Rental Property Investor · Tipp City, OH · Member since 2017 · 4 posts · 2 votes
I purchased my first property as a house hack a little over a year ago using an FHA loan, and now that I've met the residency requirement I would like to move toward purchasing my second house hack property.
I need advice on what my best plan of action should be. Right now I'm thinking I can probably refinance my current FHA loan to a traditional mortgage and take out a separate FHA loan on my new house. Is this my best option? I'm not sure what the steps or qualifications are for refinancing an FHA loan and if I have to be at a certain equity level in the home before I can do so.
Any tips would be much appreciated!
Indianapolis, IN · Member since 2017 · 63 posts · 41 votes
9y
To my knowledge, you will need to refinance your current FHA loan to a conventional loan as you can only have one FHA loan at a time. The conventional loan will only loan up to 80% of the value of your home, so if you put 3.5% down on your first current FHA loan, you most likely have not built up to 20% equity in the first year (unless you got a great deal on the house and gain equity when you purchased). If you are currently below 20% equity, you will need to pay out of pocket to get to 20% or stay in the home under the FHA loan until you get to 20% to be able to refinance.