You can usually only have one FHA loan at a time. There are, however, some specific exceptions to this rule. For example, if you’re getting a divorce, had to relocate for work, or have a growing family, then you could be eligible for a second FHA loan.
If you’re looking to get a loan to purchase a home and don’t have a great credit score, an FHA loan could be the right choice for you. An FHA loan is a government-backed loan built for low-income families who don’t have a great credit history. They usually don’t require as high of a credit score as traditional loans, and the down payment requirements are more flexible.
There is one downfall, however: you can usually only have one FHA loan at a time. This could become an issue if you want to purchase a second home. However, there are some specific circumstances in which you could get another FHA loan. If you’re a cosigner, getting a divorce, or part of a family that has grown, you might be able to get a second FHA loan.
What is an FHA loan?
FHA loans are private loans insured by the Federal Housing Administration. FHA loans are designed to protect lenders from financial risks while helping low-income families buy homes. The FHA backs the loans in case borrowers default.
Types of FHA loans
The following are the types of FHA loans available, and a brief description of what each covers. For a more in-depth overview of these loans, check out SuperMoney’s Definitive Guide to FHA Loans.
| FHA loan program | Purpose or what it covers |
|---|---|
| Condominium FHA loans | An FHA loan for condos |
| Disaster Victim FHA Mortgages 203(h) | For those who have lost their home due to a disaster |
| FHA Adjustable Rate Mortgages (ARM) | An option best for those who are planning to refinance in a couple of years |
| FHA Basic Home Mortgage Loan 203(b) | Allows you to borrow up to 96.5% of the property value |
| FHA Energy Efficient Program | Helps fund energy-efficient home improvements |
| FHA Loans for Manufactured Homes (Title 1) | Insures mortgages financing the purchase of manufactured homes |
| FHA Rehab Mortgage Insurance 203(k) | Allows borrowers to finance or refinance a home and rehabilitation in a single mortgage |
| FHA Streamline Refinance | Helps borrowers refinance their current FHA mortgage |
| Home Equity Conversion Mortgage (HECM) Seniors | Insures reverse mortgages for seniors |
FHA loan requirements
FHA loans have specific requirements that other mortgages may not have.
How to satisfy FHA loan requirements
To be eligible for an FHA loan, you must meet the following criteria:
- Have a minimum credit score of 500–580 and a sufficient down payment for your score. The lower the FICO score, the higher the required down payment you’ll need.
- Take out the loan for a primary residence.
- Have no recent foreclosures or bankruptcies.
- Have a debt-to-income ratio of 43% or less.
- Bring in a steady income and show proof of employment.
- Be a lawful U.S. resident.
How many FHA loans can you have?
So, how many FHA loans can you have at once? Generally speaking, borrowers can only have one FHA loan at a time. But there are a few exceptions to this rule, so long as you satisfy the requirements.
The 100-mile rule
If you received a new job and have to move at least 100 miles away, then you qualify for a second FHA loan. This is called the 100-mile rule.
Divorce
It is common for couples to be co-borrowers when they get a mortgage. This means they are both responsible for repaying the loan. In the case of a divorce, a spouse who moved out and bought a new home could get a second FHA loan.
Increased family size
You can receive another FHA loan if your family size has increased. So, if you have a two-bedroom house but now have six kids, you could qualify for a second FHA loan. Your home must also have at least 25% equity in order to be eligible for this exception.
Buying a HUD real estate owned property
A HUD home is a house that was foreclosed and purchased by the U.S. Department of Housing and Urban Development. If you want to purchase a foreclosed home, it is possible to get a second FHA loan to do so, but you will have to make at least a 25% down payment.
You’re a cosigner
Similar to a co-borrower, a cosigner shares the responsibility of paying the loan. So, if the other borrower misses a payment, the cosigner is responsible for making that payment. A cosigner is usually a family member. If you cosigned an FHA loan and want to take out another FHA loan, you might be eligible to do so.
How to qualify for multiple FHA loans
In addition to fitting one of the exceptions just discussed, you’ll also need to meet the requirement for FHA loans in general. You cannot have any foreclosures; you must have a steady income; and your debt-to-income ratio should support paying two mortgages.
Alternative solutions
Because getting another FHA loan has such specific requirements, you shouldn’t be shocked if it’s not an option for you. Or, even if it is an option, maybe you don’t want a second FHA loan. Thankfully, you have other options besides FHA loans.
Key alternatives to a second FHA loan
Here are a few alternatives to getting a second FHA loan:
- Sell your current home.
- Buy a new home with a conventional loan, or another type of loan.
- Refinance your current home with a conventional loan.
- Rent or lease one home until the other one sells.
- Have a cosigner on your new lease.
FAQ
How many conventional loans can you have?
With companies like Fannie Mae, you can have up to 10 conventional loans at a time.
Can my wife get an FHA loan if I already have one?
A spouse can usually only get a second FHA loan when getting a divorce and moving into a new home.
Can a married couple get two FHA loans?
If they are co-borrowers on the mortgage and do not fit any of the exceptions for a second loan, then they cannot get two FHA loans.
Can you get an FHA loan if you already have a conventional loan?
Yes, if you have a conventional mortgage you can apply for an FHA loan if you meet the requirements, which includes occupying the house you buy with the FHA loan as your main residence. The main limitation for many borrowers is qualifying for the debt-to-income requirement when they already have another mortgage. It is also possible to refinance a conventional loan with an FHA loan, provided you meet all the FHA eligibility requirements.
Can you get an FHA loan if you are not a first-time homebuyer?
You do not have to be a first-time homebuyer to get an FHA loan. FHA loans are specifically for low-income individuals and families who don’t have a good credit score and are looking to purchase a home. Being a first-time home buyer is not a requirement to get an FHA loan.
Key takeaways
- In most cases, you can only have one FHA loan at a time.
- You can get another FHA loan if you
- are getting a divorce,
- are a cosigner,
- have a growing family,
- are moving at least 100 miles away for a job opportunity, or
- are buying a HUD-owned property.
- The second mortgage loan has the same financial requirements as the first one.
- If you don’t qualify for a second loan, look into getting a conventional loan instead.
Find an FHA lender
If you have an FHA loan, you might be able to save some money with an FHA streamline refinance. Check out SuperMoney’s list of the best FHA Streamline Refinance Lenders to learn more about this, and find the right lender for you.
View Article Sources
- Basic FHA Insured Home Mortgage — GovLoans.gov
- Federal Housing Administration — USA.gov
- HUD Handbook 4000.1: FHA Single Family Housing Policy Handbook — HUD
- Refinance Cases — HUD
- Streamline Your FHA Mortgage — HUD
- Supplementary background articles from mortgage lending and personal finance sites — Various
- Best FHA Streamline Refinance Lenders — SuperMoney
- Can You Buy A Foreclosure With An FHA Loan? — SuperMoney
- FHA FAQ: Answers to the 19 Most Frequently Asked FHA Loans Questions — SuperMoney
- FHA Loans: The Pros and Cons — SuperMoney
- How Long Do You Have to Live In a House With an FHA loan? — SuperMoney
- The Definitive Guide to FHA Loans — SuperMoney
- VA vs. FHA vs. Conventional Loans — SuperMoney
Camilla has a background in journalism and business communications. She specializes in writing complex information in understandable ways. She has written on a variety of topics including money, science, personal finance, politics, and more. Her work has been published in the HuffPost, KSL.com, Deseret News, and more.
