Lenders are very concerned with people doing exactly what you said, so even if your could qualify for the second mortgage, they will proabably look very closel st your other home.
Your best bet would be to rent out he home you are upside down on, then hopefully you will be able to qualify for new home using the rental income.
You would be better off continuing to rent until you first home until you are no longer upside down and can sell it. A short sale makes it nearly impossible to get another mortgage for 2 years and then you will probably only qualify for a sub-prime loan with high interest rates. Your credit will be impacted for 7 years after the short sale.... more
J - Rudi is spot on. I think people hear "it's possible with extenuating circumstances" and think that's going to work. On a national forum like Trulia I'm sure we're going to get some lender on here who says "I CAN DO IT!" And maybe they have. I can tell you in 20 years of originating FHA loans I've never had an Underwriter approve an "extenuating circumstance," and I doubt there's much chance of it happening now.
Just a few short years ago banks and lenders weren't forced to buy back a loan until the borrower actually went into default - now loans are being kicked back due to guideline violations even if payments are being made on time. Since no lender wants to buy back a loan there is virtually no "judgment calls" being made by Underwriting these days. But sure..someone will chime in "but I can get it done." Ok.
Does that mean loans are getting turned down all the time? Nope! Only those that shouldn't be approved in the first place. If the borrower has a job, income, decent credit, and a few thousand dollars for an FHA down payment then they are getting approved every day.