FHA Loan for Non-First-Time Home Buyer

[Valerie King]

Is an FHA loan only available to first-time home buyers? (I may have inspired my mom to jump on the future investor bandwagon)

She used an FHA loan on her first home many years ago, but that loan is no longer being paid off. Are they available to those who have used an FHA loan in the past, but are no longer paying back one?

Also, getting a bit off subject, any federal home remodel loans that offer lower interest rates than private?

[Chris Mason]

Best execution for the nomad plan of a new SFR primary every year with minimal down, converting the departing residence to a rental, is Fannie/Freddie 5% down. Not FHA 3.5% down.

• It'll save you a refinance. All refinances have closing costs. You can have up to 10 Fannie loans.
• PMI drops off without needing to refinance.
• That FHA loan has a UFMIP of 1.75%, typically tacked onto loan balance. 3.5% + 1.75% = 5.25%. Primary difference is that 5% down is all towards equity, 1.75% UFMIP is just money lost to you forever.

Doing the nomad thing with FHA is for folks with shoddy credit, people that like being more in debt, or folks that just like giving an extra paycheck to their LO. If you want to do the very first one FHA, and Fannie 5% thereafter, I don't disagree too strongly with that.

This attitude is why I'm like 85% purchase business, 15% refi business. :P