Can You Use FHA Twice?

[Steve DellaPelle]

Hello,

If I am in an FHA Loan now but plan on refinancing to a Conventional Loan...can I use FHA again after this is done?

Thanks,
Steve

[Daria B.]

one time only according to:

https://www.fha.com/fha_article?id=539

June 14, 2017 - If a borrower is permitted to purchase one home with an FHA mortgage loan, what's to stop the borrower from purchasing a second property? How many single house can an FHA borrower buy with an FHA loan?

The FHA single family home loan program generally permit FHA loans only for owner-occupiers, so the short answer is "just one" in most cases. The rules for these circumstances are found in HUD 4155.1 Chapter Four Section B, which directly addresses the "owner-occupier" requirement. According to Chapter Four:

"At least one borrower must occupy the property and sign the security instrument and the mortgage note in order for the property to be considered owner-occupied."

But the FHA doesn't stop there. It also adds, “FHA security instruments require a borrower to establish bona fide occupancy in a home as the borrower’s principal residence within 60 days of signing the security instrument, with continued occupancy for at least one year."

That does not mean some borrowers don’t qualify for an exception in limited cases. FHA loan rules do permit borrowers to have more than one FHA loan under approved circumstances that can include changes in family size that may justify the purchase of a larger home.

Another circumstance that may warrant an exception to the “one loan” policy occurs when the borrower has a job issue that requires relocation. FHA loan rules address this in Chapter Four of HUD 4155.1, instructing the lender:

"To prevent circumvention of the restrictions on making FHA-insured mortgages to investors, FHA generally will not insure more than one principal residence mortgage for any borrower. FHA will not insure a mortgage if it is determined that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining investment properties, even if the property to be insured will be the only one owned using FHA mortgage insurance."

Chapter Four says that in addition to the exceptions we mentioned previously, borrowers who vacate a primary residence that was jointly owned may also be able to get a second FHA loan Non-occupying co-borrowers on an existing FHA mortgage may also be eligible for an FHA mortgage if the new home is "to be that borrower's primary residence" according to Chapter Four.

Exceptions to FHA rules in these instances are handled on a case by case basis–discuss your needs with the lender to determine if an exception to general FHA loan policy can be made.

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