Can You Get an FHA Loan Twice? Everything You Need to Know

The Federal Housing Administration (FHA) mortgage loan is a popular option for homebuyers who want to purchase a home with a low down payment FHA loans only require a 35% down payment for borrowers with credit scores of 580 or higher. This makes them more accessible than conventional loans that typically require down payments of at least 10-20%.

But can you get more than one FHA loan? Let’s take a closer look at the guidelines around getting multiple FHA loans.

How Many FHA Loans Can You Have at Once?

In most cases, you can only have one FHA loan at a time. This restriction is in place to prevent borrowers from using FHA financing to purchase multiple investment properties.

The FHA designed this loan program to help borrowers purchase primary residences, not investment properties. So they limit borrowers to one FHA loan until that loan is paid off

However, there are some exceptions where you may qualify for a second FHA loan before paying off your current one These include

• Relocating for a new job: If your new job requires you to relocate so far away that it’s not reasonable to commute from your current home, you may qualify for a second FHA loan.

• Divorce: If you’re divorcing your spouse and leaving the current home, you may be able to take out another FHA loan by yourself for a new primary residence.

• Increased family size: If your family has grown too large for your current FHA-financed home, you may be allowed a second FHA loan. You’ll need to prove the home is now too small.

• Co-signing: Cosigning on an FHA loan for a family member may allow you to have two FHA mortgages. But remember, you’ll be responsible if they default!

In these special cases, borrowers need to meet eligibility requirements to qualify for a second FHA loan. This includes:

• A debt-to-income ratio below 43%
• Sufficient income to afford both mortgage payments
• A minimum 3.5% down payment on the second home
• At least 25% equity in the current home

As long as you meet these requirements, having two FHA loans simultaneously is possible in limited circumstances.

How Often Can You Get an FHA Loan?

While you can generally only have one FHA loan at a time, there is no limit to how many you can get over your lifetime.

You can get approved for multiple FHA loans throughout your homebuying years. The key is that you can only have one at any given time until you pay off the loan or sell the home.

For example, if you purchase your first home with an FHA loan, you can get another FHA loan for your next home after you sell the first home and satisfy the original mortgage.

Or if you keep your first home as a rental property, you could potentially get another FHA loan after building up enough equity and paying down the loan balance.

So you’re not limited to just one FHA loan ever. You simply have to follow the overlapping loan rules if you want to get multiple FHA mortgages.

Refinancing an FHA Loan into a Second FHA Loan

If you already have a home financed with an FHA loan, refinancing into a second FHA loan is possible in some cases. There are a few ways this can happen:

• You refinance your current FHA loan into a new FHA loan to get a lower interest rate or payment. This second loan would be on the same property.

• You refinance your current home into a conventional loan, freeing you up to get a new FHA loan on a different property.

• You refinance an FHA-financed rental property or second home you still own through an FHA streamline refinance. This allows you to get a new FHA loan on a new primary residence.

When refinancing into a second FHA loan, there are restrictions in place:

• The second FHA loan can’t be a cash-out refinance or adjustable-rate mortgage in most cases.

• At least one property must be your primary residence.

• Properties used as rentals or second homes must be refinanced into a streamline FHA loan.

So a refinance into a second FHA mortgage is possible, but make sure you understand the limitations.

Alternatives to Getting Multiple FHA Loans

If you don’t qualify for two FHA loans at once, you may want to consider alternative options:

• Conventional loan: You may qualify for a conventional mortgage with a slightly larger down payment even if you can’t get a second FHA loan.

• FHA loan alternatives: Other low down payment programs like VA and USDA loans may be options if you don’t qualify for multiple FHA loans.

• Pay off first FHA loan: Consider paying down the loan balance or selling to reach 20% equity. This frees you up for a new FHA mortgage.

• Wait to buy next home: Waiting until you pay off your FHA loan and satisfy the mortgage before buying again is the simplest option.

While multiple FHA loans at once are restricted, you still have alternatives to get the financing you need. Shop around and talk to lenders to find the right loan program for your situation.

Frequently Asked Questions on Multiple FHA Loans

Here are answers to some common questions on getting multiple FHA mortgage loans:

Can I get an FHA construction loan and another home loan?

No, you can only have one FHA loan at a time so you couldn’t get a construction FHA loan to build and a separate mortgage loan to buy another house.

What if I inherit an FHA-financed home?

Inheriting a home with an FHA loan wouldn’t impact your ability to keep your current FHA mortgage. You’d simply need to sell the inherited home or refinance it to a non-FHA loan.

Can I get an FHA rehab loan and purchase another house?

Unfortunately rehab FHA loans have the same one-loan-at-a-time restriction. You couldn’t purchase another property until finishing the rehab loan.

How long do I have to wait between FHA loans?

There is no set waiting period between paying off one FHA loan and getting approved for another. As long as you satisfy the first mortgage, you can apply for a new FHA loan right away.

Can I get an FHA loan for a primary home and rental property?

No, you can’t use FHA financing on two different properties at the same time, even if one is a rental. You’d have to choose a different loan type for the rental.

The Bottom Line

While you can qualify for multiple FHA loans over your lifetime, overlap between loans is limited. In most cases, you can only have one FHA mortgage at a time until you satisfy the loan requirements. But exceptions may allow a second FHA loan for some borrowers.

If you want to purchase another home but can’t get approved for multiple FHA loans, explore alternative mortgages. Conventional loans with larger down payments may be an option. Or consider waiting until you build equity and pay down your current FHA loan before buying again.