Can You Have More Than One FHA Loan at a Time? Everything You Need to Know

Getting approved for an FHA loan can be easier than other mortgage loans thanks to low down payments and flexible credit requirements. But you may be wondering – can you have more than one FHA loan at the same time?

The short answer is yes, you can have multiple FHA loans under certain circumstances. However, there are strict occupancy rules you’ll need to follow. The FHA doesn’t want borrowers abusing the system and using multiple FHA loans to buy investment properties.

In this comprehensive guide, we’ll explain

• What an FHA loan is
• When you can qualify for multiple FHA loans
• FHA guidelines on multiple loans
• How to meet eligibility requirements
• Alternatives if you don’t qualify for multiple loans

What is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA) Popular features include

• Low down payments – just 3.5% if your credit score is 580+
• More flexible credit requirements than conventional loans
• Can be used to buy, refinance, or renovate a home

The catch is that FHA loans must be used to purchase a primary residence you plan to live in. You can’t use FHA financing for second homes or investment properties.

The FHA protects against abuse by placing limits on how many FHA loans you can have at once. But you can qualify for multiple loans if you meet the requirements.

When Can You Get an FHA Loan Twice?

Generally, you can only have one FHA loan at a time. But FHA guidelines provide some exceptions that allow you to qualify for multiple loans simultaneously.

According to FHA rules, you may be able to take out another FHA loan if:

• You’re relocating for a new job opportunity
• Your new home is 100+ miles from your current FHA-financed property
• You need more space for a growing family
• You’re getting divorced and your spouse is keeping the home
• You’re co-signing an FHA loan for someone else
• You were a co-borrower and now want to buy your own home
• You’re purchasing a HUD-owned property

You’ll need to provide documentation proving your situation qualifies for an exception per FHA guidelines.

How Many FHA Loans Can You Have if Refinancing?

When refinancing current FHA loans, you must keep at least one property as your primary residence. Any others must be refinanced as investment properties.

Additionally, if refinancing a rental property with FHA financing, you must:

• Use the FHA streamline program without an appraisal
• Refinance it as an investment property
• Choose a fixed rate, not an adjustable rate
• Not do a cash-out refinance

If your credit has improved since getting your first FHA loan, check out conventional loan options which may provide better rates/terms.

FHA Multiple Loan Occupancy Rules

The FHA has stringent requirements regarding how you occupy an FHA-financed property. Their goal is preventing abuse of the program by real estate investors.

Here are the key occupancy guidelines for FHA loans:

• The new property must be your primary residence
• You can’t use FHA financing to buy a vacation home or rental property
• All borrowers must intend to occupy the home
• You must live in the home within 60 days of closing
• You can’t lease the property after closing without FHA approval
• Occupancy status may be monitored for up to a year after purchase

Make sure you comply with all occupancy rules to avoid issues with your FHA loan down the road.

How to Qualify for Multiple FHA Loans

Qualifying for one FHA loan is easier than two. You’ll need to prove to lenders you can handle multiple mortgage payments each month.

Minimum FHA requirements include:

• Credit score of at least 580
• Total debt-to-income ratio below 43%
• Sufficient income/assets to make both payments
• 3.5% down payment if credit score is 580+
• 10% down payment if credit is 500-579

Your lender will also want to see you have emergency savings that cover 2-6 months of mortgage payments in case you lose your job or become unable to work.

Using Rental Income to Qualify

If you want to count rental income from an existing FHA-financed property toward your new mortgage payment, you must meet additional FHA rental income guidelines:

• Verify at least 2 years of rental income history
• Provide the initial purchase date if less than 2 years
• Submit a rental income analysis from an appraiser
• Prove you have 25% equity if no rental history
• Show the signed lease agreement and security deposit/first month’s rent
• Document the new property will be your primary residence

Meeting the requirements for using rental income can be challenging. Be prepared to show substantial documentation.

Alternatives to Multiple FHA Loans

If you don’t qualify for two FHA loans, other programs may offer better options:

• Fannie Mae HomeReady® – 3% down payment with a 620 credit score
• Freddie Mac Home Possible® – 3% down with 660+ credit
• VA loans – No down payment for eligible military borrowers
• USDA loans – 100% financing in designated rural/suburban areas

Conventional loans also have more flexibility for financing investment properties than FHA loans.

The Bottom Line

While you can have two FHA loans simultaneously in certain situations, it’s not common. Requirements are strict to prevent misuse as investment properties.

If you don’t meet FHA guidelines for multiple loans, an alternative mortgage program may better suit your needs. Be sure to work with a knowledgeable loan officer who can help you select the most fitting option.