Buying a lake home or second home in New Hampshire

Primary home, second home or investment?

How you'll use the home decides the loan. If you'll live there most of the year, it's your primary residence. Under Fannie Mae's rules, a second home:

• Is a one-unit home you live in for part of the year
• Must be suitable for year-round use
• Must be under your exclusive control, not a rental property, a timeshare or under an agreement that gives a management firm control over who stays there

Fannie Mae allows rental income on a second home only if that income isn't used to qualify. If the home will mainly be rented out, investment property loans apply instead. FHA and VA loans are for a home you'll live in as your primary residence.

What are the shoreland rules on lakes and ponds?

New Hampshire's Shoreland Water Quality Protection Act (RSA 483-B) covers land within 250 feet of most public waters, which include lakes and ponds over 10 acres. The first 50 feet from the water is the waterfront buffer. Building, adding on or clearing near the water can need a permit from NHDES, so if you plan changes, ask what's allowed and what has been permitted before you buy.

What about docks and work in the water?

Under RSA 482-A, building structures in or next to the water, including permanent docks, generally needs an NHDES permit. Some seasonal docks that meet size limits and come out of the water for part of the year are exempt from a permit if the owner files a notification with NHDES. Ask the seller whether the dock is permitted or registered.

How do flood zones and flood insurance work?

If the home is in a high-risk flood area, called a Special Flood Hazard Area, and your loan comes from a federally regulated or insured lender, as most mortgages do, the lender will require flood insurance. Lenders can require it outside those areas too. Look up the address on FEMA's flood maps before you make an offer, and get an insurance quote early, since it becomes part of your monthly cost.

What about septic, wells and winter access?

Many lake homes have private wells and septic systems. When any part of a septic system is within 250 feet of the shoreline, New Hampshire requires a licensed evaluation before the sale (RSA 485-A:39). The well and septic guide covers it. Also ask how the road is maintained in winter, since a second home must be suitable for year-round use. Service Connect lists local home pros, from inspectors to contractors, as they join.

How do I run the numbers?

The payment calculator includes the town's tax rate and your insurance; enter the rate for the town you're considering. Tom can compare second-home and primary-home loans for a specific property, and jumbo options if the price is above the conforming limit.