http://www.trulia.com/voices/Home_Buying/Is_there_any_way_around_thenew_equity_in_owners_-134854erty to live in? We ran into issues, even with 10% down and 800 credit scores, because of a 51% debt to income ratio. This debt was from a start up business loan, since closed down (retail) We were trying for an FHA loan. and needed 25% equity in the home we currently own and planned to lease and had a signed lease.en-ushttp://www.trulia.com/voices/profile/Real_Estate_Pro-Dover_NH-110364/http://www.trulia.com/voices/profile/Real_Estate_Pro-Dover_NH-110364/Below is what the guidelines say for FHA: Conversion of current primary home to investment property when buying new owner occupied home. *Both the current and the proposed mortgage payments must be used to qualify the borrower for the new transaction *Rental income on the property being vacated, reduced by the vacancy factor, may be considered in the underwriting analysis under either of the following circumstances: 1/ Relocations - When the homebuyer is relocating with a new employer or being transferred by the current employer to an area not within reasonable commuting distance. 2/ Sufficient Equity in Vacated Property - The homebuyer has a loan-to-value ratio of 75% or less as determined by either: ***A current (within 6 months) residential appraisal ***Calculating the LTV by taking the current unpaid principal balance of the existing lien to the original sales price of the property. I hope this helps. Please call if any questions. Wayne Laverdiere Envoy Mortgage Dover, NH (603)749-5626Tue, 09 Jun 2009 09:12:44 -0700