FHA loans are for primary residences, so technically, you can only have one FHA loan at a time.
However, the FHA has some exceptions to the rule.
If you meet one of them, you may have more than one FHA loan at a time.
You must get prior approval to have multiple FHA loans and meet one of the FHA’s allowed reasons.
Just remember, buyers who purchase a house with an FHA mortgage are expected to occupy the home as their primary residence.
More than one FHA loan is possible
FHA has stringent requirements allowing borrowers to have multiple FHA loans simultaneously.
FHA will not insure more than one property as a principal residence for any home buyer, except as noted below.
Here are the different scenarios:
If your family size causes you to outgrow your existing home, you may be eligible to buy another home with FHA financing, but there’s a catch.
You must have at least 25% equity in the original home.
If you don’t have at least 25% equity in your home, you can pay it down (if you have the cash) or refinance into a conventional loan and then use FHA financing for the larger house.
If you’re getting a divorce and the divorce decree shows your ex-spouse getting the home, you may be eligible for an FHA loan in your name.
The divorce must be finalized and you’ll have to provide underwriting with a copy of your divorce decree to verify that the ex-spouse was awarded the home.
You Co-Signed for an FHA Loan for Someone
If you helped a child or relative buy a home with FHA financing but now want to buy your own home, you may qualify for FHA financing if you prove you can afford both payments or provide paperwork showing that someone else has made the mortgage payment for the last 12 months.
Qualifying for More than One FHA Loan
Qualifying for more than one FHA loan requires that you meet the FHA requirements, including:
- Minimum 620 credit score
- 43% debt-to-income ratio (sometimes can go higher depending on the credit score)
- Stable income and employment for two years
- Adequate proof of your income and assets (paystubs, W-2s, and bank statements)
- Meet the requirements to have more than one FHA loan
FHA loans are flexible, but if you need multiple FHA loans, expect more red tape to determine if you qualify.
If you have more than one home with FHA financing, one home must be your primary residence, and the other can be a rental.
It’s rare, but you can have more than one FHA loan in certain circumstances.
The key is to ensure that you meet the requirements and have adequate proof you’ll occupy one property as your primary residence.
FHA loans aren’t meant for investment homes; it’s a program to help families have a primary residence, but there are ways around it if you qualify.
Are you ready to apply? Start the process by completing the form below.