is it true that if you have more than one rental property yo dont qualify for fha?

Asked by Dave, California Wed Apr 22, 2009

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Shawn Ryan R…, Agent, Belleville, NJ
Thu Dec 8, 2011
fha loans are for owner occupants only
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Ruth Bonapace, , 07030
Thu Apr 23, 2009
Hello Dave and welcome to Hoboken.

As the previous writer stated, YES you can get an FHA loan and own multiple rental properties. I work with several investors in Jersey City and Hoboken who have rental properties and still were able to get FHA loans.

To clarify, you can only have one FHA loan at a time. I am presently working with a couple who has an FHA loan on a condo and they are buying a 2-family brownstone. In order to do this, I am quickly refinancing the condo loan into a conventional loan (makes sense anyway with rates this low) freeing them up to buy the $800,000 multifamily with 3.5 percent down.

However, if you own rental properties, go over the scenario very carefully with your loan officer because the underwriters are going to scruntinize this carefully and will want to make sure that the property you are buying will be owner occupied -- and not just because you say so. It has to pass the common-sense test: i.e. If you own two four-family homes in the neighborhood that you rent out, why would you be buying a third one of the same type to live in? However, if you are purchasing a condo or a one or two-family home (in that scenario) then you are probably fine.

The limit on the number of mortgages has mostly to do with contiguous properties and the clarification of how this works is in the fine print of the HUD lending manual. I've personally never had anyone denied an FHA mortgage on that basis.

If you would like further assistance feel free to contact me. I've been in the mortgage business for 15 years and I have been doing FHA loans for that entire time.

Ruth Bonapace
mortgage specialist
201 741 5269
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Grace Hanamo…, Agent, Cupertino, CA
Wed Apr 22, 2009
Hello Dave and thanks for your question.

During our "mortgage update" today with my colleagues, we've learned that it is definitely NOT true that you would not qualify for FHA if you have more than one rental property, but there is a limit to how many homes you can own. Keep in mind, however, that FHA loans may only be used to purchase owner occupied or primary residences. So, if you are looking for a loan to buy another property to rent, you will need to find a non-FHA lender to complete the deal.

For more information regarding FHA rules and qualifications, contact your mortgage broker or check out the government's site at or

Good luck and happy house hunting!!

Grace Morioka, SRES, e-Pro
Area Pro Realty
San Jose, CA
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