Proof of moving into FHA, for loan approval

[Caleb Smith]

Scenario:

I'm trying to use the FHA loan strategy to acquire a home each year.

Personal credit is great, and my primary residence has plenty of equity, and income is sufficient for purchase of additional home.

Problem:

While attempting to get pre-approvals for loans, the FHA lenders are questioning that I will "down size" and move into homes of lesser value than my existing primary residence.

Mortgage Brokers suggestion:

"Get your primary residence rented out, then go rent a place for 6 months. Then maybe they will approve an FHA."

Question:

1)Has anyone else faced this issue when trying to apply this strategy on an annual basis?

2) Is there a better solution to prevent having to rent from a third party prior to purchasing a second property under an FHA?

3) Any other suggestions for applying the FHA strategy?

[Chris Mason]

There is no rule that says "you can't buy a new home that is smaller than your old home, no matter what."

It just needs to make sense. 

Dropping from a 1.5 hour commute to a 30 minute commute could make sense, even if the home is a little smaller. Bigger yard could make sense if your dog is going bonkers confined to your current smaller yard. Just had one close wherein he departed a 4/2 for a 2/1 after breaking up with his fiance whom he had previously intended to make babies with.

It's a matter of a) it being true and accurate (since the underwriter could ask you to document your claims in some way) and b) quality packaging and presentation on the loan originator's part.