Does 5% Conventional loan disqualify me from FHA 3.5%

Question

In February I purchased a property using 5% conventional lending, once my one year of owner occupancy is over will I be able to qualify for an FHA loan since I've never used one previously?

Any information helps, Thanks!

Chris Choe · Answer

Account Closed, you're right. If you're occupying the property as your primary, it'll be fine. Note that the lending institution will conduct a spot check on the loan after it's well funded (i.e. months after) to confirm various data points from...were you employed at time of signing, primary occupancy through bills/statements and surprise showings to the property.

To your last comment, if you qualify for the loan, there's no issue. FHA cons are the upfront MIP which is 1.75% of the value and the monthly PMI. Beyond that, rates are always competitive, property must pass FHA appraisal inspection.

Jaron Walling · Answer

Account Closed Depends on the lender but you'll be hard pressed to find one that qualifies you for an FHA. If your credit history, income, and finances are lined up I wouldn't take an FHA loan if you paid me. A conventional loan has more flexibly and gives the buyer (you) more ways to attack a deal.

If you're aiming to buy property #2 and rent out the first be ready to put down 25%. Lenders see it as an investment property which rules out low down payment loans. Using an FHA loan for an investment property is out of the question.

Account Closed · Answer

Yes sir lets stay in contact, reach out to me at 214-603-2931. I'm interested in moving forward.

Account Closed · Answer

I understand that FHA puts me at a competitive disadvantage when purchasing but Id like to fully understand my options. Why would lenders see the property as an investment if I plan to occupy the home? I know I can not use FHA for a rental because of the year owner occupancy rule, but if that qualification is met is their any issue?