Second Mortgage in Sacramento

Yes. California regulates business-purpose real estate lending; the question is under which law. The California Financing Law covers commercial loans of $5,000 or more whose proceeds are for something other than personal, family or household use, and the state regulator says that includes loans secured by residential real estate. The two lawful routes are a CFL license or a real estate broker license. The state's residential mortgage lending act defines its scope by a federal term that reaches first or subordinate liens on 1 to 4 unit residential property; federal rules separately exempt credit made primarily for a business purpose, and no state guidance we found says whether that exemption carries into the state definition. California's homestead exemption protects the principal dwelling you live in from judgment creditors, and the Homeowner Bill of Rights is limited to owner-occupied, consumer-purpose first liens, so neither is built for a business-purpose second on a rental. This is not legal advice; talk to your attorney about your own structure. See the second mortgage program page for terms.

A senior trustee sale can wipe out the second, so its protections come before the sale and from the surplus. California deeds of trust are foreclosed by trustee sale under the power of sale. The sale is held in the county where the property sits, between 9 a.m. and 5 p.m. on a business day, at the time and place stated in the recorded notice of sale; we found no official source naming a standing Sacramento County sale site, so read the notice for the property. The holder of a later-recorded deed of trust must be mailed notice within one month after the senior's notice of default records, and notice of sale at least 20 days before the sale (Civil Code section 2924b). A junior can reinstate the senior loan up to five business days before the sale date in the first recorded notice of sale (section 2924c), and surplus proceeds pay junior liens in order of priority before the owner sees any (section 2924k). For a 1 to 4 unit property, eligible bidders such as tenant buyers and prospective owner-occupants get a post-sale window under section 2924m, so the result is not final at the gavel. What a sold-out junior can recover on its note is fact-specific under California's anti-deficiency rules; ask counsel. Read lien position explained for how position works.

It may; whether it reaches business-purpose seconds is unsettled. Civil Code section 2924.13, added by AB 130 and signed on June 30, 2025, defines a "subordinate mortgage" as a security instrument in residential real property, including a deed of trust, that was junior to another security interest when recorded. It makes foreclosure unlawful where the servicer gave the borrower no written communication for at least three years or failed to provide a periodic account statement the law required, and a nonjudicial foreclosure cannot proceed until the servicer records a certification under penalty of perjury and mails it to the borrower. No unit-count, occupancy or loan-purpose limit appears in the text. California Mortgage Association v. Bonta, filed in federal court in September 2025, alleges the section reaches both consumer and business loans; that is an allegation, not a ruling, and no outcome was found. If you plan to refinance your first later, the second-lien holder generally has to sign a resubordination agreement. This is not legal advice; your attorney or title company has the final say.

It depends on the county line, not the mailing address. Deals in the City of Sacramento, Elk Grove, Citrus Heights, Rancho Cordova, Folsom and Carmichael record with the Sacramento County Clerk/Recorder. Roseville is in Placer County and West Sacramento is in Yolo County, so those deals use a different recorder, fee schedule and tax roll. Sacramento County says documents received before 3:00 p.m., in person or electronically, are recorded the same day if they meet all recording requirements. California charges no documentary transfer tax or mortgage tax on a deed of trust (Revenue and Taxation Code section 11921). The state's $75 SB 2 Building Homes and Jobs Act fee, capped at $225, may apply to each recorded real estate instrument unless an exemption fits, and the exemptions cover a transfer subject to documentary transfer tax and a transfer to an owner-occupier; a cash-out second recorded without a sale fits neither on its face. Get the recording total from the county or your title company.

Yes, with a city permit and a cap. The City of Sacramento requires a short-term rental permit. Its current application form says that if the home is not your primary residence, lodging can only be provided for 90 days in total per calendar year, and more than 90 days needs a conditional use permit. The same form lists a $260 new permit fee, a $250 renewal and a $50 late renewal assessment. City rules can change over the life of a loan, so recheck them before you count on short-term income. Our program lends on short-term rentals; the city decides how many nights a property can operate. Separately, California lets a homeowners association ban rentals of 30 days or less (Civil Code section 4741).

Check before you size the loan on future rent increases. Sacramento City Code chapter 5.156 requires annual registration of covered rental units. Detached single dwelling units and units built after February 1, 1995 are exempt from the city rule, and the ordinance is currently scheduled to sunset on December 31, 2029 unless extended. Use the second mortgage calculator to see what the equity supports.