Rental Property Investor · Pittsburgh, PA · Member since 2014 · 26 posts · 19 votes
Hello All,
In a lunch discussion with fellow investors, we generated some unresolved questions. I will keep this brief and I hope this discussion will help future readers. The more we look into the topic, the more misinformation we are finding.
Question:
Can a person purchase a non-occupied residential property using a conventional/investment mortgage (Non owner occupied, 1-4 units, 25% down) and still retain their eligibility to use an FHA backed mortgage (owner occupied, 1-4 units, ~3.5% down) on another property?
Cliff:
Person owns SFH rental, non occ. Can they obtain an FHA mortgage (Typical or 203K) for a primary residence to occupy? Also, are their any caveats to this "yes" or "no" answer?
Mortgage Broker · Dallas, TX · Member since 2017 · 657 posts · 275 votes
9y
Hello Troy,
Short: Yes as primary residence OOC property are separate from the rules of investments. You will just have some more hoops to jump through in regards to reserves and legitimacy of living in said property.
Long: Through basic FHA background there is no stipulation of you not being able to obtain a FHA loan due to already having another loan type on a NOO property. They specifically state that the FHA loan must and only be used for a primary residence that you will occupy for majority of the calendar year. As they do not offer loans for investment purposes, that does not show that they do not however ban those from the program who are investors.
I will say however they are very conservative and will leave no stone un-turned to make sure that you plan to actually live in the property within 60 days (generally) of the loan closing. They will go through your investment properties and gather any and all types of info on them to confirm.