July 10, 2012
A reader asks, “If my brother and I purchased a home with FHA loan, can I still qualify for a FHA loan if I purchase a home on my own. What would the down payment be?”
FHA loan down payment rules state the borrower must put down a minimum of 3.5%.
On the other part of this reader question, there’s additional information needed. Is the reader a primary borrower? A non-occupying co-borrower?
FHA loan rules vary depending on a variety of factors. For example, a non-occupying co-borrower might be technically eligible to apply for another FHA home loan, but FHA occupancy requirements for single-family purchases wouldn’t permit the primary borrower to do the same.
Why?
FHA home loans require the borrower to certify he or she will occupy the home as the primary residence. A borrower can’t have two addresses as their primary residence, and would be denied an FHA mortgage on the basis of having the first FHA home loan.
There could be an exception in some cases–if two people applied for an FHA home loan as the primary occupants, and later refinanced the mortgage, depending on the nature of the refinancing loan the borrower may be able to apply for a new FHA mortgage.
FHA refinancing loans require occupancy–for example, you’ll find specific requirements for occupancy listed in the rules for cash-out refinancing. But those who refinance FHA mortgage loans with conventional refinancing loans may not be subject to the same restrictions with regard to occupancy, but the borrower’s debt-to-income ratio will be scrutinized, including the amount owed on the first home loan. Is it theoretically possible to purchase a second property with an FHA mortgage?
Under the right conditions, yes–but the debt-to-income ratio may play a big part in whether the lender is willing to approve the second loan.
Do you have a question about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
Browse by Date: