2nd FHA mortgage - 3.5%?

[Michael M.]

I currently own a home with an FHA mortgage in the Bronx, NY. It is a 2 family home and I live in the home.

I want to refinance to get rid of PMI, get rid of FHA, and tap equity to buy a second multi-family home in the same neighborhood with a new FHA mortgage.

A few questions:

1. Once I have refinanced, does this mean that I can take out a new FHA loan because I no longer have an FHA loan open?

2. If I can take a new FHA loan, will I only need to put down 3.5% to buy the new home (I would use the home equity loan for down payment)?

3. Can I move into the second home from the first home to make it my primary residence and use my current home as an investment property even though the second home is in the same neighborhood (since I am not trying to take out two FHA loans at once but one after the other)?

Thanks in advance for your help!

[Brendon Foster]

HI Michael,

the answer to all 3 is yes. since the properties are so close, one or the other would have to be a an Investment property. since this is your plan of action underwriting should have no issues as there is no means of mortgage fraud with what you plan to do. one thing you will want to keep in mind when qualifying for the new home is debt to income ratios, and having a renter with a signed lease agreement for your current primary lined up will off set the debt ratio helping you qualify with no troubles.

let me know if you have anymore questions or want to speak privately!