Can you have two FHA loans at the same time?

By Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience

Edited by Michael Jensen, Mortgage and Finance Guru

Updated October 20, 2020

The FHA mortgage program applies several rules that are designed to prevent people from using the program to purchase multiple properties.  First, you are required to live in the property you are financing with an FHA mortgage and investment properties are not allowed.

Additionally, according to program guidelines, except under very specific circumstances, you are are not permitted to have multiple FHA loans outstanding on principal residences.  Below we outline the cases when having more than one FHA mortgage is allowed:

Relocation for a job that requires the borrower to move at least 100 miles away from his or her current residence.  For example, if you are transferred to a new job in a different city and you have an FHA loan on your current home, you may be eligible to use the FHA program to buy a home in your new city as long as you are moving at least 100 miles.  In this case you are required to provide documentation that verifies the job transfer or relocation.

Increase in the size of the borrower's family such that the borrower's current residence no longer meets family needs.  If your family outgrows the home you currently live in which was financed with an FHA loan, you may be able to keep the home and use the FHA program to buy a larger home that better accommodates your family.  To qualify for this exception the loan-to-value (LTV) ratio on your current home cannot exceed 75% according to your current mortgage balance and appraised property value.  This means you must have significant equity in your current home to be able to use an FHA mortgage to buy the larger home for your family.

Vacating a jointly-owned property with no plan to return but the property remains occupied by the other co-borrower / co-owner.  The best example of this exception unfortunately is a divorce when one party permanently moves out of the home financed with an FHA loan while the other party continues to live in it.  In this case the personal who moves out of the residence is eligible for an FHA mortgage to buy another home even though they remain on the mortgage for the home he or she no longer lives in. 

The borrower is a non-owner occupying co-borrower on another property, as long as the borrower intends to occupy the home he or she is buying with the new FHA loan.  For example, if a parent is co-borrower on an FHA loan to help a child buy a home that the parent does not live in, the parent is eligible for a second FHA loan to buy their own home to reside in.

I am unaware of any additional circumstances that enable borrowers to have two FHA mortgages outstanding at the same time but there may be additional exceptions for the FHA 203(h) Disaster Relief Mortgage Program, which enables borrowers that live in Presidentially declared disaster areas whose homes were destroyed or seriously damaged to purchase or rebuild a home with no down payment.

Review our FHA 203(h) Program Guide

For example, if your current primary residence -- financed with an FHA loan -- was severely damaged and the home is no longer your principal residence, you may be eligible for a new FHA 203(h) loan.  In general, the FHA 203(h) Program has more accommodating qualification requirements than the standard FHA Program.  If you have additional questions about a specific guideline or program, I recommend that you contact the FHA directly at the website below or by calling 1-800-225-5342.

FHA Contact Information

The table below shows leading FHA lenders in your area.  We recommend that you contact multiple lenders to confirm the eligibility requirements for an FHA mortgage.  Comparing lenders also enables you to find the loan that is right for you.  

Sources

"II.A.1.b.iii.(A)(2)(b) FHA-Insured Mortgages on Principal Residences."  FHA Single Family Housing Policy Handbook 4000.1.  Federal Housing Administration, January 2 2020.  Web.

"II.A.1.b.iii.(A)(2)(c) Exceptions to the FHA Policy Limiting the Number of Mortgages per Borrower."  FHA Single Family Housing Policy Handbook 4000.1.  Federal Housing Administration, January 2 2020.  Web.