FHA loan, 1 year minimum?

Question

If I purchase a 4 plex, do I need to live in it a year or two years to qualify for a FHA loan?

Jerry Padilla · Answer

@Chase Romine

As mentioned, FHA is a federal program and you should have the intention of living in the property for one year. If you refinance, when it is your primary, there is another one year commitment with the refinance, plus you will have to have a 20% equity position for a conventional refinance.

An underwriter for an FHA mortgage is going to question if they see a recent refinance out of an FHA loan and then a new one you are applying for in a couple months. FHA isn't meant as a means to keep aquiring low down payment properties to be turned into investment properties. There will be the least difficulty going from a multi-family to a SFR, but going from MFR to MFR with FHA may get denied.

Charles Baldi · Answer

@Chase Romine You either need to live in it for at least 1 year or refinance to another loan. You can begin the refinancing process after 6 months.

Corey Griffo · Answer

Thanks @Jerry Padilla! You said it way better than I could.

From my experience, It is all based on initial intent. FHA, wants to see that you intend to live there for at least a year. The loan office will not be checking that your mailing address is the same after a year to verify, but if you went in to do another FHA loan 6 months later it may raise some red flags.

Charles Baldi · Answer

@Selina Banda I would take care of the first deal first and when you’re ready for the next one you’ll find a way - FHA or not. When you find a good loan officer for the first I’d just ask them about future FHA loans if that is the strategy you’d like to do. My loan officer has been a great resource for asking questions to even when they do not pertain to the specific deal I’m working on.

Charles Baldi · Answer

@Chase Romine Yes since FHA is a federal loan program it applies to all states. If you live there for over a year before moving out you do not need to refinance (but sometimes people will anyway if they can get rid of mortgage insurance by doing so). But if you want to move out sooner you can refinance out of he FHA loan as soon as 6 months.

Kris L. · Answer

FHA is a federal program, so it should apply to all states.

Wayne Brooks · Answer

1.

Selina Banda · Answer

@Charles Baldi

Noted, I like your response, I will do so

Charles Baldi · Answer

@Selina Banda I am not positive about the answer. I believe you can only have one FHA type loan at a time so you can only apply for a second one once you have refinanced out of the first. Personally I’m using FHA to get started and will likely use hard money or private money and/or cash (since I’ll be able to save more while house hacking)  for my next deals. Since I have a wife, daughter, and a son on the way I don’t want to move everyone every year more than I need to.

Selina Banda · Answer

@Charles Baldi

So when can you apply for another FHA, after 6 months refinancing the FHA loan?

FHA loan, 1 year minimum?

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