How Often Can You Get An FHA Loan? A Detailed Guide

Getting an FHA loan can be a great way for many homebuyers to purchase their first home. With lenient credit requirements and low down payments, FHA loans make homeownership attainable for those who may not qualify for other types of mortgages.

But can you get an FHA loan more than once? Or are you limited to just one FHA loan in your lifetime?

The short answer is that yes, you can get multiple FHA loans throughout your homebuying years. However, there are limitations on how many FHA loans you can have at the same time.

In this comprehensive guide, we’ll explain:

• What an FHA loan is
• FHA loan requirements
• How many FHA loans you can have at once
• Exceptions to allow multiple FHA loans
• How often you can get an FHA loan
• Tips for qualifying for multiple FHA loans

Let’s dive in!

What is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration. Because the FHA insures these loans, they are considered low-risk for lenders. That allows lenders to offer FHA loans to borrowers who may not qualify for conventional mortgages.

Here are some key features of FHA loans:

• Low down payments – You can put down as little as 3.5% with a minimum credit score of 580. Without FHA insurance, many lenders require 10-20% down.

• Lenient credit requirements – You can qualify with a credit score as low as 500 with 10% down. Many conventional loans require scores of 620 or higher.

• Lower income threshold – FHA uses more lenient debt-to-income ratios, allowing borrowers to qualify with higher debt.

• First-time homebuyer friendly – There are no restrictions on whether you must be a first-time buyer to get an FHA loan.

Overall, FHA loans provide easier access to home financing for those who may not otherwise qualify for a mortgage. However, in exchange for lower requirements, these loans do come with premiums and fees.

FHA Loan Requirements

While FHA loans offer more flexible qualifying guidelines than conventional mortgages, you still need to meet certain requirements:

• Credit score – At least 500 with 10% down, or 580 with 3.5% down . Most lenders require minimum scores of 580.

• Down payment – Options for 3.5% to 10% down based on your credit score. Gifts and grants can be used.

• Debt-to-income ratio – Your total monthly debt payments cannot exceed 43% of gross monthly income. May go up to 50% with strong compensating factors.

• Homebuyer education – Required for first-time buyers.

• Occupancy – Home must be your primary residence, not a vacation or investment property.

• Mortgage insurance – Required on all FHA loans for the life of the loan.

• Home inspection – An FHA appraisal is required to ensure the home meets minimum property standards and requirements.

As long as you meet these guidelines, you can qualify for an FHA loan. But how many times can you get approved?

How Many FHA Loans Can You Have at Once?

The FHA allows borrowers to have multiple FHA loans over their lifetime. However, there are strict limits on how many you can have at the same time.

The general rule is you can only have one FHA loan at a time.

This policy prevents the FHA loan program from being used to purchase investment properties or vacation homes. FHA mortgages are intended to help buyers finance their primary residence.

Having more than one FHA loan simultaneously is prohibited in most cases. However, there are some exceptions.

Exceptions to Allow Multiple FHA Loans

In certain situations, you may qualify to take out a second FHA loan while still holding your first. These exceptions include:

• Relocation – If you get a new job that makes your commute unreasonable, you may qualify for a second FHA loan.

• Increase in family size – If your family has grown and your current home no longer meets your needs, you may be approved for a second FHA loan. You’ll need to show documentation that your family size has increased.

• Divorce – If you jointly owned a home with an ex-spouse and are now purchasing a new home on your own, you can get a second FHA mortgage.

• Co-signing – If you co-signed on an FHA loan for a family member, you can get a second loan for yourself.

To qualify for one of these exceptions, you’ll also need at least 25% equity in your current home. You’ll also need to prove you can afford both mortgage payments.

As long as you meet one of the exceptions, there is no required waiting period between getting multiple FHA loans.

How Often Can You Get an FHA Loan?

Because FHA mortgages are intended for primary residences, your ability to get multiple loans depends largely on how often you move.

For example:

• If you purchase your first home with an FHA loan, live there for 5 years, then decide to move, you can absolutely get another FHA loan for your new primary residence once you sell the first home.

• If you get an FHA loan today, then want to purchase a vacation home with an FHA loan next year, that would not be allowed because you can’t have two FHA loans at once.

• If you inherit a home 5 years after getting an FHA loan for your primary residence, you could get a second FHA mortgage for the inherited home as long as you sell the initial property.

There is no set limit on how often, or how many times, you can get approved for an FHA loan. You can continue applying for FHA financing as you purchase and sell homes over your lifetime.

The key factors are:

1. You can only use FHA loans to buy your primary residence.

2. You can generally only have one FHA loan active at a time.

3. You must qualify for the new loan and sell the former home before taking out another FHA mortgage.

As long as you meet those criteria, there is no restriction on how often you can get an FHA loan or how many you can accumulate over your homebuying life.

5 Tips for Qualifying for Multiple FHA Loans

If you want to qualify for more than one FHA loan over time, here are some tips that can set you up for success:

1. Maintain good credit – Having a credit score of at least 580 will ensure you qualify for multiple FHA loans as you move between homes. Keep up with payments and responsible credit use.

2. Watch your DTI – Total debt obligations shouldn’t exceed 43% of income. This ensures you can afford multiple mortgages.

3. Build equity – To qualify for a second FHA loan while keeping the first, you need 25% equity in the current home. Make extra mortgage payments to build equity faster.

4. Save for multiple down payments – Come up with 3.5% to 10% down each time you want to get a new FHA mortgage. Keep money in savings.

5. Keep comprehensive records – Thoroughly document events like job relocations, family size changes, inheritances, or divorces that allow you to qualify for multiple FHA mortgages.

Sticking to these tips will help set you up to qualify for multiple FHA loans successfully as you move through different phases of homeownership.

The Bottom Line

FHA loans can be a great way for borrowers to become homeowners, even if they haven’t been able to save a large down payment or have less-than-perfect credit. And the good news is you aren’t limited to just one FHA loan forever – you can continue qualifying for new FHA mortgages as you relocate and move between homes.

However, restrictions are in place to limit borrowers having multiple FHA loans simultaneously. So while you can get an FHA mortgage as often as needed as you buy and sell primary homes, you generally can only have one FHA loan active at a time.

Following the guidelines and tips we covered today will set you on the path to getting multiple FHA loans smoothly over your homebuying journey. So take advantage of this flexible financing option – and good luck with your upcoming moves!