Buying a warm-weather base in Scottsdale should feel exciting, not confusing. If you are planning a second home, the loan choices, rental rules, and taxes can feel like a maze. You want clear steps, smarter options, and local insight so you can enjoy winter sunshine with confidence. This guide breaks down your financing choices, how short-term renting changes the math, and what to do next. Let’s dive in.
Start with how you will use the home
Your plan shapes your loan options and costs. Lenders ask how you will use the property and verify it.
- Second home: You plan to live there part of the year and do not rely on rent to qualify. The property must meet second-home rules and be available for your use. See the GSE occupancy rules in the Fannie Mae guide on occupancy types.
- Investment property: You intend to operate it as a rental or rely on rental income to qualify. Expect higher down payment, rate, and reserves.
- Government loans: FHA and VA loans generally require primary residence occupancy, so they are not designed for a true vacation home.
Tip: Be clear and consistent on occupancy. Misstating occupancy can create serious issues with lenders.
Your financing options in Scottsdale
Each option comes with different down payments, reserves, documentation, and rates. Choose based on your goals, budget, and timeline.
Conventional second-home mortgage
- Best fit: You will use the home seasonally and will not rely on rental income to qualify.
- Typical terms: Many lenders allow down payments as low as 10 percent for strong borrowers, though 15 to 25 percent is common based on credit, condo status, and loan size. Automated underwriting often requires at least a few months of reserves. See Fannie Mae’s minimum reserve requirements for context.
- What to expect: Rates are usually a bit higher than a primary residence, and your rate can vary by loan size and credit profile.
Jumbo loans
- Best fit: Your loan amount is above the conforming limit. The FHFA baseline conforming limit for 2025 is $806,500, so many Scottsdale purchases may require jumbo financing. Review the 2025 limits in the FHFA announcement.
- Typical terms: Higher credit standards, larger down payments, and larger reserve requirements are common. Underwriting is lender specific.
Portfolio or non-QM loans
- Best fit: You are self-employed, have complex income, are a foreign national, or need asset-based qualifying.
- Typical terms: Down payments often start around 20 to 30 percent, with higher rates and more documentation. Learn the basics of bank-statement programs from this overview of bank-statement loans.
- Documents: Expect bank statements, proof of funds, and additional verification for foreign accounts.
HELOC or cash-out on your primary home
- Best fit: You have strong equity and want flexibility or to close quickly with cash, then refinance later if desired.
- Considerations: Interest deductibility depends on how you use the funds and other IRS rules. Discuss details with a tax advisor.
Bridge, renovation, or construction loans
- Best fit: You need short-term funds to buy before you sell, or you plan a significant remodel. Some renovation products allow improvements to a second home. Compare costs and timelines before you commit.
How short-term renting changes the math
If you plan to rent your Scottsdale home for less than 30 days at a time, you must follow city rules and understand how lenders view that plan.
- City license and safety: Scottsdale requires a short-term rental license, neighbor notification, safety postings, and proof of at least $500,000 in liability coverage. Review the city’s vacation and short-term rental requirements.
- Taxes you collect: You must register for Arizona’s Transaction Privilege Tax and remit state, county, and city transient lodging taxes. Confirm details on Scottsdale taxes.
- Lender treatment: If you rely on rental income to qualify or sign a management agreement that limits your occupancy, lenders may classify the home as an investment property, not a second home. Fannie Mae has strict rules on using rental income to qualify. See the section on rental income.
- Federal 14-day rule: If you rent for fewer than 15 days in a year, certain rental income can be excluded from your federal gross income. If you rent 15 days or more, you must report rental income and allocate expenses. Read IRC §280A(g) on the 14-day rule.
HOA reminder: Many Scottsdale HOAs limit or prohibit short-term rentals. Always review HOA documents before you write an offer.
Conforming vs jumbo in Scottsdale
Home prices in Scottsdale are often above the national average. The 2025 baseline conforming loan limit is $806,500, which means many area purchases may fall into jumbo territory. You can review the national limit change in the FHFA’s 2025 announcement. Your exact loan type depends on the final price, down payment, and Maricopa County limits at the time you apply.
What lenders look for
Understanding lender priorities helps you prepare and improve your terms.
- Occupancy: You must intend to use a second home for part of the year and keep it available for your use. Check GSE occupancy guidance.
- Reserves: Plan for several months of PITI reserves, especially if you own other financed properties or need a jumbo loan. Review minimum reserve requirements.
- Documentation: Expect full income and asset verification for conventional and jumbo loans, or bank statements and asset reviews for non-QM.
- Rates: Track the market as you shop. See current trends in Freddie Mac’s weekly mortgage rates.
Smart prep checklist
Use this list to move from idea to keys in hand.
- Clarify use: Second home for personal use, or an investment property with regular renting.
- Run the numbers: Estimate monthly payment, HOA dues, utilities, and reserves for repairs and insurance.
- Choose your path: Conventional second-home loan, jumbo, non-QM, or HELOC/cash-out on your primary.
- Plan your down payment: Target 15 to 25 percent for most scenarios, higher for jumbo or non-QM.
- Gather documents: W-2s, tax returns, bank statements, and proof of funds. Non-QM may require 12 to 24 months of bank statements.
- Verify HOA and city rules: Confirm STR restrictions, license steps, and liability coverage.
- Talk taxes early: Review the 14-day rule, depreciation rules if you rent 15 or more days, and Arizona TPT filings with a CPA.
- Shop insurance: Confirm coverage for a second home and ask about short-term rental endorsements.
Local guidance that puts you first
You deserve a plan that fits your lifestyle, not a one-size-fits-all loan. With over two decades of helping clients buy homes in Scottsdale, I help you weigh loan types, estimate total carrying costs, and understand HOA and city rules before you commit. Let’s align your budget, your ideal neighborhood, and the right financing so you can enjoy winter in the Sonoran sun.
Ready to explore Scottsdale second-home options? Reach out to Angela Covey for a friendly, focused game plan.
FAQs
Can you use FHA or VA for a Scottsdale vacation home?
- Generally no. FHA and VA require primary residence occupancy, so they are not intended for a true vacation home. See this overview on VA loans and second homes and confirm details with a local lender.
How much down payment do you need for a second home in Scottsdale?
- Many conventional second-home loans allow as low as 10 percent down for very strong borrowers, but 15 to 25 percent is common, and jumbo or non-QM often require more. Lenders also ask for reserves.
Can short-term rental income help you qualify for a second-home loan?
- Usually not. Fannie Mae and Freddie Mac have strict rules on using rental income from a second home. Regular short-term renting may cause the loan to be treated as an investment property. See Fannie Mae’s section on rental income.
Do you need a license to rent your Scottsdale home for less than 30 days?
- Yes. Scottsdale requires a short-term rental license, neighbor notification, safety postings, and proof of $500,000 in liability coverage. Review the city’s STR requirements.
What taxes apply if you short-term rent in Scottsdale?
- STR hosts must register for Arizona Transaction Privilege Tax and collect and remit state, county, and city transient lodging taxes. If you rent 15 or more days a year, you must report rental income under federal rules. See Scottsdale taxes and the federal 14-day rule.
