FHA loans are government-backed mortgages that help first-time homebuyers and buyers with lower credit scores and low income to achieve the dream of homeownership. FHA loans are available through FHA approved mortgage lender to finance owner-occupied homes. FHA loans do not finance investment properties. So, if you owe an FHA loan, would it be possible to get another FHA loan simultaneously? As per the HUD's general rule, a borrower can have only one FHA loan at a time. After all, you cannot live in more than one house simultaneously.
However, there are some exceptions to this. For example, you may be eligible for another FHA loan if you meet any of the following conditions:
You are selling your old home and buying a new one: In this case, you can apply for an FHA loan to purchase your new home before selling your old home. But you will have to make a down payment of at least 10% of the new home's purchase price.
You are relocating for job reasons: If you are moving to a new place for work-related reasons, you may be eligible for an additional FHA loan to purchase a new home. However, Missouri mortgage lenders will finance another FHA loan only if the new workplace is
reasonably far from your current residence.
You are divorced and buying a new home: If you are going through a divorce and your spouse continues to stay in the current home, then you may be eligible for an FHA loan to buy a new home.
You are co-signing a mortgage with another family member: You may be eligible for additional FHA loans Missouri if you co-sign a mortgage with another family member. By co-signing a mortgage, you can help your relative achieve the dream of homeownership with an FHA loan. Co-signing makes you liable to pay the monthly mortgage payments if the other person defaults.
Your family size has increased: You may be eligible for a second FHA loan if your family size has increased. The HUD allows families to have two FHA loans if the circumstances are justified. You need to prove that your family size has increased and the current home is too small for your growing family. You will also need to show that you cannot afford a larger home without another FHA loan.
You are purchasing a multifamily home: You may be eligible for two FHA loans if you buy a multi-unit property such as a duplex, triplex, or fourplex. The HUD allows the purchase of up to four units of a multi-unit property. In this case, the borrower can use one loan to finance the purchase of the property and the other loan to fund the repairs and renovations.
You are refinancing your existing FHA loan: You may be eligible for a second FHA Missouri loan if you refinance your current FHA loan. The HUD allows borrowers to refinance their existing FHA loans to new FHA loans. However, this is possible only if the new Missouri mortgage loan has a lower interest rate than the existing loan.
Requirements to qualify for more than one FHA loan
If you meet any of the above conditions, you may be eligible for another FHA loan. Consult mortgage lenders near you to help in getting an additional FHA loan. However, the mortgage companies will require the borrower to meet specific financial requirements set by HUD to have more than one FHA loan:
Your current income must be sufficient to support the additional mortgage payments.
You must have a good credit score of about 580 or higher and a DTI ratio of not more than 43% of your gross monthly income.
You need to make a down payment of at least 10% of the purchase price if your FICO score is 500-579.
In case your family size has increased, and you apply for a new FHA loan to purchase a larger home, you need to have at least 25% equity in your current home.
If you are co-signing a mortgage with another family member, then both of you need to meet the financial requirements set by the HUD.
Bottom Line
It is possible to have multiple FHA loans at the same time. But there are certain conditions that you need to meet to be eligible for another FHA loan. However, if you intend to finance an investment property, consider taking another mortgage or refinancing your existing FHA loan to take cash out. You can use the excess money to pay toward a down payment on a conventional loan.
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