J_will, thanks for the additional info. 20 miles would be considered within the same commuting area, so unfortunately it wouldn't qualify under the exception rules to get a 2nd FHA loan nor use the rental income from the home you are vacating without having the required equity. Conventional financing would be your option, however with conventional financing & when you don't have the 30% equity in the home you are vacating then you cannot use it's rental income to qualify and plus you'll need 6 months PITI reserves (available checking, savings, 401k, etc. after you close) for both the existing mortgage payment + the new one. So if your income can qualify for both payments (you never know until the payments are run) you could be OK to qualify. But if you can't qualify, then what you can do though, is you could move out of your current home and rent a place nearby your family, then rent out your old home, claim it on your 2013 tax return, and then in early 2014 you could purchase (with conventional financing still) but you'd be able to use the rental income without having the required equity (because it would no longer be a "departing residence") and wouldn't need to have the 6 months PITI in reserves. A few of my clients have done this, and while it's not an immediate solution, it gets it done down the road.
Shane Milne | Lending in all 50 states | NMLS #81195
shane@thebesthomeloans | 949-273-4161 direct