My question deals with FHA financing
My question deals with FHA financing. I'm purchasing a lot where I desire to construct 4-unit multifamily properties. The properties will qualify for conforming loan financing. In order to maximized ROI and grow my business quickly I want to take advantage of FHA financing as much as possible. I understand that I can only have one FHA loan at a time (the exceptions of relocating > 50 miles and growing household size don't apply to me). I would like to build one property at a time and refinance the FHA loan with another investment property loan (investment property refi is offered through my credit union at 75% LTV) once I achieve 25% equity stake, then repeat that process up to 10 properties. I will own the land outright, no loans in a prime location. I've talked with several professionals who tell me the homes would appraise today for $400,000/unit once completed, and it will cost me $350,000 to construct. If I pay $50,000 as a down payment and the real estate market hold up, I would essentially be at a 25% equity stake right away and be able to refinance. I would then repeat the process as many times as I could.
My question is, do you think I would run into difficulty getting approved every 9 mos-1yr for new FHA loans on properties on the same street? While there isn't a specific rule that I'm aware of preventing this, I also know that the spirit of FHA financing is to help finance individuals seeking primary residencies, not investment properties. Do you think that after 2 or 3 attempts at this, an underwriter would begin denying me, or not? Keep in mind, I wouldn't apply for a new FHA loan without having first refinanced the old one, so I would only have one FHA loan at a time. Any advise is appreciated.