FHA mortgages, how many can you have?

After having a brief conversation with Thesa Chambers earlier today in regards to First Time Homebuyers and FHA, she told me that I should write about this. She thought FHA was only for first time homebuyers. This is far from the truth and this has nothing to do with Thesa and her knowledge of real estate. She is great at what she does and how she helps her clients buying or selling in the Sunriver, Bend, La Pine, Oregon areas.

FHA mortgages can be used over and over and over. The two major questions that are sometimes overlooked by loan officers when first screening the consumer is :

1. Do you own or have you sold other real estate in the past 60 months on which there was a HUD/FHA mortgage?
2. If so, is it to be sold?  ( and if it is to be sold, the requirements below don't count then)

This is extremely important because FHA has guidelines when it comes to owning another property that has a FHA/HUD mortgage on it. So, what does FHA look at and how can one be disqualified? Your FHA mortgage has to follow everything below. You can't mix and match some of these requirements.

• One of the properties has to have 25% equity in the property. No matter if it's your current property that you own or the one that you are buying.

• The next home that you buy with a FHA loan has to be at least 50 miles apart from your current FHA mortgage. This use to be an older rule. Now?  It has to make sense. Typically some distance.

• And that you typically have to be moving up in home value, not down. Usually a growing family is a good reason.
  

 

  These are the basic guidelines and rules when buying a home with a FHA mortgage. You might be asking yourself why this is important and why HUD is adamant when it comes to these guidelines. Because FHA is very lenient when it comes down to down payment, credit, and qualifying ratios. And they want to keep investors from obtaining homes under these relaxed guidelines.

Comments

[Carlos Sagastume]

As an real estate investor; I wanted to make a small comment. If have an FHA mortgage that was originated prior to December 1989 you can have a mortgage that was no release of liability requirements and has no limit on how many FHA Home loans you can have.

[Jeff Belonger]

Carlos..... thanks for stopping by. I am not 100% sure on what you are trying to say here. But that was back in 1989, when investors could actually finance property under FHA guidelines. This is not possible anymore. Meaning that you can't finance property as a FHA loan unless it is your primary property.

Now, you can go out and buy another FHA property as your primary, but you have to follow the guidelines mentioned above.

Again, thanks for your feedback. jeff belonger