Principal residence properties. A principal residence is a property that the borrower occupies as his or her primary residence. If there are multiple borrowers for a regularly amortizing mortgage, only one borrower needs to occupy and take title to the property.

Parents who want to provide housing for their physically handicapped or developmentally disabled adult children who are unable to work or who have income that is not sufficient for them to qualify for a mortgage on their own have special home financing needs. In recognition of this, we will consider a residence that parents purchase or refinance for such children to be a principal residence for purposes of satisfying our mortgage eligibility requirements even though the parent-borrower will not be the occupant of the property. We will extend this same flexibility to children who want to provide housing for elderly parents who are unable to work or who have insufficient income to qualify for a mortgage of their own.

Second home properties. A second home is a property that is located within a reasonable distance from the borrower's principal residence and which the borrower occupies for some portion of the year. We limit our purchase of mortgages that are secured by second homes to those properties that have one dwelling unit. The property must be suitable for year-round occupancy (and can, in fact, be occupied by someone other than the borrower-as long as the occupancy is not under a timeshare arrangement). The borrower must have exclusive control over the property; therefore, he or she must not enter into any rental agreements that require the property to be rented or give a management firm control over the occupancy of the property. When a property is classified as a second home, rental income may not be used to qualify the borrower. Conventional second mortgages may not be secured by a second home.

Investment properties. An investment property is a property that the borrower owns, but does not occupy. A mortgage loan that is made on an investment property that is secured by manufactured home is not eligible for purchase or securitization.