2nd fha loan

[Dustin Boggs]

Hello all, so im just starting off and doing research while i save my money. Im leaning towards a multifamily with an fha to take advantage of the 3.5% down. If i occupy the home for a year then buy another multifamily will i need to refi the first loan in order to recieve a second fha? and do you think this is a good route for just beginning?

[Brie Schmidt]

@Dustin Boggs

FHA can be a good idea because of the low down payment, but the loan will cost you. FHA charges two fees, your upfront UMIP and your monthly PMI.

UMIP is 1.75% of the loan amount.  So for a $400k house it is $6,755.  Most people roll this into the loan so you pay interest on it for 30 years.  At 3.75% that will cost you $11,262 over the life of the loan. 

PMI on a $400k house is $273.42 a month so over 30 years it will be $98,431.20 and now the only way to drop PMI is to refi it. So you will either need to pay it down to a 80% LTV or get enough equity in the property to get it to a 80% LTV

You can only have 1 FHA loan at a time unless you have had a qualifying life event (increased dependants, job transfer out of area, ect) but then there are still restrictions and limitations