Dreaming about a red‑rock retreat in St. George or a ski‑side condo in Brian Head, but not sure how to finance it? You are not alone. Buying a second home in Southern Utah feels exciting, but the loan rules, STR policies, and insurance details can be confusing. In this guide, you will learn how lenders classify second homes, what financing options fit most buyers, and the steps that make approval smoother in our local market. Let’s dive in.
What counts as a second home
A second home is a property you plan to occupy for part of the year that is not your primary residence. Lenders expect personal use and generally do not allow heavy rental activity under this label.
If the property is mainly for rental income, your lender will likely classify it as an investment property. That shift raises the bar on rates, down payment, and cash reserves.
Short‑term rentals, such as Airbnb or VRBO, often trigger investment‑property treatment. Local zoning and HOA rules can also restrict STRs. Clarify how you plan to use the home before you apply.
Your financing options in Southern Utah
Conventional conforming loans
For many buyers, a conventional loan backed by Fannie Mae or Freddie Mac is the primary path. These loans often offer the best pricing for qualified borrowers and work well for St. George, Cedar City, Kanab, and many Washington County purchases within conforming limits.
Second‑home financing can be available with as little as 10 percent down for strong applicants, though 15 to 20 percent is common. Expect lenders to verify strong credit and cash reserves.
Jumbo loans
If your price point exceeds local conforming limits, you will likely need a jumbo loan. Jumbo programs tend to require higher credit scores, larger down payments, and more reserves. Rates can be higher and underwriting is more detailed.
Portfolio and alternative loans
If you are self‑employed, have non‑traditional income, or are buying a unique property, a portfolio loan or bank‑statement program may fit. These options often carry higher rates and fees, but can solve for scenarios that do not fit standard guidelines.
FHA, USDA, and VA
FHA and USDA loans are built for primary residences, not true second homes. VA loans are also intended for primary residence use, so they are uncommon for second‑home financing in Southern Utah unless very specific occupancy rules are met.
What lenders look for
Down payment ranges
For second homes, many lenders will accept 10 percent down with strong files, but 15 to 20 percent is common. Investment properties typically require 15 to 25 percent or more. Jumbo loans usually start at 20 percent down.
Credit score and DTI
Lenders favor higher scores on second homes. A 680+ score is common, and 700+ often earns better pricing. Debt‑to‑income ratios up to about 45 percent may be considered, though lenders can be more conservative for second‑home loans.
Cash reserves
Plan for reserves measured in months of principal, interest, taxes, and insurance. Six months of PITI is a common second‑home requirement. Investment properties can require six to twelve months or more.
Using rental income to qualify
Most lenders want a documented rental history before they will count rental income. Anticipated short‑term rental earnings are often not allowed for qualifying, and heavy STR use may push your loan into the investment category.
Documentation you will need
- Two years of W‑2s or tax returns (more for self‑employed buyers)
- Bank or retirement statements showing reserves
- HOA documents and condo questionnaires, if applicable
- An appraisal that considers seasonal comparables
STR rules and HOA realities
Short‑term rental policy is local in Southern Utah, and it changes. Some towns allow STRs in certain zones with registration and lodging taxes, while other areas restrict or prohibit them. Always verify city or county rules before you count on STR income.
HOA covenants and condo rules matter, too. Many communities in resort corridors restrict nightly rentals, limit the number of rental days, or require specific permits. Before you go under contract, review CC&Rs, HOA rental policies, and any licensing requirements.
If you do operate an STR, you may need to collect and remit local lodging and state sales taxes. Build these costs into your cash‑flow plan.
Insurance, taxes, and cost of ownership
Insurance and hazard exposure
Second‑home policies can cost more than primary‑home coverage, especially if a property sits vacant for long stretches or sits in higher‑risk zones. In parts of Southern Utah, wildfire and brush exposure affect insurability and premiums. Check FEMA flood maps for flood‑zone risk and get quotes early, including STR or landlord endorsements if you plan to rent.
Property taxes
Tax rates vary by county and municipality. Primary‑residence exemptions generally do not apply to second homes, so expect a higher effective rate. Confirm assessment practices and valuation timing to avoid surprises.
Utilities and maintenance
Rural or high‑elevation areas may use wells and septic systems, and winter access can add cost for road maintenance or snow removal. Budget for HOA dues, property management if you plan to rent, vacancy, repairs, and utility swings across seasons.
Market nuances in Southern Utah
Popular second‑home spots
Demand is driven by outdoor recreation and lifestyle. You will see steady interest in St. George and Washington County, gateways near Zion like Springdale, red‑rock towns such as Kanab, university‑adjacent Cedar City, and ski‑oriented Brian Head. Rural areas can offer lower price points with different infrastructure and permitting.
