How do I refinance my 1st rental property to get a new FHA loan?

[Nathan M.]

Hey everyone, I know there have probably been quite a few refinance questions on BP, but mine has a couple twists I'm hoping you can help with.

I own a rental property in New York, but recently moved to Florida. My fiancee and I are trying to buy a new home here in FL (probably a duplex or multi unit to be able to live and rent at same time), and need to pursue FHA because we need to keep the down payment low.

Problem is, the property in NY is in my name and is a 30 year FHA. Since I can't be on two FHAs myself, and my fiancee's income probably wouldn't qualify her to get the new house on her own, I would need to refinance my NY property to free myself up to be on the new FHA loan.

I keep reading that to refinance a rental property though is much harder: higher interest rates, more restrictions, etc. Plus, I believe I'm sitting at only about 20% equity in that house, which may hurt my chances of qualifying for a refi or getting a "yes" from a lender.

Am I pretty much out of luck until I have more equity, or do I have other options? Thanks!