My little brother and I are looking into investing in a multifamily unit. I currently have an FHA loan in my name for my primary residence. However, he does not. My question, can you get an FHA loan on a property that is not your primary residence?
No you cannot. The whole purpose of FHA is for primary residence properties. You can however use an FHA loan to purchase up to a 4 unit property if you live in one of the units.
@Aaron K. my scenario is similar, I have a VA loan on my current primary residence. We are looking to relocate however and would like to purchase a duplex, leasing out one side and living in the other. Does FHA approve a loan if our intention is to live in it as part of relocation even if we have yet to sell our primary residence?
@Aaron K. Thank you for the information. I figured that was the case but just wanted to make sure.
@Eddie Sorrell you might not have to sell but you may have to refinance it into a non owner occupied investment loan if you want to keep it.
@Eddie Sorrell since you're selling your primary residence which is a VA loan, you'll be able to use the VA loan again on the new house hack, or you could also keep the current house that's under the VA loan. Example:
Primary residence VA loan is 200k, right now the VA loan limit is 453k. therefore you could buy a duplex at or below 253k.
No reason to get the FHA, and someone can correct me on any of this, but I don't think you're eligible for the FHA since it's not your first home loan. It could be your significant others or roommate's though.
@Taylor Colligan - If you currently have an FHA loan in your name, you cannot take another out. Your options are:
1. Refinance out of the current FHA
2. Have your brother take the loan out in his name and have him use his FHA loan.
@Taylor - no ...might your brother be able to make the transaction work on his own as a FHA owner occupied property ? if not - can you approach the property as a rental property purchase and make it work on conv loan ?
@Eddie - if you plan to have the present property with a VA loan sold / closed before needing to close on new place - you can use the VA loan again or you can use a conventional or FHA loan too …….you should be able to get pre approved now with this hypothetical scenario
Thanks everyone for the feedback this is very helpful. I think the right thing to do is to go the VA loan route.
When it comes to the VA loan. Can you use that on an investment property or does that have to be primary residents as well?
@Taylor Colligan Yes it can be on an investment property. And yes it has to be your primary residence.
So how do people use 2 VA loans? They move, they satisfy the requirement the lender requires them to live in the residence for. Not all VA loans are alike. People think they are regardless of which lending institution offers it but each lender will have their own stipulations.
Example from my life: my lender said I could buy it and live in it for 3 months then move. Moving is a part of life and that's what makes the VA loan great for veterans, we move. So I buy property with VA, move in, live in for specified time, move, (most likely to a new city, not close my understanding, you can't just move within the city) then use the remainder of the VA loan for the 2nd property.
So real world, we're buying a property here, then moving across the country in aprox 1 year, we'll use the VA loan again to buy another home. If you're staying in the city and want to use the VA loan again you need to refi the VA loan or sell the property. You can refi to another loan if you put sweat equity into it. Example, I buy a perfectly live-able home at a discount because you walk in and holy crap it's the 80's! I renovate using my cash on the home and a year later, its worth more due to the upgrades and me bringing it to market value, now I refi into another loan product.
Hope that helped, but VA loans go from one point to the next easily. and they can be confusing. Talk to a lender in your area to see what they can do