One FHA Loan For Each Spouse?

Question

Sometime this year, my wife and I plan to get a primary residence using an FHA loan. After we live there a year or two we plan buy a new home and rent that house out.

From what we've read, FHA loans are great for people like us who have limited credit histories and the low money down requirements are awesome. We got to thinking how great it would be to get our 2nd house with an FHA as well. I don't know for sure, but I would guess that a person cannot carry 2 FHA loans at the same time. Please correct me if I'm wrong  on this.

So my question is would it be possible to get the first FHA loan in my name, then when we buy our 2nd house, get an FHA for that house in my wife's name?

Patrick Britton · Answer

all you need for conventional loan are scores.  having an FHA before an conventional is not necessary.

and good for you not using credit...trouble is that lenders need to see that you dont abuse the power when given it...it's ridiculous i know...

Joe Impagliazzo · Answer

@Brandon G.

there are a few exceptions where you can have more than one FHA loan, but usually people don't qualify.  The main ones are if you can prove you needed to upsize or down size, divorce where the court orders one of the spouses the property that has an FHA loan, and you were relocated by your job.  So if you do want to have one FHA loan in each of your names that could be done.

The bigger question is do you want an FHA loan.  If your looking at a SFR property, have good credit, and 5% down payment instead of 3.5% you may be able to get a better deal with a conventional loan.  If your credit is not as good, you don't have much for a down payment, need a seller concession closer to 6% rather than conventional max 3%, or are looking to purchase a multi family home FHA would be your better option.

Woodly Tisme · Answer

how has your progress been in real estate over the last decade?

Brandon G. · Answer

@Patrick Britton That's good to know. I guess I just assumed that to qualify for a home loan with a decent interest rate required some pretty awesome credit. That was my only reason for even considering FHA

Brandon G. · Answer

As for income we should be ok. Between my wife and myself we have over 200k a year and plenty of savings. And we will be looking at houses in the $150K ARV range.

Brandon G. · Answer

@Patrick Britton & @Wayne Brooks & @Joe Impagliazzo

I have no installment loans. I've always paid cash for all major purchases and never used credit in my life. I thought I was doing the right thing but now it's coming back to haunt me.

At the advice of an FHA lender, I did go out and get some secured cards which haven't reported yet, so I am on my way to getting some credit. He said within 6 months or so I should be able to get an FHA loan, so that's why I'm relying so heavily on that idea.

I just wonder if after having an FHA loan for a year (so 1-1/2 years of credit history) if I would qualify for a conventional. Anyone know?

Patrick Britton · Answer

@Brandon G. well, I'll tell you that you'll be hard pressed to find a lender who will allow non-traditional credit on FHA.  but if you do thank your lucky stars.

Joe Impagliazzo · Answer

@Brandon G. @Patrick Britton @Wayne Brooks

There are FHA programs that will go down to a 580, but will only finance up to 90% LTV.  If you try the non-traditional credit I explained above, they price the loan as a 540, so there are many rate adders

Joe Impagliazzo · Answer

@Brandon G.

Having 0 credit scores will be an issue with just about any loan program.  Normally you need to have at least 2 out of the 3 credit scores.  However FHA will allow you to add what's called non-traditional credit, and normally if you have 3 or 4 different creditors added you can qualify.  Non-traditional credit that I have used before is gas bill, electrical bill, gym membership, phone bill, magazine/newspaper, really anything with a monthly payment that can show paid on time.  However remember since you still will not have a score your interest rate will not be nearly as good.  Also, if you have been in the military VA loans offer the same thing.

What would be better is to start building your credit now.  Try to get a gas credit card as they are usually a little bit easier.  If you have been denied before get a secured credit card.  There are many out there that you can google, but remember there all going to have undesirable fee's and high rate's so you may not have much of a choice.  I know First Progress had a card about 6 months ago with a minimum secured down payment of $300, and seemed to approve anyone.  You'd be surprised that some secured cards will still deny your application.

Also another trick you can try is to be added as an authorized user on a credit card with family member or someone that will trust you.  They don't need to give you a card, and this will actually help create a score for you.  Once you have a good enough score you can apply for a regular credit card of loan.  After being approved they can take you off as an authorized user.  However remember to get another account opened before being removed, as this will create a 0 score again if there are no accounts.

Wayne Brooks · Answer

You've still got be above 600-620ish for FHA, along with income ratios.

One FHA Loan For Each Spouse?

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