Can I use an FHA Loan for a Rental Property?

Question

Me and my wife currently own a home under my VA Loan in PA. I would like to know if I or we could use an FHA Loan to purchase a rental multi family home in NJ that’s closer to my job while still keeping the current home?

Carlos Valencia · Answer

Hello Brian yes you can only use FHA as a primary so unless you plan on living there thats no problem. You will have to lease out your other property if you want to keep it to help offset the PITIA (Principal, Interest, Taxes, Insurance) against your DTI but if you can qualify for both PITI then you dont need to worry about showing lease agreements or selling your current property. It just depends what your end goal is. Hope this helps.

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Brian McGuire · Answer

Thank you everyone for this information, it’s very helpful.

Kristen L Garner · Answer

Hi Brian, As long as you occupy one of the units in the subject property you can use FHA. FHA works for 1-4 unit properties and has better rates than conventional right now. You will need to show proof that you are either selling or renting your current primary.

Jonathan Soto · Answer

You would have to occupy the property for at least the first year. since you own a property you need motive that for the move and looks like closer to your job would be. it sounds doable, but lets connect to discuss

Kevin Manafi · Answer

Hi @Brian McGuire,

FHA loans can indeed be used for rental properties, as long as you are occupying the property as your primary residence (you must intend to occupy the property for about a year). Also, generally speaking, you can only have one FHA loan in your name at a time.

If you're interested in learning more, I can connect you with some knowledgeable lenders.

John Boonphitak · Answer

The key to using FHA for investing is that since it is considered it having to be a primary residence, you have to occupy the property for atleast 1 year, then get the next property. The other hack is correct to what everyone is mentioning about multi family

Dave Skow · Answer

@Brian McGuire- unfortunately FHA cant ne used for a rental property ( or " second home ")

Mike D'Arrigo · Answer

@Brian McGuire If you're keeping your current property, they lender miight want to see some evdience that it would make sense that the subject property will be your primarly residence. The fact that it's closer to work will help. They might want to see a lease agreement showing that you intend to rent your current home out. Talk to a lender and ask them what they will look for.

Eliott Elias · Answer

You can not use a FHA loan to buy a property that you do not occupy. You can purchase a four-plex and live in one unit, making it a rental property.

Ash Hegde · Answer

An FHA loan has to be your primary for a year, so this scenario would not work.

Can I use an FHA Loan for a Rental Property?

Can I use an FHA Loan for a Rental Property?

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