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What are the regulations of converting an FHA loan to a conventional loan and then buying a second home FHA?

Written By: admin on January 11, 2010 2 Comments

Okay so long tale small, we bought our first home with FHA and due to certain circumstances, had to go in with my parents. Instead of selling thehouse, we rented it out. We are now looking to buy a home for us that is on the market but in order to get the loan without having to pay 10% down, we would have to buy it FHA! So this leaves us with having to refinance our rental home into conventional loan and then buying our second home with FHA right? Only problem is in order to qualify for this other home, we would have to count the rental income and unfortunaltely we did not claim this on our taxes! What can I do? We need to go out of my mom’s house! I am going crazy living here but my husband will NOT sell our rental house? Are there any other options?

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2 Responses to “What are the regulations of converting an FHA loan to a conventional loan and then buying a second home FHA?”

  1. AlaskanFerret on: 11 January 2010 at 7:30 pm

    Have you talked to a lender? You may be able to have a second FHA loan, see Q & A below. The problem with your thought is that in order to refinance your current home into a conventional loan your now looking at an investors loan, which requires more down and a higher interest rate. Your better off with two FHA loans. Or keep your current FHA loan then get a principle residence loan using conventional financing with only 5% down.
    Have you talked to a FEW lenders yet? You should talk to more than one as some lenders have different loan programs available.

    SO for the taxes, you haven’t filed taxes for 2009 yet right? You can claim them on those taxes and count 75% of the rent towards your income.

    From: http://www.fha-home-loans.com/
    Q. Can only a first time home buyer use the FHA loan program?
    A. No. You can use FHA home loans as many times as you desire when buying a home or doing a mortgage refinance. The only guideline is that you cannot have more than one outstanding FHA mortgage loan with a loan to value of higher than 75%. You can own rental property and buy your primary residence using FHA mortgage financing.

  2. Noneya on: 11 January 2010 at 8:17 pm

    Your only option is if you fall under one of the exemptions FHA offers that will allow a borrower to have more than 1 FHA loan out at a time.

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