The Federal Housing Administration (FHA) has been instrumental in helping millions of Americans achieve their dream of homeownership by providing accessible financing options. FHA loans are popular due to their lower down payment requirements and more lenient credit score criteria compared to conventional mortgages. However, FHA guidelines generally restrict borrowers to one FHA mortgage at a time. Nevertheless, there are certain instances when you can have two FHA mortgages. We will explore these exceptions and the circumstances in which they might apply below.
Relocation for Work
One of the most common scenarios in which individuals can have two FHA mortgages is when they need to relocate for employment reasons. FHA allows borrowers to obtain a second FHA-insured mortgage if they are relocating for work and their current residence is no longer within a reasonable commuting distance from their new job location. This provision recognizes that job-related relocations are often unavoidable and can place a significant financial burden on families.
To qualify for a second FHA mortgage in this situation, borrowers must provide documentation to prove the job relocation, and the new home must be the primary residence. The borrower must also meet the FHA’s credit and income requirements.
Family Size Increase
Another exception to the one FHA mortgage rule is when a family outgrows its current residence due to increased family size. This could happen through marriage, the birth of a child, or the adoption of additional family members. In such cases, borrowers may be eligible for a second FHA mortgage if they demonstrate that their home no longer meets their family’s needs.
To qualify for a second FHA mortgage under this exception, borrowers must provide evidence of the increase in family size, and the new home must be their primary residence. They will also need to meet the FHA’s financial and credit guidelines.
Vacating a Jointly-Owned Property
A borrower may be eligible for another FHA-insured mortgage if the borrower is vacating (with no intent to return) the principal residence, which will remain occupied by the other party.
Non-Occupying Co-Borrower
Another instance is if someone is a non-occupying co-borrower, being that they are on the mortgage but don’t live in the property, the buyer can get another FHA mortgage as long as it will be their primary residence.
While the Federal Housing Administration generally restricts borrowers to one FHA-insured mortgage at a time, there are exceptions for those who need to relocate for work, experience an increase in family size, a spouse vacates the property, or the buyer was a non-occupying borrower. These exceptions acknowledge that life circumstances can change, and individuals may require a second FHA mortgage to meet their housing needs. However, it’s crucial to remember that borrowers must still meet the FHA’s stringent credit and income guidelines to be eligible for a second FHA mortgage.
Before you pursue a second FHA mortgage, it’s best to consult with a skilled mortgage professional who can guide you through the process and help you determine if you qualify for these exceptions. Additionally, always ensure you fully understand your financial responsibilities and obligations when taking on a second FHA mortgage. To make informed decisions about your homeownership journey, don’t hesitate to contact Andy and his team at 314-221-7797.
Andy Schoemehl | Vice President
314.221.7797 phone | 636.898.1017 fax
NMLS #258507
16253 Swingley Ridge Rd, Suite 200
Chesterfield, MO 63017
