FHA Multiple Loans

FHA will not insure a mortgage if it is determined that the transaction is being used as a vehicle for obtaining investment properties, even if the property to be insured will be the only one owned using FHA mortgage insurance.

Properties previously acquired as an investment property are not subject to these restrictions.

The URLA (1003) must indicate that the property will be the borrower’s principal residence and certify to the fact on form HUD 92900-A.

Borrower may have more than one FHA loan only under the following circumstances:

Policy Exceptions

Eligibility Requirements

Relocation

Eligible to obtain another FHA-insured mortgage without being required to sell an existing property covered by an FHA-insured mortgage if the borrower is:

  • Relocating or have relocated for an employment-related reason; and

  • Establishing or have established a new principal residence in an area more than 100 miles from the borrower’s current principal residence

Note:  If borrower moves back to the original area, he/she is not required to live in the original house and may obtain a new FHA-insured mortgage on a new principal residence provided the relocation meets the two requirements above.

Increase in family size

Eligible for another house with an FHA-insured mortgage if the borrower provides satisfactory evidence of:

  • An increase in legal dependents and the property’s inability to meet the family current needs; and

  • The LTV ratio on the current principal residence is 75% or less OR is paid down to that amount based on the outstanding mortgage balance and a current residential appraisal

Vacating a jointly-owned property

Eligible for another FHA-insured mortgage if the borrower is vacating (with no intent to return) and the existing principal residence which will remain occupied by a co-borrower.

Non-occupying co-borrower

Eligible if borrower was a non-occupying co-borrower on an existing FHA-insured mortgage may qualify for an FHA-insured mortgage on a new property to be their own principal residence.

 

 

Topic Date:  04/06/16