Seasonality and comps
Buyer activity and rental occupancy are seasonal. Appraisals and cash‑flow projections should account for shoulder seasons and peak periods. When reviewing comps, use a local lens to adjust for timing and location, especially in resort or tourist corridors.
Smart financing playbook
Use this checklist to move from idea to keys in hand:
- Decide on use
- Choose: personal second home, occasional STR, long‑term rental, or mixed use.
- Your choice drives loan type, underwriting, and insurance.
- Talk to lenders early
- Get preapproved and ask how they will classify your occupancy.
- Ask about down payment minimums, reserve requirements, and whether any rental income can be used to qualify.
- Verify STR and HOA rules
- Check city or county STR ordinances for the specific address.
- Review HOA/condo documents, CC&Rs, and any registration or tax obligations.
- Price out insurance now
- Request quotes for second‑home coverage, plus STR or landlord add‑ons if needed.
- Confirm wildfire and flood risk, and any coverage exclusions.
- Confirm the property is loanable
- Watch for non‑warrantable condos, fractional ownership, or unpermitted structures.
- Review road maintenance, winter accessibility, and utility type.
- Build a full cost picture
- Include mortgage, taxes, insurance, HOA dues, management fees, utilities, maintenance, and lodging taxes if renting.
- Add a vacancy and repair cushion.
- Coordinate your team
- Lender with second‑home and STR experience in Utah.
- Local agent who understands Southern Utah markets and seasonality.
- Insurance pro familiar with wildfire exposure and STR coverage.
- CPA or tax advisor who knows rental property and Utah tax rules.
Common scenarios and how to plan
Personal retreat, no rentals
If you plan to use the home for family getaways and personal time, a conventional second‑home loan is often your best fit. Aim for strong credit, a 10 to 20 percent down payment, and at least six months of reserves. Budget for second‑home insurance and higher property tax rates without primary‑residence exemptions.
Occasional STR to offset costs
Light, occasional rentals can be possible, but many lenders do not count projected STR income to qualify you. Make sure your lender is comfortable with your plan, your HOA allows it, and local STR rules support it. If rentals become frequent, the property may be treated as an investment for financing.
Full STR or long‑term rental
If rentals are the primary goal, expect investment‑property underwriting. Plan for a larger down payment, higher reserves, and higher rates. Get clarity on registration, lodging taxes, and specialized insurance before you write an offer.
Higher price point near ski areas
Jumbo loans are common for premium condos or homes near Brian Head or in top locations around Washington County. Start the preapproval process early and prepare for conservative underwriting on income, assets, and reserves.
How we help you win
Buying a second home is equal parts lifestyle and logistics. You deserve a process that feels clear, confident, and enjoyable. Our team brings a polished, boutique approach to selection, offer strategy, and due diligence, with a deep focus on presentation, neighborhood insight, and smooth communication at every step.
If you are considering a home in St. George, Washington County, the Zion corridor, Cedar City, Kanab, or Brian Head, we will help you narrow locations, anticipate seasonal factors, and coordinate with lenders, insurers, and tax pros so your plan aligns with your goals.
Ready to take the next step toward your Southern Utah retreat? Connect with Utah's Finest Realtors for thoughtful guidance and a streamlined path to the right second‑home purchase.
FAQs
Can I use FHA, USDA, or VA for a Southern Utah second home?
- FHA and USDA are for primary residences, and VA loans are intended for primary use, so they are uncommon for second‑home financing. Conventional or portfolio loans are typical.
How much down payment is needed for a second home in St. George?
- Many lenders accept 10 percent down for strong applicants, though 15 to 20 percent is common. Investment properties and jumbo loans usually require more.
Will lenders count Airbnb or VRBO income when I qualify?
- Often not without a documented rental history. Anticipated STR income is frequently disallowed, and heavy STR use may push the loan into investment‑property treatment.
Do STR rules vary across Washington County and nearby towns?
- Yes. STR policies are local and can change. Always verify city or county rules and HOA/condo restrictions for the exact property before relying on rental income.
What extra ownership costs should I expect for a Southern Utah cabin or condo?
- Budget for higher second‑home insurance, possible wildfire or flood risk premiums, HOA dues, utilities, maintenance, property taxes without exemptions, and lodging taxes if renting.
What reserves do lenders require for a second home in Southern Utah?
- Six months of PITI is a common requirement for second homes. Investment properties often require six to twelve months or more.
