FHA Loans for BRRRR strategy

[Rich Hupper]

Hi BP 

I recently heard a story about someone buying a 2 family with a 3.5% down FHA. After about 8 months they refinanced. They then took the money they cashed out from the refinance and used it as the 3.5% down with another FHA loan. I thought FHA could only be used for primary residences?

Does anyone what they may have done?

[Jason D.]

@Rich Hupper FHA mortgage fraud carries a maximum 30 year prison sentence and $1 million fine. It is investigated by the lenders themselves and reported to the federal government