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How many FHA loans can you have?
You can get multiple FHA loans in your lifetime, as long as you qualify. However, there are several restrictions to having more than one FHA loan at a time.
At Credit Union of Southern California (CU SoCal), we make getting FHA and conventional mortgage loans easy!
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What is an FHA loan?
FHA loans have been helping people become homeowners since 1934. The Federal Housing Administration (FHA) is part of the U.S. Department of Housing and Urban Development, and provides mortgage insurance on loans made by FHA-approved lenders. FHA mortgage loans were created to help more people become homeowners, particularly first-time homebuyers and those who have low credit scores and/or low income.
The FHA insures mortgages on single-family homes, and multifamily properties, throughout the United States and its territories. Learn more about how FHA loans work.
Can you get an FHA loan twice?
It is possible to get a second FHA loan. However, to do so the homebuyer(s) must qualify. Keep in mind there is no limit to how many times can you get an FHA loan in your lifetime.
Can you have more than one FHA loan at the same time?
FHA mortgage loans were created to help people purchase a primary residence. This is the reason behind why, generally speaking, borrowers are not allowed to have multiple FHA loans at one time. However, there are circ*mstances in which readers may qualify for multiple FHA loans.
Exceptions to the rule
A second FHA loan may be allowable for homebuyers who meet these qualifying criteria:
- You’re relocating for a new job and need a new primary residence.
- The new home is more than 100 miles away from your current FHA-financed home.
- You're getting a divorce and you intend to purchase a new home in your name only.
- Your family is growing and you can provide evidence of additional legal dependents.
- You were a co-signer for your current FHA loan. If you are a co-signer on a family member’s FHA mortgage you may apply for an FHA mortgage on your own home purchase.
Eligibility requirements for more than one FHA loan
How many FHA loans can you have? If you meet the above-mentioned criteria for multiple FHA loans, the next step is to meet the eligibility requirements of obtaining more than one FHA loan at once.
Credit score. Lenders use your credit score and down payment to determine eligibility.
Down payment. According to the credit bureau Experian, a homebuyer can put as little as 3.5% down on an FHA loan if their credit score is 580 or higher. Homebuyers with a credit score between 500 and 570 will need a down payment of 10%.
Debt-to-income ratio (DTI). DTI compares your debt to how much you earn. Lenders uses this ratio to determine a borrower’s ability to repay a mortgage loan. To calculate your DTI, add all your monthly expenses (debt payments) and divide that number by your gross monthly income (before taxes). A DTI of less than 43% is required.
Other requirements. All borrowers will need to show proof of employment and income, a social security number, and other documents.
Alternatives to applying for another FHA loan
If you do not qualify to get more than one FHA loan there are still options for purchasing a home.
- Sell your current home. If you already own a home, it’s likely that the value has increased since you purchased it. Selling your home could result in a profit that you can use to purchase your next home using a conventional mortgage loan.
- Refinance your current FHA loan. Refinancing to a conventional loan would make it possible to eventually reapply for an FHA loan on a new primary residence in the future.
- Apply for a conventional mortgage. If you’re a first-time homebuyer you may qualify for a conventional mortgage loan as long as you meet the lender’s credit score and DTI requirements.
- Apply for a VA or USDA Loan. VA loans are only for U.S. military veterans and USDA loans are specifically for the purchase of properties that are in certain geographic areas. These types of loans are government programs that have flexible lending requirements, making it easier to qualify.
Why savvy consumers choose CU SoCal
For over 60 years CU SoCal has been providing financial services, including mortgages, Home Equity Loans, HELOCs, car loans, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation loan consultation with a CU SoCal Member Services specialist.
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