A deep-dive conversation between Second Street founder Zachary Kay and RE/MAX Oceanside broker/owner Shawn Fletcher explores how long-term fixed-rate financing is reshaping what foreign buyers can afford in Costa Rica’s real estate market.
Foreigners buying property in Costa Rica finally have access to something that Costa Rica has never reliably offered: a true 30-year fixed-rate mortgage.
To dig into what that means for buyers, Second Street founder Zachary Kay sat down with Shawn Fletcher, broker/owner of the RE/MAX Oceanside office in Jaco Beach, Costa Rica. He’s also the owner of the master franchise for RE/MAX Costa Rica and one of the most experienced agents in the region. Together, they explore how U.S.-style financing is changing what’s possible for foreigners purchasing homes in Costa Rica.
Second Street’s mortgages were created specifically for Americans abroad—offering a familiar process, predictable terms, and U.S.-grade service. If you’re looking to finance your future in Costa Rica, look no further and keep scrolling. Below, you can watch the full interview, read the top three takeaways, or explore the complete transcript.
Many buyers land in Costa Rica with $100,000-$150,000 in cash, which often isn’t enough to purchase a home outright in today’s market. With a U.S.-style mortgage, that money becomes a down payment, dramatically expanding their purchasing power.
This unlocks:
Financing lets buyers purchase the home they actually want—not just the one they can afford in cash.
Because converting investments into cash can be very expensive…
Paying cash for a home often requires selling investments or pulling from retirement accounts—moves that can trigger major tax consequences (typically 25–40% for many buyers).
Financing instead allows Americans to preserve long-term wealth and avoid unnecessary tax events.
Key U.S. tax advantages include:
For many buyers, financing isn’t just convenient—it’s a financially responsible strategy.
These examples are for general informational purposes only and should not be considered tax advice. We strongly recommend consulting a qualified tax advisor before making any financial or investment decisions.
Because Second Street uses a Costa Rican guarantee trust, buyers typically defer the upfront 2.5% transfer tax and stamps that cash buyers pay.
Total closing costs usually land close to a cash transaction—often within a single point—while still giving buyers all the benefits of long-term financing.
Fill out our quick and easy pre-qualification form to be connected with a loan officer who can answer all your questions, or contact us.
To begin your Costa Rican property search, reach out to Shawn Fletcher:
Please note: Since the time of this interview, several elements of Second Street’s loan programs have been updated. Our maximum Loan-to-Value (LTV) for new purchases has increased from 70% to 75% and our minimum loan size has been reduced from $200,000 to $150,000.
Any updates referenced in the transcript are marked with an asterisk (*).
For the most current details, please refer to our FAQ Section or contact our team directly.
(Noted information current as of December 2025.)
Shawn Fletcher:
Hi. My name is Shawn Fletcher, and I am the broker/owner of the RE/MAX Oceanside office here in Jaco Beach, Costa Rica. I'm also the owner of the master franchise for RE/MAX Costa Rica.
I've been doing real estate for over 20 years in this country, and one of our major pain buttons is when it comes to financing. And you can get financing as a foreigner from a local bank, but it is so painful. They tell you it's gonna take 30 days. It ends up taking 90 days. You're lucky to get someone who can speak to you in English. And then once you do get a loan, you're gonna have an adjustable-rate mortgage. There's no ceiling, so it can keep going up and up and up. And also there's gonna be a large prepayment penalty.
So I'm sitting here with Zach, and he is the CEO and founder of Second Street Mortgage. And he is here to hopefully alleviate our pain button.
So Zach, I'd like to ask you, what can Second Street mortgage do for us?
Zach Kay:
Yeah. Well, first of all, Shawn, thank you so much for the introduction and for having me here today. We're really excited to be a great partner for RE/MAX and for all of your clients in Costa Rica. So a little bit about myself and Second Street. Like Shawn said, I'm Zach, founder and CEO of the company. And Second Street is really the first institutionally-backed international mortgage lender for Americans in Costa Rica.
We've brought the traditional U.S.-style mortgage from the States down to Costa Rica. We offer, you know, really the 30-year fixed rate product that you know and love from the States. The process of getting a loan with us is exactly the same as what you would see back home. And all of the loan terms and structure are really what you'd be used to getting from a U.S. mortgage lender.
So we're really excited to have brought this product down to Costa Rica, really for the first time to really be able to open up the market here and make it more accessible to a lot of people.
