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Ron Pippin

Two FHA Loans At The Same time?

Saturday, November 19, 2011 - Article by: Ron Pippin - The Pippin Team @ Citywide Home Loans - Message

I often get asked if it is possible to own a home with an FHA loan and then later buy another home with another FHA loan? Most often the answer is "no, only one FHA loan is allowed per person at any one time".

However, just like anything else, there are exceptions to most rules. Exceptions that may allow someone to have 2 concurrent FHA Loans are:

oIncrease in family size - There must be an increase in family size in which their current house can't support the new family member(s). You will have to prove the increase. Also, you must have 25 percent equity in your current home or pay it down to 75% LTV (loan-to-value). An FHA approved appraiser must be used to determine such new value.

oRelocation - If the borrower is relocating and it is established that they aren't in reasonable distance from their current property. Keeping in mind that reasonable can be defined differently from any lender. Note - If that borrower(s) returns back to the same area, they are not required to re-establish residency in that property in order to have another FHA insured mortgage.

oVacating a jointly owned property - A borrower my leave a property and be eligible for another FHA loan if the co-borrower is to stay in the same property that is being vacated. A good example of this is because of a divorce and that the vacating spouse needs to buy a new home.

oNon-Occupying co-borrower - If someone previously co-signed for a family member or relative while using a FHA loan. This type of FHA loan is called a non-occupant co-borrower loan. This borrower would still be eligible to purchase their own home using a FHA mortgage.

As long as you meet at least one of these requirements, you would be able to obtain a second FHA insured loan.

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