Multiple FHA Loans At Same Time HUD Mortgage Guidelines

Gustan Cho Associates

Multiple FHA Loans At Same Time HUD Mortgage Guidelines

This BLOG On Multiple FHA Loans At Same Time HUD Mortgage Guidelines Was UPDATED On May 10th, 2019

Qualifying For Multiple FHA Loans

FHA Loans are for owner occupant primary homes. A homeowner can live in one property. However, many homeowners need to move to another home due to the following reasons:

  • Growing Family so they may need to move to a larger home
  • Downsizing: Children may move out of the home to either go to college or start their own families so they may need to move to a smaller home
  • Job Relocation: Homeowner may need to move to another home closer to their place of employment
  • If you are a non-occupant co-borrower, you can qualify for an FHA Loan as the main borrower
  • If two people are on a current FHA Loan but one of them needs to move out, they can qualify for an FHA Loan

The topic of this BLOG is can a home buyer qualify for multiple FHA Loans and if so, what are the requirements.

About FHA Loans

The Federal Housing Administration has created FHA mortgage loans to make home ownership affordable to all Americans. FHA Loans are the most popular loan program in the United States.

Here are the benefits of FHA Loans and why it is so popular:

  • Minimum 580 Credit Score Requirements For 3.5% down payment on a home purchase
  • Debt To Income Ratio up to 46.9% DTI Front End: 56.9% DTI Back End to get approve/eligible per Automated Underwriting System
  • Outstanding Collections and Charge Off Accounts do not have to paid to qualify for FHA Loans
  • 2 Year Waiting Period After Chapter 7 Bankruptcy discharged date 
  • Consumers one year into a Chapter 13 Bankruptcy Repayment Period can qualify for FHA Loans with Trustee Approval via Manual Underwriting
  • No Waiting Period After Chapter 7 Bankruptcy discharged date to qualify for FHA Loans
  • 3 Year Waiting Period After Foreclosure, Short Sale, and Deed In Lieu Of Foreclosure to qualify for FHA Loans
  • The FHA insured mortgage loan program is a wonderful vehicle for a first time home buyer
  • FHA Loans are a great loan program for those home buyers who have had some prior credit problems have a chance in becoming homeowners again. 
  • FHA insured mortgage guidelines are much more lenient that conventional loan programs

FHA Insured Mortgage Loan Programs On Multiple FHA Loans

For those borrowers who have had a prior bankruptcy and/or foreclosure,  they may qualify for FHA insured mortgage loans as long as they have passed their mandatory waiting periods.

Home Buyers can benefit from FHA Loans if they have the following:

  • Less than perfect credit
  • Higher debt to income ratios
  • Outstanding collections
  • Outstanding charge offs
  • Judgments
  • Tax liens

However, FHA Loans are for owner occupant properties only.

How Can One Qualify For Two FHA Loans At Same Time

Borrowers can have multiple FHA Loans at the same time under certain circumstances

  • A Borrower can qualify for multiple FHA Loans at Same Time
  • This holds true if they are relocating and establishing primary residency in an area and/or location that is beyond reasonable commuting distance
  • The relocation needs to be at least 100 miles or more from the work of employment
  • Out of state employment is a good reason
  • The borrower was and/or will be a non-occupant co-borrower with a joint interest in a real estate property that is purchased by other members of his or her family as their primary residence

Two Owner Occupant Properties

Borrowers can have a second owner occupant property financing and not sell an exiting property under the following conditions:

  • If a home buyer is exiting an existing owner occupant property and buying a new home, they can qualify for another owner occupant property under the following conditions
    • They are upsizing to a larger home (30% or larger) due to a growing family
    • They are down sizing to a smaller home due to becoming empty nesters
    • There are no distance requirements as long as the exiting property has 25% equity
  • However, they cannot move to a similar and like home nearby if the second primary home is similar in size as the exiting home
  • If they are moving to a nearby home that is similar in value and/or square footage then they cannot qualify as an owner occupant home
  • Similar homes on a second homeowner-occupant purchase will be considered investment homes
  • Again, the only way to qualify for two FHA Loans At The Same Time is to have a job relocation which is 100 miles or more.
  • If a person needs to purchase a second home that is owner occupant and keep the exiting home as a rental, then they can have two FHA Loans at the same time if the exiting home has 25% or more equity
  • If the exiting home is FHA, the new owner occupant home purchase needs to be a conventional loan
  • If the first home is conventional financing, then they can purchase the second home with an FHA Loan
  • If the second home purchase needs to be FHA Loan and the first home is FHA, then the exiting home needs to be refinanced into a conventional or another loan program
  • If a home buyer is a non-occupant co-borrower on another FHA Loan, they can qualify to purchase an FHA Loan as the main borrower on a new home
  • If two people are on an FHA Loan as co-borrowers and one person want to leave that property and buy another home for themselves, they can qualify for an FHA Loan

For more information on this topic and/or other mortgage-related topics, please contact us at Gustan Cho Associates at 262-716-8151 ort ext us for faster response.

Gustan Cho NMLS ID # 873293

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