections, or permits. The state also imposes a 6% lodging tax on short stays, which may signal commercial use. At BNB Lending, we help you determine whether your intended property use fits within second home guidelines and advise if investment loan structures are more appropriate based on your short-term rental plans.

Do second homes receive any property tax benefits in Kentucky?

Second homes in Kentucky do not qualify for the state’s mortgage credit available to primary residences. All real estate is assessed at 100% of its fair cash value, although millage rates in Kentucky are relatively low compared to other states. The mortgage tax credit is limited to homeowners living in the property full-time and is capped annually. If you own a second home in a resort or high-value area, your tax bill may still be significant. BNB Lending helps evaluate these costs during pre-approval so you can plan accordingly.

Can I deduct mortgage interest on a second home?

Mortgage interest on a second home may be deductible on both your federal and Kentucky state tax returns, provided you itemize deductions. The home must meet IRS requirements for personal occupancy and fall within the loan limits. If the property is rented out for part of the year, deductions may be prorated based on personal use. BNB Lending structures your loan to preserve any eligible tax benefits and recommends working with a CPA to ensure proper treatment under both federal and Kentucky tax codes.

Are there second home loan programs in Kentucky?

Kentucky Housing Corporation does not offer second home loan programs. Its assistance is reserved for first-time or primary homeowners, including veterans and income-qualified buyers. For second homes, buyers must work through private lenders. At BNB Lending, we provide customized second home loans throughout Kentucky, from lakefront properties in the west to Appalachian retreats in the east. We help you understand local zoning laws, lodging taxes, and second home eligibility criteria to ensure your financing is smooth and compliant.

What kinds of homes qualify for second home loans?

Eligible second homes must be one-unit residences used primarily for part-time personal occupancy. Properties must be in livable condition year-round and cannot be part of a timeshare. Acceptable types include detached homes, townhouses, and condos. The home must meet appraisal standards and any relevant zoning or HOA regulations. In some areas of Kentucky, short-term rental activity could complicate the loan classification, so it’s important to understand local restrictions. BNB Lending evaluates your property’s features, location, and intended use to determine loan eligibility.

Who should choose 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 Kentucky 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 Kentucky second home loans to provide flexibility while keeping your financing compliant with lender and zoning guidelines.

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