Yes you can. Here’s the best possible scenario to have to FHA Loans out at the same time. You purchased your home originally with an FHA Loan, put 3.5% down and now your situation has changed.
Any one the following is makes sense with FHA:
- perhaps your business is such that you need a bigger living environment
- baby on the way
- more children living in the household
- parents and/or extended family living in the household
- job status changed where you are redirected from one location to another and moving made more sense
In other words, the only way to have two FHA Loans out at the same time, is to have a significant reason or rather a justification for moving out of your current FHA home renting it out and then using another FHA Loan to buy a new primary home. If you meet the make sense approach that the FHA requires, yes you can have to FHA Loans out at the same time one FHA loan for your primary home and your original FHA Loan for your property you converted into a rental.
Mortgage tip: it is important to note, in order to convert your current FHA Loan into a rental, if you would like to use gross rents to offset the mortgage payment, you’ll need to have at least 30% equity or more in the home being vacated and turned into a rental. If you don’t have 30% equity in that property, you will have to qualify to purchase the new home with both mortgage payments, and any other liabilities you might have in addition to both payments.
For example if your mortgage payment on the new home is $2200 per month, and your payment on the home you’re renting out is $1700 per month, you’ll have $3900 worth of payment liabilities that need to be offset with your gross monthly income. In other words, to make such a transaction work with less than 30% equity in the rental property, you have to have income to the tune of about $8666 per month, assuming no other payment obligations.
If you would like to learn more about FHA Loans and the pros and cons of this type of mortgage financing, you can start today by contacting Scott.Sheldon@nafinc.com or getting a complementary FHA Rate Quote.