Home Buying in Irvine>Question Details

JV, Home Buyer in Irvine, CA

Can i buy a second home with the first one being an FHA?

Asked by JV, Irvine, CA Mon Dec 31, 2012

Hi,

I am currently living in a home that is backed by FHA and has more than 20% equity built. I would like to buy an another home to live and rent the current one. What are my options and the best way to to do it?

Thanks

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Answers

12
According to Mason McDuffie, you can rent out your existing home and buy a new one with a new FHA loan....for further details contact loan rep Suzy Dukelow as shown below.....
Branch Manger
9891 Irvine Cneter Dr #200
Irvine, CA 92618
Office 949-858-5977
Cell 949-632-5148
Fax 866-701-8494

For property management for the rental, contact Linda M. Lukas, 714-381-1723 bROKER
LUKAS PROPERTIES
0 votes Thank Flag Link Thu Jan 17, 2013
The answer is yes! You can buy a second home and third home however, you can't get an FHA loan unless you sell your first one. Per FHA guidelines, you cannot have more than one FHA house. You can go conventional on the second one if you want to keep the 1st one.
0 votes Thank Flag Link Thu Jan 17, 2013
Hi

I have seen a lot of misinformation here on Trulia.....yes you can buy another home using FHA insured financing.....even if you already have an FHA insured loan. This is per Mason/McDuffie Mortgage a very reputable company....... There is no limitation as to the # of FHA loans you can have............ Qualification is another subject however. I always recommend prequalifying with an EXPERIENCED (FHA) mortgage lender....many lenders have very little FHA experience and therefore would not be a good choice. All lenders are not created equal.

My clients have used and recommend the experienced lenders like MasonMcDuffie that I have introduced them to...these are seasoned professionals that can insure a seamless transaction.

Steer clear of people encouraging refinances without sufficient information regarding your individual circumstances. Continued refinancing and pulling money out of properties contributed to the problems we have today.......refinancing to get a lower interest rate however is generally a good idea as long as the new loan has no down side....

For experienced service call me at 714-381-1723...

Linda M. Lukas
Broker
LUKAS PROPERTIES
0 votes Thank Flag Link Wed Jan 2, 2013
Hi JV:

My first comment is: if you have an FHA mortgage that has 20% equity in the home REFINANCE!!
Not only will you be able to decrease the interest rate, but that mortgage insurance will go away, as well!

That being said: when purchasing a new owner occupied home and you choose to rent out your 'departing' residence as it is called, two issues must be addressed:

1 In order for the potential incoming rent to qualify as income to offset your payment, you must have 30% equity in the 'departing' residence or the rent will not be utilized. You say you have 20%, so the potential rent would not be considered.
An appraisal of the departing residence will need to be provided for the new lender to assess/

2.You must qualify for both the full (or residual) departing residence payment.

Depending on how much you have for down payment on the new home will dictate how we best move you forward on your purchase.

Please feel free to contact me at: cgravelle@diversifiedmg.com and we can discuss in greater detail.
cg
0 votes Thank Flag Link Wed Jan 2, 2013
Good morning JV,
Let me help you, if you want other FHA loan you need 25% equity in your current property and the new one must be at least bigger or relocating closer to your job, etc.
Now, you do not have to buy other property thru FHA finance you can do it conventional fiance with 3% down.
FHA is more expensive and less flexible (closing cost and property conditions ) than Conventional.
As a local lender we offer to you free per-approval good for 90 days, $500 for closing cost, up to .625BPS on rate, VIP membership and more.

Please come to our bank branch and let us help you!!

Libardo Quintero
NMLS 380933
LQuintero@kinecta.org
http://www.kinecta.org/lquintero
949.861.0367
0 votes Thank Flag Link Wed Jan 2, 2013
Hi JV,

You can normally have no more than one FHA loan at a time; HOWEVER, there are exceptions:

1) Relocations.
If the borrower is relocating and re-establishing residency in another area not within reasonable commuting distance from the current principal residence, the borrower may obtain another mortgage using FHA insured financing and is not required to sell the existing property covered by a FHA-insured mortgage.

