Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 16%
$32.50 /mo
$390 billed annualy
MONTHLY
$39 /mo
billed monthly
7 day free trial. Cancel anytime
General Real Estate Investing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 3 years ago on . Most recent reply

Account Closed
  • Dallas
8
Votes |
14
Posts

Does 5% Conventional loan disqualify me from FHA 3.5%

Account Closed
  • Dallas
Posted

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!

Most Popular Reply

User Stats

21
Posts
10
Votes
Chris Choe
  • Lender
  • Maryland
10
Votes |
21
Posts
Chris Choe
  • Lender
  • Maryland
Replied
Quote from @Account Closed:
Quote from @Jaron Walling:

@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.


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?

 @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.

Loading replies...