House hacking question
Hello. my question is, I currently own a single-family residence that I live in, I want to buy a duplex, live in one side, and then rent out the other side and my single-family home. Would I qualify for an FHA loan by doing this?
Yes, this is something that you could do. Since you already own the SFR you can simply change the insurance policy to cover yourself with tenants in the home and then on the new property utilize an FHA to house hack. This is a good way to begin acquiring more properties since after each year you could rinse and repeat. You just need to make sure the numbers make sense, and it will cash flow because you do not want to over leverage yourself.
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Real Estate Agent Delaware (#0039354)
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Quote from @Darius Wade:
Yes, this is something that you could do. Since you already own the SFR you can simply change the insurance policy to cover yourself with tenants in the home and then on the new property utilize an FHA to house hack. This is a good way to begin acquiring more properties since after each year you could rinse and repeat. You just need to make sure the numbers make sense, and it will cash flow because you do not want to over leverage yourself.
This, plus, I believe FHA loans require you to live in them for a certain amount of time to get the low down payment. Be sure you can spend that time there to meet your loan requirements.
I do believe you can only have one FHA loan at a time, so if you bought your current home with an FHA loan you may be required to refinance that property with different loan terms to qualify for the FHA loan on the duplex property.
Depends on a few things….
Do you currently have an FHA mortgage on your current SFR? You can only have one FHA mortgage at a time. You may also run into a problem with underwriters. FHA tries very hard to not be used as an investment product. If they see you going from a SFR to a Duplex, they may not write because they see you using it as an investment rather than improving your lifestyle. It's one thing to go from a duplex to SFR (that shows you're moving up in the world). Sometimes you're allowed to have two existing FHA mortgages (look up FHA 100 miles rule), but it's rare.
Best to ask a local lender that works with house hackers. Hope that helps!
Thank you very much for the advice , much appreciated.