Question - First FHA in IN, Moved to CA, Second FHA Possible?

Question

Fellow BP Colleagues,

I have owned one SFR in Indianapolis, IN for roughly 6 years. I purchased via FHA but moved to Los Angeles, CA roughly three years later. Since then I have been renting out that property to some great tenants (I know i'm lucky and extremely grateful!). I've been renting apartments and houses in Los Angeles since I moved and am finally close to having enough capital for a downpayment on a home out here. I've received several conflicting answers from lenders regarding the possibility of purchasing a home here in CA using FHA, since I still own the rental in Indiana that was purchased under an FHA mortgage. Anyone out there have some insight into if this is a possibility for me? Or any advice in general?

Thanks in advance!

Chris Mason · Answer

For a definitive answer, have it run through underwriting as FHA for a TBD Approval. That means the HUD DE endorsed underwriter has made a credit decision. There are circumstances wherein you can have two FHA loans at once, and this actually looks like it checks at least a few of the boxes, but I'd run it through formal underwriting just to be sure, since the exceptions are so relatively uncommon (but not unheard of). Certainty is currency.

Chris Mason · Answer

Yup, that's why for anything super wonky you don't do the 24-48 hour preapproval. You take the time to get a full blown fully underwritten TBD Approval. Might take a week or two, but that's a week or two where earnest money is NOT on the line. Any Realtor will tell you that the value of preapproval can be toilet paper or it can be gold, it depends on the LO. TBD Approval is basically always gold. So if I'm a local LO and want my reputation among local Bay Area Realtors to be that my preapproval letter is as good as gold, the wonky ones are full TBD Approvals even if it means I occasionally lose business from one of my fellow perpetually impatient "now now now" instant gratification-seeking millenials.

Chris Mason · Answer

Yup, always around if you need anything else.

Josh McGuire · Answer

TBD Approval it is! Appreciate the educated response. I have had several lenders give conflicting answers but this one clears it up as much as possible. Certainty is currency. Love it. Will definitely be running it through formal underwriting before attempting to move forward. Thanks again @Chris Mason

Jose Vazquez · Answer

What happens if the offer has being accepted and the loan doesn't go through as an FHA? I know that there are possibilities to swap it to a conventional but it could break the deal right. That's if the seller doesn't want to wait to start the loan process all over again.

Question - First FHA in IN, Moved to CA, Second FHA Possible?

Most Popular Reply