In general, the Federal Housing Administration (FHA) does not ensure more than one mortgage per borrower. This is to prevent borrowers from circumventing the restrictions placed on FHA-insured mortgages to investors.
The FHA does not ensure a mortgage if it determines that it is used as a vehicle to acquire an investment property, even though the property acquired is the sole property of FHA mortgage insurance.
Borrowers must meet certain criteria or conditions to have more than one FHA Home Loan. To be considered eligible for a new FHA Home Loan under any of these exceptions, the length of ownership of the previous property must be examined and the circumstances in which a borrower seeks to purchase a new property must also be determined.
Relocation Thorough FHA Loan
If a borrower has used an FHA Home Loan to buy a home but is residing in another neighborhood that is not at a reasonable distance from the current principal residence, he or she may obtain another mortgage using the FHA-insured financing. The borrower, in this case, is not required to sell the principal residence. Relocation must not be mandated by an employer for the borrower to qualify. In addition, if the borrower returns to the area where he purchased a property purchased with an FHA loan, there is no need to reinstate the principal residence in that property to qualify for another FHA mortgage.
An increase in the size of the family
A loan may be able to obtain another home using an FHA-insured mortgage if the number of dependents increases to a size that renders the current principal residence unable to meet the family’s needs. The borrower must provide evidence of an increase in the number of dependents living at home and evidence that the home is no longer sufficient to meet the needs of the family. The borrower will also be required to repay the existing FHA mortgage at a loan-to-value ratio of 75% or less.
Leave a condominium property
If a borrower leaves a residence that is still occupied by a co-borrower, the shipper is allowed to obtain another FHA Home loan. The situations in which this applies include divorce, when the ex-spouse leaving the establishment purchases a new principal residence or when one of the co-borrowers leaves the existing property.
Are FHA loans fixed?
An FHA loan is a government-backed mortgage that offers more flexible loan terms than conventional loans. Interest rates on FHA mortgages are generally higher, and the buyer usually has to pay monthly insurance premiums in conjunction with the loan monthly payments. There are FHA loans available both with fixed rates and adjustable rates.
FHA loans are insured by the (FHA) Federal Housing Administration. The FHA does not provide loan money, but rather provides a guarantee to the lenders that the loan will be repaid, assuring the lender that it does not take a financial risk by extending the applicant’s credit. These loans often have a less rigorous qualification process due to the lower down payment and credit requirements than traditional mortgages. Most FHA mortgages require down payments as low as 3.5%, but the interest rates on these loans are generally higher than conventional mortgages. In terms of credit, an FHA Home loan program usually allows an individual to qualify even if he has outstanding credit, or he does not have a long credit history.