Shawn:
That's great. So yeah, I mean, if we're not doing loans with a local bank, we're dealing with loans with sellers. And sellers obviously don't want to play bank for 30 years. And so we're doing short-term financing; three, five, seven years with them. So having the ability to find a 30-year fixed-rate mortgage for our American clients is game changing.
So I'd like for you to talk a little bit about closing costs and how that's gonna operate if we're... I mean, I understand that when you do a mortgage with Second Street, it goes into a trust. And tell us how that works as far as the transfer tax and reporting costs.
Zach:
Yeah, absolutely. So the closing costs for a loan with Second Street are really not all that different if you're buying a new home than if you were to purchase property in cash.
So when you buy property in cash in Costa Rica, you end up paying a few different closing costs. Typically, the biggest ones that you're paying are transfer taxes and stamps, which are about 2.5% of the value of your home. And then you also have a notary public fee, which in Costa Rica is usually around another, you know, call it point and a quarter. So you're paying around three and a quarter points on the total value of your purchase to buy a property in cash in Costa Rica.
When you buy a property with Second Street, even though Second Street charges an origination fee like any lender does in the U.S., your closing costs end up being significantly offset by savings that we hope you realize on the transfer tax side.
So when you do get a mortgage with Second Street, the way the structure works is very similar to getting a deed of trust in the United States, which is how most mortgages are done in states like Texas and California.
And so what that means is when you purchase a property, the title to the property will be transferred directly from the seller into a trust in Costa Rica that's managed by an independent trustee.
And on that transfer, you as the client do not owe any transfer taxes or stamps, which is saving you 2.5% on the entire value of your home upfront.
And so when you look at the total closing costs of buying cash versus getting a loan with Second Street, it ends up not being a very big difference. At a maximum LTV, at our maximum LTV of about 70%* [update: now 75%], the incremental closing costs to buy with a loan is maybe only an additional point or so.
So it ends up being a really affordable product, and it's great tax savings for clients.
Shawn:
Yeah. So if I'm understanding you correctly, if I get a loan from Second Street, I don't pay the transfer tax recording cost up front. I would only pay that once I pay off the note and the title is transferred into my name or a corporation that I have.
However, what if I sell the property before I pay off the note? 'Cause typically in Costa Rica, the buyers pay the closing costs, right? So can it go directly from the trust to the new buyer, in which case I would never end up paying the transfer tax recording cost?
Zach:
Absolutely—yes. So, like you said, if we're giving you a 30-year loan, right? Or your client a 30-year loan. Most people don't hold their home for 30 years. Most people hold a home for about 7 to 10 years, and they almost always sell their home before the mortgage is paid off in 30 years.
And so when you go to sell your home, if it's in a trust with Second Street, title for the property will be transferred directly from the trust to the new buyer of the property, and the new buyer is the one who would pay transfer taxes in that scenario.
Shawn:
That's huge.
Zach:
So you can end up going your entire ownership period in that property without ever having to pay those transfer taxes to the state.
Shawn:
Awesome. Now, for our American buyers, what other benefits would they have by securing a loan with a lender like yourself that are making payments in the United States?
Zach:
Yeah, absolutely. So I think there are really three main benefits to getting a mortgage with Second Street for American clients.
The first is an affordability question. There are a lot of people who, if they're gonna afford something in this market, they need to get access to financing.
If you come into the market with $100,000–$150,000, there really isn’t anything you can buy that you’d want to own at that price point. But if you're able to leverage that as a down payment and you have a stable source of income like you would need to get a mortgage in the States, now you can actually buy property here. And this whole really incredible market—and we think Costa Rica is an amazing investment opportunity—now becomes accessible when it wasn’t before.
I think the second benefit is more of a budget question. For a lot of people right now, you can only buy what you can afford in cash.
If you have $400,000 or so in cash, Costa Rica is not a discount market. That’ll get you something, but maybe not the luxury property you want.
But if you’re able to use that as a down payment and get a mortgage with Second Street, now you can buy a multimillion-dollar property using that as 30% down* [update: now 25%].
So your client can really expand their budget and get into the home they actually want, not just the one they have the cash on hand to buy.
And the third major benefit really comes down to taxes—and I'm talking about taxes in the United States.
There’s a reason why Mark Zuckerberg and Beyoncé both have mortgages on their homes—it’s the smart thing to do. So what are the actual tax advantages?
