loan officer wants to do a loan to purchase 2nd home, he wants the term a one year single pay interest qrtly, i don't think we can do this am i correct? what are my options?

Unless your state's law prohibits it, I don't see why you couldn't use those loan terms.

thanks for the helping me, so is it because it is his second home the HPML rules don't apply i,e 3-5 year balloon?

That's how I read it:

Sec. 226.32 Requirements for certain closed-end home mortgages.

(a) Coverage. (1) (a) Coverage. (1) Except as provided in paragraph (a)(2) of this section, the requirements of this section apply to a consumer credit transaction that is secured by the consumer's principal dwelling, and in which either:
(i) The annual percentage rate at consummation will exceed by more than 8 percentage points for first-lien loans, or by more than 10 percentage points for subordinate-lien loans, the yield on Treasury securities having comparable periods of maturity to the loan maturity as of the fifteenth day of the month immediately preceding the month in which the application for the extension of credit is received by the creditor; or
(ii) The total points and fees payable by the consumer at or before loan closing will exceed the greater of 8 percent of the total loan amount, or $400; the $400 figure shall be adjusted annually on January 1 by the annual percentage change in the Consumer Price Index that was reported on the preceding June 1.

now i'm a little confused.

You need to refer to 226.35 for HPML requirements. 226.32 is for HOEPA.

However .32 and .35 only apply to the consumer's primary dwelling.

Oops - thanks Dan for covering me (again).