Second FHA Loan After Buying with Conventional

4 Replies

Good morning Bigger Pockets.

I have a question regarding my eligibility to obtain a second FHA loan. I purchased a 4 unit property in 2014 using an FHA loan I lived there for about a year before I got a new job 1000+ miles away. Once at my new location, I was pre-approved to receive a second FHA loan since I met one of the exceptions since I had to move for work.

I went house shopping and got a house under contract and I decided that I would use a conventional mortgage instead of the FHA so that I could get a lower interest rate, and not be stuck with PMI for the life of the loan. I also knew that there was much less paperwork and scrutiny required by the bank for a conventional mortgage.

Here is my question. Even though I bought a house in my new location with a conventional mortgage, would I still be eligible to purchase another home using an FHA mortgage?

Thanks for any assistance.

Generally conventional is more REI friendly than FHA. FHA is designed with modest credit modest income middle class Americans in mind, not folks building up a real estate empire.

Now that you've purchased a primary residence in your new area using conventional, you'd have to re-qualify for the FHA exception you mentioned. Meaning that job relocation will no longer cut it, as you've since purchased a primary residence.

You would need another job relocation, etc.

@Chris Mason

Thanks for the reply.

I figured that would be the case. If I remember correctly another exception would be needing more space due to a growing family?

Hi @Anthony Gayden ,

If you just need to check the "owner occupant" box, yes the growing family will work.

If you need to use that departing residence rental income to qualify, nope, FHA will not go for that. Fannie Mae will.

@Chris Mason

I don't need the rental income from my current residence to qualify, though I would rent it out.

My main reason for using another FHA would be to only need 3.5% down.

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