Two FHA Loans Due To Expanding Family Size At The Same Time Was PUBLISHED On April 11th, 2019
More than one FHA Loans Due To Expanding Family Size is allowed per HUD Guidelines. Normally, you can only have one FHA Loan. However, HUD, the parent of FHA, will make exemptions where you can have multiple FHA Loans at the same time.
Here are the exceptions of having multiple FHA Loans at the same time:
- If borrower is moving due to a job transfer that is 100 miles or more
- Two FHA Loans Due To Expanding Family Size is allowed under certain circumstances
In this blog, we will cover and discuss having multiple FHA Loans due to expanding family size.
About FHA Loans
FHA Loans is the most popular loan program in the United States.
- Borrowers with less than perfect credit, lower credit scores, and higher debt to income ratios can qualify for a 3.5% down payment FHA Loan with credit scores as low as 580 FICO
Borrowers with under 580 credit scores down to 500 FICO can qualify for FHA Loans with 10% down payment.
HUD Guidelines After Bankruptcy And Foreclosure
Homebuyers can qualify for FHA loans after bankruptcy and/or a housing event. There is a two year waiting period after Chapter 7 Bankruptcy discharge date to qualify:
- The waiting period of 3 years is required after foreclosure, deed in lieu of foreclosure, short sale
- Outstanding collections and charged off accounts do not have to be paid
- Debt to income ratios can be capped at 46.9%/56.9% to get an approve/eligible per automated underwriting system (AUS). Manual underwriting is allowed on FHA Loans
- Borrowers one year into a Chapter 13 Bankruptcy repayment can qualify with Trustee Approval via manual underwriting
- There is no waiting period after Chapter 13 Bankruptcy discharge date with a manual underwrite
Debt to income ratios can be capped at 40% front end and 50% back end with two compensating factors on manual underwrites.
Two FHA Loans Due To Expanding Family Size Lending Requirements
If a homeowner owns a home and has an FHA Loan but needs to purchase a larger home due to expanding the family size, this is allowed under HUD Guidelines. Let’s take a case scenario. Let’s say a homeowner owns a two-bedroom, one bathroom townhouse. The homeowner has no children. However, the townhome owner met someone with three children and two dogs. They cannot live in the townhome due to not enough space. The townhome owner can keep the townhouse with the FHA Loan and purchase a larger home due to a sudden increase in family size. This is allowed under HUD 4000.1 FHA handbook guidelines. The exiting property’s monthly principal, interest, taxes, insurance (PITI) plus HOA will be counted in the new mortgage debt to income ratio calculations. For more information on having multiple FHA Loans due to expanding the family size, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at firstname.lastname@example.org. We are available 7 days a week, evenings, weekends, and holidays. We are direct lenders with no overlays on government and conventional loans.