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Yes it is possible for you to qualify for an FHA loan under the circumstances you describe. Though you may have to have sufficient income to qualify counting both the payment on the new home and the payment on your current residence. Changes to underwriting guidelines have made it more difficult to offset the payment on a retained home with that home’s rental income. At the same time FHA often allows for fairly high debt-to-income ratios.
Check with a local lender to see if you can be pre-approved. With many lenders there is no cost or obligation to see where you stand.
Need to make sure you can satisfy the underwriter for your new loan that you WILL be residing in it as a primary residence. Probably need to write a detailed letter of explanation to submit with your file (your loan officer can help with this) stating that your daughter has moved back in, you need more space… If you also manage to rent your current home in advance, providing a copy of the lease will also provide evidence that the new home, rather than your existing one, will be your primary residence. FHA loans are only available for primary residences, hence the importance of proving you will occupy it!
Hi! My first mortgage is a conventional mortgage. My college-aged daughter has moved back in with us, and we are bursting at the seams. The market is too terrible to sell my current home, but we are in a college town and the rental market is booming. Can I get a FHA loan on my second home and rent my first home? My income and credit scores are good. I see that you cannot have 2 FHA loans at the same time, which I wouldn’t. But the low down payment perk of the FHA loan would make everything much better…..
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