FHA clarified several of their guidelines in their new Handbook 4000.1 on September 14, 2015. One of the clarifications made was on the ability to have more Than One FHA Mortgage At The Same Time. It is possible to have two FHA Mortgages at the same time, but only under special conditions.
The need for two FHA Mortgages at the same time usually arises when an FHA Borrower is interested in purchasing another property, and wants to, or needs to keep their present property. A Borrower with an exsisting FHA Mortgage can not just simply choose to have a second FHA Morgage. For example a Borrower with an exsiting FHA Mortgage cannot simply choose to do a second FHA Mortgage because the want to keep the existing house for additional rental income. But if it is for other reasons, under certain circumstances a Borrower under a few special exceptions.
The main reason why there are only a few limited exceptions are, because FHA does not do investment property loans, FHA is a owner occupied mortgage only. This means the property must be the Borrower’s Primary Residence.
In order to determine if the homeowner is eligible for an exception the Underwriter must first take into consideration:
- The length of time the homeowner has owned the existing property with an FHA Mortgage.
- The circumstances which the homeowner needs to purchase another property.
Once the Underwriter has taken the above information into consideration, an exception may be granted for the following reasons (the new clarification/addition to the guideline will be in blue) .
- The homeowner is be relocated by the employer outside reasonable commuting distance from his/her current principal residence. The new guideline defines reasonanble commuting dististance as at least 100 miles away.
- The homeowner may be eligible for another home with an FHA-Insured mortgage if the number of his/her legal dependents increases to the point the present house no longer meets the family's needs
- The first FHA mortgage has a Loan-To-Value (LTV) of 75% or less, based on the outstanding mortgage balance and a current appraisal
- The Borrower is vacating the property, but the property will continue to be occupied by a Co-Borrower. Example: A couple is divorcing
- The homeowner is a Non-Occupying Co-Borrower on a property that he/she purchased with a family member and the property is the principal residence for the other family member.
NOTE:
- If the homeowner later returns back to the location of the first property he/she Is not required to re-establish primary residency in the property, also
- The relocation does not need to be employer mandated to qualify for this exception.
If a homeowner with an Existing FHA Mortgage cannot meet one of the exceptions listed above, then the homeowner MUST:
- Pay off the existing FHA Mortgage on the first residence, or
- Terminated ownership of that residence.
As you can see the clarifications made in the new FHA Handbook 4000.1 on the ability of a Borrower with an existing FHA Mortgage to be able to have More Than One FHA Mortgage At The Same Time, was only to one of the exceptions, but it was an important clarifation as to what a reasonable distance is. The exceptions are not easy to meet and document, but they are possible to meet if the Borrower truly has a need to haveMore Than One FHA Mortgage At The Same Time.
****************************************************************************************************
Info about the author:
George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum,# Haddam,# East Haddam,# Chester,# Deep River, and# Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
Comments(7)