Using an FHA Loan on Primary Residence

6 Replies

I've read multiple times about people using FHA for investment properties. I'm curious if anyone has ever used it on their primary residence or if anyone has opinions on doing so. I'll be moving from Manhattan to Northern Jersey so looking at homes in the 500K range. My thought is instead of tying up all that capital in the down payment, I can use that money on 2-3 investment props. I know the monthly payments would be higher, but if I invest the money I saved I'm thinking it would work out.

This isn't something I looked into yet, I'm still several months away from starting the process but figured I'd ask the question. 

I think that is a good strategy, in my area, however, many sellers are very anti FHA and VA loan buyers because the loans take longer and the process is stricter. Might not be an issue in your area, however.

Conventional loans on primary SF residences can be had for as little as 5% down these days so that might be another route to explore to avoid having your offers rejected simply for being FHA.

Originally posted by @Paul Schackman :

I've read multiple times about people using FHA for investment properties. I'm curious if anyone has ever used it on their primary residence or if anyone has opinions on doing so. I'll be moving from Manhattan to Northern Jersey so looking at homes in the 500K range. My thought is instead of tying up all that capital in the down payment, I can use that money on 2-3 investment props. I know the monthly payments would be higher, but if I invest the money I saved I'm thinking it would work out.

This isn't something I looked into yet, I'm still several months away from starting the process but figured I'd ask the question. 

Hey Paul! As far as I know you cannot use an FHA loan for an investment property. Typically they would tell you it would be a conventional loan with 20% down. Unless of course you were going to house hack ie buy a duplex, live in one side and rent the other out. You could then get the FHA loan. Hope this helps!

Coco 

@Coco Zuniga I get the house hack multi-family situation, that's the situation I commonly hear. Or someone using it and moving out in a year post renovations.  I'm talking about using it and living in the house for years, with no intention of every using the house for investment purposes.

@Paul Schackman You are only allowed to use the FHA loan on a primary residence (The rule is you must "intend" on living there for at least one year). You cannot use an FHA loan on a property purchased as an investment which you aren't living in

Originally posted by @Paul Schackman :

@Coco Zuniga I get the house hack multi-family situation, that's the situation I commonly hear. Or someone using it and moving out in a year post renovations.  I'm talking about using it and living in the house for years, with no intention of every using the house for investment purposes.

Got it...i think I misunderstood the question! I got an FHA loan on my primary residence in Las Vegas years ago (lived there for 7 years, never rented it). The bonus is the low down payment/little money to get in, but the flip side of that is the PMI they require. Always pros and cons.