A type-A cottage is a winterized cottage that’s built on a permanent foundation below frost line, with year-round road access, a kitchen, an indoor bathroom, a permanent heat source and potable running water.
A type-B cottage is one that doesn’t meet the above criteria. For example, it may have seasonal or boat-only access, no permanent heat source, a foundation of pilings or concrete block.
Type-A cottages can be mortgage with as little as 5% down while type-B cottages require at least 10% down and usually entail higher interest rates. Note that not all lenders offer cottage financing.