Can one person acquire more than one FHA loan?

6 Replies

From what I read, one person may only have one FHA loan. I'm wondering if it is possible to use an FHA loan to buy a home, live in it for the minimum year, then refinance with a conventional loan, then acquire another property with an FHA loan, live in it for the minimum year, then refinance with a conventional loan.... and repeat.... Thanks BP!

You have to wait two years between fha loans I believe, not to be confused with the one year occupancy requirement.

@Wayne Brooks , Can you point me to where that 2-year wait period is referenced by HUD?

@Cody Squires There is no specific timeframe required for the second loan. However it's not something that can easily be abused to scale a rental portfolio. The FHA loan is designed for actual owner occupants, not investments. There are generally 3 ways to get a second FHA loan which can be found in Chapter 4, Section B HUD 4155.1

1.  If one co-borrower will remain in the existing home, example: Divorce

2. If your family grows sufficiently in size that the current home is no longer suitable AND your current LTV based on a new appraisal is below 75%

3.  If you relocate and now reside in a new area that is outside of a reasonable commuting distance from the current home.

Additionally if you plan on getting a second FHA loan, the lender must evaluate your circumstances to determine the circumstances behind the need for a second FHA loan to determine if it is legitimate or not, items include...

  •  length of time the previous property was owned by the borrower, and 
  • circumstances that compel the borrower to purchase another residence with an FHA-insured mortgage
  • Then there is also a big disclaimer at the bottom which reads:

    Important: Under no circumstances may investors use the exceptions described in the table above to circumvent FHA’s ban on loans to private investors and acquire rental properties through purportedly purchasing “principal residences.”

    You can refinance out of FHA in 6 months, assuming the equity is there.

    But typically FHA isn't investor friendly past the first one for various other reasons.

    3% or 5% down conventional SFR? Yup, every 12 months, no need to refinance either.

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