FHA Property Loan Questions

[Bryan Robinson]

Hi all,

I'm looking to buy my first duplex and had some questions about the process of refinancing out of an FHA loan after 1 year of occupancy. My situation is this I have 10% saved up for duplex in either Oregon or California. After purchasing and living in the property for one year I want to purchase another multifamily in the same area using equity I've built in my first duplex. How do I refinance and if so what would my monthly rate increase to? Is it possible to maintain the FHA loan status but refinance using equity into a 20% loan to avoid PMI? What if I wanted to move out and do another FHA owner occupied loan, would I have to refi into a conventional loan? The way I see it I have a possible deal in Redmond OR or Riverside CA both $225,000 each rent for about $1050 a month. I also understand the current value for both is about $275,000:

$2100 GSI

$126 Vacancy

$1974 Operating Income

$987 Expenses

$987 NOI

$909 Debt

$78 Cash Flow

This is at 10% FHA with PMI. Now what are my options when I refi after a year? Will my new loan be based on the market value (~$275,000) because based on the new rates the property would generate negative cashflow ($1115/month P&I). What would you suggest I do, am I missing anything? How were other people able to acquire their next multifamily after house hacking their primary residence using FHA? Thanks for your help!

Bryan