2) Vacating a Jointly Owned Property.
If the borrower is vacating a residence that will remain occupied by a co-borrower, the borrower is permitted to obtain another FHA-insured mortgage.

3) Non-Occupying Co-Borrower.
A non-occupying co-borrower on property being purchased with an FHA-insured mortgage as a principal residence by other family members may have a joint interest in that property as well as in a principal residence of their own with a FHA-insured mortgage.

4) Increase in Family Size.
The borrower may be permitted to obtain another home with an FHA-insured mortgage if the number of legal dependents increases to the point that the present house no longer meets the family's needs.

The FHA guidelines also state, “Under no circumstances may investors use the exceptions described above to circumvent FHA’s ban on loans to private investors and acquire rental properties through purportedly purchasing “principal residences.” Considerations in determining the eligibility of a borrower for one of these exceptions are the length of time the previous property was owned by the borrower and the circumstances that compel the borrower to purchase another residence with an FHA-insured mortgage. In all other cases, the purchasing borrower either must pay off the FHA-insured mortgage on the previous residence or terminate ownership of that property before acquiring another FHA-insured mortgage."

Reference: Handbook 4155.1: 4.B.2.c-d

Contact http://diversifiedmg.com/Claudia-Gravelle/ to move forward with your plans.


-Steve
0 votes Thank Flag Link Tue Jan 1, 2013
You can purchase another home. Just not FHA if you are not to occupy it.
That being said a conventional loan for an investment property you down would be 20% up to 40%. You should be talking with a lender about what you can do and what's available for you and your circumstances. That's the only way to find out for sure what you can do

Ingrid Ski Realtor
949-874-0432
OCAreaHomes@gmail.com
0 votes Thank Flag Link Tue Jan 1, 2013
Hi JV,

I am a local lender. There a circumstances where you can purchase another home when you already have a FHA financed home utilizing another FHA loan. That being said, it would be a lot easier to purchase your next home with conventional financing. If you are vacating your current residence you must have at least 30% equity in that house if you want to offset your current mortgage with the rent to qualify. Otherwise you must qualify for both house payments. Please contact me if you have any other questions so I can let you know more specifics based on your particular situation.
0 votes Thank Flag Link Mon Dec 31, 2012
Hello and Happy New Year JV,

FHA loans are government backed and are for owner occupied buyers, meaning the owner must live in the home as their primary residence. You may be able to buy another with a non-FHA loan but you would have to qualify for both loan payments or a better idea that was already suggested is to re-finance your current FHA loan into a conventional loan. Then you will have more options available.

I can put you in touch with a couple very good mortgage brokers that may know of a path that you would be able to follow to do what you are trying to accomplish. Let me know if you want their contact information.

Good luck,
Brian Wilson, Realtor
DRE# 01321478
949-933-0852
0 votes Thank Flag Link Mon Dec 31, 2012
Hi
To the best of my knowledge your current FHA loan is adequate and no refinance is needed to buy a new home. It is the VA loan program that requires occupation by the owner for the life of the loan not FHA. You might try reading your loan documents or contacting a lender.....You can have FHA loans on several properties at one time and I believe you can assume an existing FHA loan as an investor........contact me at 714-381-1723 and we can research this situation further.

Linda
0 votes Thank Flag Link Mon Dec 31, 2012
Hello JV,

FHA loans are for owner occupied properties.

You should consult a lender about refinancing your FHA home to a conventional loan, then you can rent it out and buy a second home.


Best of Success to You!

Kawain PAyne, Realtor
0 votes Thank Flag Link Mon Dec 31, 2012
Since FHA requires the home be owner-occupied, one option is to refinance your current home with a conventional loan. Your best bet would be to discuss your finances and situation with a mortgage broker who can give you your options and pre-qualify you for a new loan. I work with a lot of good loan people, so please feel free to contact me at the email if you'd like more help.

Best,

Joe Van Fossen
Keller Williams Realty
(714)584-7154
joe.vanfossen@gmail.com
0 votes Thank Flag Link Mon Dec 31, 2012
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