FHA - 2-4 Unit Owner Occupancy Lender Question

[Zach Schwarzmiller]

Greetings,

I have a question I really want an answer to that I am somewhat not understanding. I wish I knew a bank which I could call tonight, but I work in the commercial world and just don't know how to find the answer this late at night!

Currently I owner-occupy a triplex in Washington State (not sure if that matters or not). I bought the triplex on 5/31/2013 with an FHA owner-occupancy loan with 3.5% down. I am still living there and understand I have to live there for exactly one year to be in legal compliance. I now want to write an offer on a four-plex and have it close 6/1/2014 allowing me the 60 day window to move into the new four-plex and still be in compliance.

Question: Do I need to have the first owner-occupancy FHA loan paid down to a certain percent before I am able to buy another building? I want to buy this 2nd building with 3.5%, 5% or 10% down with another owner-occupancy loan; I need to learn more about the PMI rules now which are different from when I closed last year. I would choose whatever does not tie FHA in for the life of the loan.

Anyone know the answer on if I can buy now or if I have to pay down my current loan to a certain percentage?

I know before you can drop PMI I have to be 80% LTV and/or 2 years at the property. If I were to have the property reappraised toady I would be at or a little better than 80%, but that's because I added rental income and the market has appreciated. Don't think this matters for getting another loan, but I am not sure?

Any help greatly appreciated!

[Fran Flanagan]

If you can put 10% or even 5% down, there should be no need to get an FHA. It would just be a conventional mortgage with PMI.

If you have the cash available, ask about paying the MI up front instead of monthly. You'll save a lot this way and never have to get a later appraisal to have the MI lifted.