2nd FHA Loan | House Hacking

[Emmanuel Barrientos]

I was wondering if there are any limitations to getting a 2nd FHA loan as far as what value the 2nd house is compared to the first one. In other words whether it is considered an upgrade or downgrade. I am in the process of learning and plan to use house hacking as my investing strategy for the first few properties. I know that I would have to refinance out of the first FHA loan in order to qualify for another FHA because you can't have two at a time. Let's say that my first house hack using FHA loan was bought for 220k and then once it is refinanced into conventional, I try for another FHA but this time it is a 175K property. Would this raise any flags? Thank you for any feedback!

[Matthew Kwan]

You can always start off on house hacking a multifamily in MI 1-4 units with min 5% down or 3.5% down for FHA. This will allow you to acquire more rental units and also being able to use the vacated unit rents at 75% to help your debt to income ratio DTI.
There is a FHA 100 mile rule if you do plan on using FHA on your 2nd house hack. The fha 100 mile rule will be triggered whenever you try to vacate your current primary and also trying to use the rental income to qualify.

However, this 100 mile rule can be exempted for the following rules

1. Relocation
2. Increase in family size
3. Vacating a joint owned property
4. Non-occupying co-borrower

If you are not trying to use FHA on your 2nd house hack, you can use conventional and the rules that I mentioned above will not be a concern and will be exempted.

@Carlos Valencia @Albert Bui