How many months of FHA reserves do I need?
I currently own one piece of property and want to purchase another using FHA. Does anyone know how many
months of "reserves" I need on the 1st property? I've heard everything from 2 to 6 months.
Answers (2)
Thanks for such a speedy response!
FIRST ANSWER
Unless you have at least 25% equity in the current home, you will need to qualify for BOTH payments and you'll probably need 6 months reserves. This is in reference to FHA's "buy and bail" policies which are meant to curtail the practice of people buying a new home to take advantage of depressed prices, then turning around and dumping another foreclosure onto the market.
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