Hello all, my wife and I purchased our first home back in May 2020. We weren't thinking of real estate investing at the time but when we closed on the home we did it through FHA. Recently we have heard about house hacking and to my understanding if we refinance as conventional we can begin our journey into house hacking.
A few questions came to my mind. I believe that FHA requires you to use the property as a primary residence for 1 year; would this still apply to me if I am doing a refinance?
If I have the option to refinance and get out of FHA and begin looking for a home should I proceed now or simply wait until May 2021?
If this was our second house hack is the process "waiting until we hit a year, refinance our FHA to a conventional and start the house hunting"? Or do I NOT need to refinance and simply after a year I just get my FHA eligibility back?
If I do need to refinance as Conventional, is there a specific type of conventional loan I need to do or do I simply choose the one with the best rate (don't want to break any rules)?
Dude, you're 2 months away from a year, talk with a lender, get the process going, by the time you get everything set in place, that year will come and you'll have more options.
If you are wanting to refinance to get off FHA then need to wait until the equity in your home has built to 25% equity or more to switch from a Primary FHA to a non-owner occupied Conventional. If you're not planning on moving and in need of freeing up the FHA eligibility then there is no real need for the refinance if you are just going to begin collecting boarder income.
Or if you are wanting to get on to the next deal leave the current on FHA and begin searching for a new home to purchase and put 3%-5% down for Conventional as a owner occupied as your FHA 1 year owner occupied requirement has been met by then
Once your current home has 25%-30% equity you can refinance it to conventional thereby freeing up your FHA again. I would toggle back and forth between FHA and Conventional so you don't have to wait for each property to get the equity before getting new deals. However, in all cases if you take out an owner occupied loan you must occupy it for one year.
Best of Luck!