It’s a scenario that comes up more often than you’d think: parents want to buy a condo or home near their child’s college — somewhere the student can live instead of paying dorm or apartment rent, and that the family might hold onto as an investment afterward.

It’s a smart idea in the right market. But the financing can be trickier than it looks, because how the property is classified — owner-occupied, second home, or investment property — has a significant impact on your rate, down payment, and loan options.

Here’s how it works under current guidelines. [Read more…]