The first, and one of the most important ones, is savings on capital gains taxes in the U.S. If you’re buying property in Costa Rica, there’s a good chance you might need to sell some assets in the U.S. to provide that home.
Capital gains taxes in the U.S., depending on where you live, on a large capital gain, could be from 25% all the way up to close to 40% if you’re living in New York or California. And so, you might have a huge tax bill to have to pay if you want to free up cash to buy a place in Costa Rica. For a lot of people, it’s a nonstarter. They don’t want to have to pay that kind of premium and pay those kinds of taxes.
Similar situation for clients who might need to withdraw money from a retirement account if they’re going to buy a property in Costa Rica. I mean, you and your clients know that if you’re withdrawing from a 401(k) or a traditional IRA, you have to treat those withdrawals as ordinary income.
So if you pull out,if you need to buy a home for a million dollars, you actually have to pull out almost 2 million from your 401(k) to be able to buy the place, because you’re gonna be taxed on an income of 2 million dollars, so you're gonna have to pay a million in taxes and then have a million left over to buy the home, which is nuts.
We’ve actually recently, in the past month, saved a client from having to do that and saved this guy hundreds of thousands of dollars.
Shawn:
Nice.
Zach:
And the last thing, all of the rules that apply to the deductibility of mortgage interest from your income in the U.S. also apply to our Costa Rican loans.
So if your home purchase would be eligible for the mortgage interest tax deduction under U.S. rules, your loan with Second Street is as well. And for a lot of buyers, I mean that can amount to tens of thousands if not hundreds of thousands in taxes.
Shawn:
Okay, now I want to talk a little bit about who you are, who’s your team, what kind of experience do you have in this field, and who’s your backing? Where is your money coming from on these mortgages?
Zach:
Absolutely. My background is as an institutional investor. I spent my career working at a couple different hedge funds in New York—most recently was an investor over at Elliott Management, which manages about $70 billion in capital. I left that role in 2023 to start building Second Street.
Since I started building the company, we’ve put together, I think a really incredible team. Everybody’s based in the U.S., except our Head of Business Development who is based here in Costa Rica. Our team, especially the guys that work with clients—Steve Sluyter, our Head of Lending Operations, and Raj Ponniah who is our Senior Loan Officer—both of them have decades of experience. They actually both started working in the mortgage industry together over 20 years ago.
They’ve been at this a long time, they’re super experienced, we know how to make a loan, we know how to make the process easy. Getting a loan with us is just like getting a loan back at home—it’s fast, it’s simple.
It’s a [sarcastic] little different from getting a loan from a bank in Costa Rica.
And then, how are we actually able to offer a 30-year fixed-rate mortgage product in Costa Rica? In a market where I think there have been some other companies that have attempted to do this at various points in the past, those companies have had problems with their funding, that has sometimes resulted in negative outcomes for clients—like when your lender doesn’t show up to closing with cash. That’s obviously a big problem.
Shawn:
That’s no bueno for us.
Zach:
No bueno, no bueno indeed. Second Street is backed by a publicly listed financial institution in the U.S., they’re a public mortgage REIT and they operate with a $9 billion balance sheet.
Not only have they partnered with Second Street to provide capital for us to make loans, they’ve actually also made an investment in the business, so they’re actually an equity partner in our company—they’re in this for the long haul.
If we approve a loan, it means we have the cash to fund it, there are no questions about it.
Shawn:
Awesome. Okay, Zach, I’d like you to tell us, at what point should a buyer reach out to you to determine how much you’re able to finance and hence what kind of properties they’re able to look at here in Costa Rica?
Zach:
Yeah, absolutely. It’s a great question. So, our advice is that clients should really try to come talk to us as soon as possible in their home buying journey.
Because before you actually start shopping for a home, you wanna know what your budget is. Right?
So Second Street does fully underwritten verified pre-approvals. What that means is before you start shopping for a home, come to us, you’ll have an initial consultation with our loan officer, Raj, you’ll ask all the questions you have about getting a loan, if this is something you’re interested in pursuing, we’ll send you our loan application. It takes about 15 minutes to fill out, you send us your documentation, all the usual stuff a lender in the U.S. would be asking for. And within about 24 hours, if you’re eligible, we’ll get back to you with a pre-approval letter.
And in that letter it’s gonna say “Congratulations, you’ve been pre-approved” for a loan with Second Street, here’s how much you're able to borrow.
