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Gabriel Z.
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FHA Loan, Employment Status Changing

Gabriel Z.
  • New to Real Estate
Posted Mar 18 2024, 19:50

Hello everyone,

I currently have an FHA loan on my property and I was able to finance this because I work remote. However, I recently got an offer letter that will require me to be on site. I have a couple questions:

1. Am I able to get out of the FHA loan and refinance into a conventional, investment loan, and what would that process look like?

2. I make the house not my primary residence, will I still be able to get a cash-out refinance, or get a HELOC on the property in the future?

Thanks in advance.

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Jason Wray
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  • Banker
  • Nationwide
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Jason Wray
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  • Banker
  • Nationwide
Replied Mar 18 2024, 21:57

Gabriel,

There are several factors that come into play like if you are now W2 and the next job is W2 you will be fine. If you are W2 going to 1099 SE (Self employed) then not for 12 months using bank statement loan or a (1 year) 1099 program. You will also want to make sure its n part time income since you need (2) full years of that to qualify.

You can always refinance or purchase an investment home and do not have to have a job or employment, if you use a DSCR loan.

My advice would be do a cash out refinance now and then transition it into a conventional loan.

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Gabriel Z.
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Gabriel Z.
  • New to Real Estate
Replied Mar 18 2024, 23:05

Awesome. Thanks for the tips! I would like to clarify and ask further:

1. I am only about 3 months into my FHA loan. If I potentially need to move away to be on site, is there going to be any problems regarding the FHA loan? To my understanding FHA loan requires you to live there for about a year. This is probably going to dictate whether or not I take the offer or not.

2. I do plan to continue being a W-2. Does going into investment properties hinder the cash out refinance/HELOC capabilities in the next few years?

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Brayden Hrycko
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  • Lender
  • Allentown, Pa
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Brayden Hrycko
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  • Lender
  • Allentown, Pa
Replied Mar 20 2024, 07:17

Hey @Gabriel Z.,

Lenders are aware that life happens and you can't predict the future. The question is, what are you going to do now? If you plan to keep that house, you can keep the current loan on it. If it makes you feel more comfortable and you want to use your fha loan product again here in the future then you will have to wait your seasoning period of 12 months to refinance into a conventional product. However, that does not include investment loans like DSCR. Seasoning is not required on those.

You can still pull equity out of the house whether its a primary, second or investment property in the future. 

Feel free to reach out if you have any more questions.