Does FHA loan count aginst the 4 loans limit that banks enforce?

4 Replies

Does FHA loan get counted in the four loan limit that many banks has? Or does the four loan only count conventional loan and not FHA?

Thanks!

Type of loan doesn't matter.  The criteria is "financed properties".

As @Jon Holdman said, and the conventional loan limit is 10, not 4.

FHA loan is for owner-occupied only, and the borrower need to prove that this will be his/her primary residence by:

1. Borrower do not have and other property. Then this new one must be his primary residence.

Or

2. If the borrower has other properties already, then the new one using FHA loan must have the biggest sq ft. and is the biggest house compare to other houses.
Otherwise, the lender would not trust you that you are moving to a smaller house and won’t approve the FHA loan.

Or

3. You are job relocation, moving to another far away city, and this is the first house in this far away city

@Jason Wang if you were speaking with a bank who stated their loan limit is 4 please seek another lender RIGHT AWAY.  In the lending world we call that an "overlay".  The larger the bank, the more overlays they have that make it harder to borrower money.  I know this sounds crazy but very large banks, specifically ones that are publicly traded want to limit their risk.  And there are very consistent and firm numbers that show the more properties you own the higher your foreclosure rate is.  Most investors seek smaller to mid-sized banks that have no overlays...or at least very few.  As was mentioned above the actual limit is 10...and you can go higher in certain scenarios.  Hope this helps!

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