Collateral refers to the type of property, value, the use of the property and everything related to these aspects. Property type can be classified as the following in the order of risk from lowest to highest: single family residence, PUD, duplex, townhouse, low rise condominium, high rise condominium, triplex and four-plexes and condotels. Occupancy is also considered part of collateral. A home can be owner occupied, used as second home or investment. Owner occupied and second homes have the least amount of default, while investment properties have higher occurrences of default. Depending upon the combination of occupancy and type of collateral, the lender will adjust the amount of risk they are willing to take.