Can a Buyer have 2 FHA loans at the same time?

Have you every asked this question? Can I have 2 FHA loans at the same time? Or have you asked the question about a lease agreement on the property? Dealing with today’s loans can be very confusing. One reason for this is the many different updates that have accured over the past few months in the mortgage industry. Here is what you need to know in reference to 2 FHA loans.

There are two exceptions to having two FHA loans at the same time:

1. Relocations: The homebuyer is relocating and establishing residency in an area not within a reasonable commuting distance (typically 50 + miles- but underwriter discretion) from the current principal residence. Note that the relocation does not need to be employer mandated to qualify from this exception.

OR

2. Sufficient Equity in Vacated Property: The homebuyer has a loan-to-value ratio of 75 percent or less, as determined by either a current (no more than six months old) residential appraisal or by comparing the unpaid principal balance to the original sales price of the property. The appraisal, in addition to using forms Fannie Mae1004/Freddie Mac 70, may be an exterior-only appraisal using form Fannie Mae/Freddie Mac 2055, and for condominium units, form Fannie Mae1075/Freddie Mac 466. IN ADDITION (this is NOT an OR- it is AND), the lender must document that the number of legal dependents increased to the point that the present house no longer meets the family’s needs (this one is tricky- and you might need the assists of your loan officer.

So what about Lease Agreements. How do you handle lease agreements?

The answer is:

Here are the exceptions of being able to use a lease agreement to offset current house payment when FHA is being used for financing of current property:

1. Rental income on the property being vacated, reduced by the appropriate vacancy factor as determined by the jurisdictional FHA Homeownership Center (see http://www.hud.gov/offices/hsg/sfh/ref/sfh2-21u.cfm) may be considered in the underwriting analysis under the following circumstances:

2. Relocations: The homebuyer is relocating with a new employer, or being transferred by the current employer to an area not within reasonable and locally recognized commuting distance (typically 50 miles- but underwriter discretion) . A properly executed lease agreement (i.e., a lease signed by the homebuyer and the lessee) of at least one year’s duration after the loan is closed is required. FHA recommends that underwriters also obtain evidence of the security deposit and/or evidence the first month’s rent was paid to the homeowner.

3.  Sufficient Equity in Vacated Property: The homebuyer has a loan-to-value ratio of 75 percent or less, as determined by either a current (no more than six months old) residential appraisal or by comparing the unpaid principal balance to the original sales price of the property. The appraisal, in addition to using forms Fannie Mae1004/Freddie Mac 70, may be an exterior-only appraisal using form Fannie Mae/Freddie Mac 2055, and for condominium units, form Fannie Mae1075/Freddie Mac 466.

So there you have it. If you are looking to buy or sell your next home contact me today! Or visit me at my website at:www.sellorbuyhomefast.com