FHA 100 mile rule

[Robert Johnson]

Hey BP,

I'm looking at getting a 4 plex as a primary residence for a house hack. I'm working with a lender who is confused about the 100 mile FHA rule. I currently have a SFH under a conventional mortgage that would be about 15 miles away. Does this rule apply if you have a conventional loan going to a FHA?

[Wayne Brooks]

There are actuall Two fha 100 mile rules.

1) The first 100 mile is specifically if you already have an fha loan and want to use that exemption to get a second fha loan at the same time, when is disallowed except for a few exceptions....moving over 100 miles is one of them.

2) The one you are dealing with.....The second 100 mile rule has to do with qualifying.  If you have a conventional loan on your existing primary  and want to buy another primary residence with fha....if the new home is less than 100 miles away you can do it, but under 100 miles, you must Qualify for both loans Without using any anticipated rental income from your existing primary.

As mentioned, even if you can qualify, the step down in lifestyle/desirability is hard to convince the underwriters that you are really going to do it.