FHA for 2nd multi-unit property - are these issues real?
So about a year ago I purchased a duplex using a first time home buyer mortgage - it was NOT a FHA loan. From what I'd casually read, I figured this meant it would be fairly straightforward to use a FHA loan to purchase a second, multi-unit property a year later which would be my new primary residence; most people just cite that having 2 FHA loans at a time is the issue. However, in talking to my mortgage broker (who is well respected in the area for multi-unit properties), he is bringing up multiple issues I was unaware of. I was wondering A) if these issues are real or if I should seek another lender's opinion and B) if other's have had similar issue and if they have found a way around them. Issues he brought up include:
1. The 100 mile radius rule (no 2nd FHA loan unless moving 100+ miles away or getting a larger family - I will be doing neither) - I thought this only applied if my first loan was an FHA. He says it applies anyway because the first property was a duplex. In addition he say's this rule prevents me from applying rental income from the first property towards my DTI for the FHA.
2. He also sent me a document stating that for an FHA on a second property, I must have 25% equity in the first property. I will not be close to this, and hadn't heard this rule before.
3. He said even if I am able to meet all the guidelines, it will still be up to the underwriters discretion to approve me, and if the underwriter decides the purchase of a new property is just to acquire another investment property they'll likely deny me anyway.
Has anyone else heard of or had these issues? Is there a way around them?
Thanks!
I used a conventional loan for my first property and FHA for the second. All those points are valid. The first issue I was able to sidestep was by writing a letter talking about moving closer to my job, a step up home, and moving closer to family. The second was just able to benefit from appreciation here in Utah. Third, likely can be sidestepped using that letter and if your lender vouches for you just wanting to move.
Hope that helps