April 6, 2011
For the typical home owner, applying for an FHA loan is a major financial commitment. The monthly mortgage payments are an important part of any budget and borrowers are encouraged to plan carefully before closing the deal to make sure they will be able to afford the loan over the lifetime of the FHA insured mortgage.
Some FHA borrowers have circumstances that get them thinking about a second FHA loan for any number of reasons. Some borrowers decide to invest in real estate, others may be required to relocate to another state for career purposes, others may be non-occupying co-borrowers on an FHA loan.
Can a borrower have more than one FHA loan at a time?
On the surface, the FHA answer seems to be no. According to the FHA, “To prevent circumvention of the restrictions on FHA-insured mortgages to investors, FHA generally will not insure more than one mortgage for any borrower (transactions in which an existing FHA mortgage is paid off and another FHA mortgage is acquired are acceptable).”
But the FHA has flexibility in many parts of the loan process, including this rule. FHA requirements include this statement about applying for more than one FHA insured mortgage;
“Any person individually or jointly owning a home covered by a mortgage insured by FHA in which ownership is maintained may not purchase another principal residence with FHA mortgage insurance except under the situations described” in the FHA rulebook. Those situations include relocations, where the borrower “is relocating and re-establishing residency in another area not within reasonable commuting distance from the current principal residence…”
We’ll cover more on this issue in our next blog post.
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: