FHA Loan eligibility

[Brandon Bartley]

Hello,

I would like to purchase a duplex using a FHA loan to house hack in Charleston, SC. I currently own a duplex in upstate NY that I bought 2 years ago using a conventional 20% down loan that I briefly lived in but then relocated to SC. Is there any restriction in using the FHA loan to purchase a duplex that I would live in when I already have a conventional mortgage on another property that is not my primary residence anymore?

Thanks,

Brandon Bartley

[Troy Gandee]

@Brandon Bartley @Bryan O. is correct. FHAs now never drop PMI if you don't put 20% down when you buy. HUD altered the FHA a year or two ago and really messed it up. It used to be one of my favorite loans, but I NEVER recommend it now unless someone has legitimate credit/income restrictions. You should use a conventional. It's easier to qualify for and the underwriting is far easier for multifamily properties. It's not difficult to convert your previous property to an investment. Just reach out to a mortgage lender now and tell them your situation. They will let you know if you can qualify for another without needing to liquidate the first. FNMA guidelines take 75% of the gross rents from a rental property and apply that to the debt service. If your obligations on the property do not exceed 75% of the gross rental for both units, it shouldn't affect your DTI on the next property. Be weary that the taxes on the previous one will increase when you no longer claim it as a primary home. Just discuss everything with your mortgage lender. A good mortgage lender will line you up to succeed regardless of how complicated the situation is. I've helped quite a few people leave one multifamily and buy another.