Having More Than One FHA Loan

Typically FHA only allows a borrower to have 1 FHA loan. However that is just a “rule” and if you a rebel like me you know that rules are meant to be broken! Okay, maybe just bent a little. FHA does allow a borrower to have more than 1 FHA loan in certain cases.

When Can You Have More Than 1 FHA Loan?

1. Re-locations – Borrowers relocating to another area that is not within a reasonable commuting distance from their current principal residence (the home with the FHA loan on it).  This relocation does NOT need to be employer mandated

2.Increase in family size – If the number of legal dependents increase to where the buyers present home (the home with the FHA    loan on it) does not meet the family’s needs they make obtain another FHA loan if the present home’s FHA loan is equal to or less than 75% of that properties current appraised value (an appraisal must be done to determine value).

3. Vacating a jointly owned property – If a borrower is leaving a property that is owned as a joint property with another borrower and together they have an FHA loan, the vacating borrower may obtain a new FHA loan if the other borrower stays in the property that they owned together.  For example – if a couple is getting a divorce and the husband moves out of the property that has an FHA loan on it and the wife stays in that home, the husband may obtain a new FHA loan even if they had a loan on the property that they owned together.

4. Non-Occupying Co-Borrower – A borrower may act as a co-borrower on someone else’s FHA loan even if they themselves already have an FHA loan.  The key here is the word “non-occupying” meaning that they must be acting only as a “c0-signer” to help someone else qualify and they may NOT actually occupy the new home with the FHA loan if they already have an FHA loan.

So there you have it!   A few simple ways to have more than 1 FHA loan.

More information is always available on HUD/FHA’s official webiste

By Jeremy House


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