FHA loans - Posted by Rob FL

Posted by Jackie (NJ) on October 27, 1998 at 20:20:00:

"To prevent circumvention of the restrictions on FHA-insured mortgages to investors, we generally will not insure more than one mortgage for any borrower. An individual or couple owning a home covered by a mortgage insured by FHA that will be kept may not purchase another principal residence with FHA mortgage insurance except under the situations described below.

A. Relocation

B. Increase in Family size. If the number of dependents has increased to the point where the present house no longer meets the family’s needs, teh borrower may be permitted to obtain another home with a FHA-insured mortgage. The borrower must provide satisfactory evidence of the increase in dependents and how the property no longer meets the family’s needs, and must also pay down the outstanding mortgage balance on the present property to a 75 percent or less LTV ratio exclusive of any financed MIP. A current residential appraisal must be used to determine LTV compliance. Tax assessments, market analyses by real eastate brokers, etc., are not acceptable.

C. Vacating a Jointly-Owned Property. If the borrower is vacating a residence that will remain occupied by a co-mortgagor, the individual vacating the property is permitted to obtain another FHA-insured mortgage. Acceptable situations include those following a divorce where the vacating ex-spouse will be purchasing a new home, or where one of the co-mortgagors will vacate the existing property and is getting married.

D. Non-occupying co-borrower. A borrower that will be a non-occupying co-borrower on property being purchased with a FHA-insured mortgage as a principal residence by other family members may have a joint interest in the property as well as his or her principal residence that is covered by a FHA-insured mortgage.

In no event may the exceptins described above be used to assist investors in acquiring rental properties through purportedly purchasing “principal residences” and, thus, circumventing FHA’s ban on loans to private investors."

Taken from http://www.hudclips.org

Mortgage Credit Analysis for Mortgage Insurance on One- to Four- Family

FHA loans - Posted by Rob FL

Posted by Rob FL on October 25, 1998 at 17:03:43:

I have a FHA loan on the property I currently live in. Have had it for 6 years. I plan on moving into a larger home within the next year and renting out my current home. Can I get another FHA loan on my new home without refinancing the loan on my current home? Do lenders/HUD care if you have 2 FHA loans that you are personally liable for?

Re: FHA loans - Posted by Jackie (NJ)

Posted by Jackie (NJ) on October 26, 1998 at 12:21:04:

There are several exceptions allowing a person to have two FHA at the same time which allows them to rent out the first property.

  1. If you are relocating to another state (no equity requirements)
  2. If you are moving to a larger home and you have a certain percentage of equity (I think 30%) in the first home. I think that you also have to prove that the first residence is too small for your current family.

Check the FHA guidelines for more detailed information. If I can find the URL again, I will post it.

I have a FHA loan on a house in KY. Since I relocated to NJ, I am able to purchase another home with a FHA loan. I was just approved last week for a two-family that I will occupy with 3% downpayment.

Re: FHA loans - Posted by JPiper

Posted by JPiper on October 25, 1998 at 17:25:28:

The limit is one per customer.

You could have someone assume your loan…and then you would be eligible for another. If your loan was pre 1989 it could be assumed without relieving you of liability and you could still get another FHA loan (not you case though).

If you want to maintain this loan, I would seek out the somewhat new FHA lookalike available now. It’s a Fannie Mae loan that requires 3% down if I remember correctly. The loan is meant to compete with FHA. The primary disadvantage is that the back end ratio is not quite as liberal.