FHA Loan and Conventional Loan Question?

Question

Can I use a Conventional Loan first to buy a investment property out of state and then use a FHA Loan later to buy a property for my wife and I to live in as our primary residence?

Reason being… out state properties that I'm looking at are much cheaper and I can afford 20-25% down, but where I'm looking to buy for my primary residence is very expensive and i can't afford 20% down.

Mike Perrotti · Answer

@Elizabeth  Colegrove Thats Great! Thank you.

Elizabeth Colegrove · Answer

I just got a response from my broker that it's a "special" program for first time buyers. So it might be a good one for you ;)

Mike Perrotti · Answer

@Elizabeth  Colegrove

Thanks! I will take a look at this

Elizabeth Colegrove · Answer

yes you can!

That being said you might want to look at the new 3% conventional loan. The Pmi falls off at 78% loan repayment and there is no funding fee! Just a thought ;)

Jerry Padilla · Answer

@Lynn M. If income is shoeing on the tax return that will count. If it is too soon to shoe on the tax returns than 75 percent of the lease agreement amount will count as income.

Mike Perrotti · Answer

Good to know…. Thanks guys

Jerry Padilla · Answer

@Mike Perrotti  - Yes you absolutely can.

Lynn McGeein · Answer

You cannot use FHA loan for an investment property, anyway, so it sounds like a good plan.  I would be careful of qualifying ratios, though, as I believe they still don't count rental income for the first 2 years unless you have landlord experience, so the conventional mortgage will count against you when qualifying for the FHA if you do it within the 2 year window.   They may have changed that rule, but I'd look into it before buying anything if you are planning to buy your primary in the next few years.