Now, as the buyer, you know exactly what your budget is.
Because you know how much cash you have to use for a down payment and you know how much you’re able to borrow. So now your client and their agent have a solid budget that they can use to shop.
So when they actually come down to Costa Rica and they wanna look at a bunch of properties, you're not wasting your time. You’re only looking at things that you know are in your budget range, you know you can afford, that are gonna make sense for you.
Shawn:
Yeah, absolutely. I mean, that’s fantastic, because we can start sending listings ahead of their arrival in Costa Rica within their budget and that preapproval letter will help us with the sellers to say hey look we’ve got someone preapproved and that makes them more excited to show the properties to us, so that’s definitely very helpful for our clients.
So, tell me, who is eligible for these loans with Second Street?
Zach:
It’s generally pretty simple, and I think most of your clients will be eligible for a loan with us. The way that we set up our guidelines, they’re very broadly reflective of the same guidelines that you would see for getting a mortgage in the U.S. We use a lot of the same things.
So, who is eligible? Right now, we’re only lending to American citizens and permanent residents. So that does mean that if you’re, let’s say Canadian, but you have a U.S. green card, you’re eligible to get a loan for a second home or an investment property with us. Obviously, if you’re a U.S. passport holder, you’re eligible.
We can lend to people with all sorts of different types of income—you can have a salaried job with a W2, you could be retired, you could be self-employed—all of those things are fine as long as we’re able to see your income on a tax return we’re able to use it to underwrite your loan.
The loans that we do for a new purchase go up to 70% loan-to-value* [update: now 75%], or a 30% down payment* [update: now 25%]. We can also do a cash-out refinance loan.
We lend against all sorts of different property types—it could be a single-family home, it could be a condo, it could be a townhome—all of that works. We also don’t discriminate by location in Costa Rica, so whether you have a client buying something up in the mountains or down by the beach, all of that’s okay with us.
We’re generally pretty broad in what we’re able to do. Unlike financial institutions in Costa Rica, we also don’t discriminate by age. The oldest person that we’ve ever pre-approved for was 82 years old, for a 30-year loan. We like to say we’re kind of optimistic at Second Street.
You know, in the States, age discrimination in lending is not legal, so that’s not something that we do either.
Shawn:
Okay. Now what type of properties can you lend on—I’m hearing that you can lend on homes and condos, what about something that’s under construction? Do you do any construction loans?
Zach:
At the moment, we don’t do construction loans or loans against lots. It needs to be a completed residential property.
But what I will say is for a pre-sale, we do have solutions where we can work with the developer. So generally, for pre-sale, your client’s gonna have to put some amount of money down prior to completion of the property and some amount after.
The way Second Street can help you borrow for a pre-sale is—of course any funds due to the developer before construction the client will have to pay—but Second Street can step in at the end and make the final payment to the developer, and then cash-out anything additional back to the client, up to a 70% LTV* [update: now 75%].
So, we make it pretty easy to work with pre-sales.
Shawn:
So I have some projects where the buyers pay 30% or more throughout the construction process, and you can come in at the end and finance the final balance.
Zach:
Exactly. So, you know, if we were to talk about an example where, let’s say your client has to put down a 50% deposit up front, and then they owe another 50% when the property’s complete but let’s say they want to get a 70% loan.
Your client will make the first 50% deposit, and then at closing, when the other 50% is due, Second Street will come in and pay that, and then we’ll cash out an additional 20% back to your client.
Shawn:
Got it.
Zach:
So your client ends up, at completion, with a 70% loan, 30% down.
Shawn:
Okay. Do you have a minimum loan amount that you’ll finance a client?
Zach:
Yes. So right now our minimum loan amount is $200,000* [update: now $150,000]. And so if you do the math at a 70% LTV* [update: now 75%], it means that the sort of smallest property value we'll lend it on right now is about $285,000. Because that's where $200,000 would be at a 70%.
Shawn:
So Second Street, we've partnered with them. Our network has been already closing deals with them and we think that they could be a complete game changer for our business here in Costa Rica, making financing easy and accessible with 30-year terms, with competitive interest rates, and no pre-payment penalties. So, we're really excited to work with Second Street.
If you'd like to have more information about their loan programs, contact us, and we'll have the details about their company down in the links below.
Click here to view the video interview between Zach Kay and Shawn Fletcher on YouTube.
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