How Many FHA Loans Can You Have? HUD's One-Home Rule and the Four Exceptions

The moving truck is booked for June, and the offer letter from a new job in Tampa is on the fridge of your ranch in Westbrook. You like the house, and you'd rather keep it than sell.

That's usually when clients ask me how many FHA loans they can have. An FHA loan is usually limited to one at a time, and the exceptions are written narrowly, so the details of your move matter.

Can you have two FHA loans at the same time?

HUD won't insure more than one property as a principal residence for any borrower, except in the cases below. A principal residence is the home you live in for most of the year, and you can only have one. HUD expects at least one borrower to live there within 60 days of signing, with plans to stay a year or more.

HUD also won't insure a loan that looks designed to collect rentals, even if it would be your only FHA loan. Moving out later doesn't force you to sell or refinance the first house. While that loan is still open, though, a second FHA loan has to fit one of HUD's four exceptions.

Can you keep your FHA house when you move for work?

Yes, if the move is for an employment-related reason and your new home is more than 100 miles from the one you live in now. A job in Tampa clears that distance easily from Westbrook. A move for retirement doesn't meet the employment test as HUD writes it, so in that case I look at selling first or a different loan for the Florida home.

If you move back to the original area later, you don't have to move back into the first house. You can buy a new home with FHA, as long as the move away met both tests. I ask for the offer letter or transfer paperwork early, because the lender will want it in the file.

What if your family outgrows your FHA home?

HUD allows a second FHA loan when you've added legal dependents and the house no longer fits your family's needs. The loan-to-value ratio on the current home also has to be 75% or less, based on your balance and a current appraisal. In plain terms, you need at least 25% equity, or you pay the balance down to that point.

The appraisal decides this one. A tax assessment or a market estimate won't count, so I line up a current appraisal on the first house before we look at listings.

What if a co-owner stays in the house?

HUD allows another FHA loan when you're leaving a home you own jointly, with no plan to return, and an existing co-borrower stays there. That covers clients going their separate ways, and it can cover siblings who bought a house together. You can buy your own place with FHA while your name is still on the first loan.

That first payment still counts in your file. I look at how it affects what you qualify for before you start shopping.

Can you co-sign a family member's FHA loan?

Yes. If you have an FHA loan on your own home, you can be a non-occupying co-borrower on another FHA loan, and someone who co-borrowed that way can still get an FHA loan on their own principal residence. Non-occupying co-borrowers must be U.S. citizens or have their principal residence in the U.S.

The financing limit changes when someone on the loan won't live there. HUD caps those loans at 75% of value, or up to 96.5% when the borrowers are family members. The higher limit doesn't apply on a two to four unit home or on certain sales between family members. You're fully responsible for the debt as a co-borrower, which my post on a non-occupant co-borrower explains.

What about a second home or a rental with FHA?

FHA doesn't insure investment properties for individual buyers. A second home is allowed only with FHA's written approval, and only when commuting creates a real hardship and there's no affordable rental within 100 miles of your job. Approved second homes top out at 85% of value, and a vacation home doesn't qualify.

One FHA loan can buy a two to four unit home you live in, with the other units rented. My post on using VA or FHA for an investment property covers that route.

Can you use FHA again after you sell or refinance?

Yes. HUD's limit applies while you have an open FHA loan on your principal residence. Once that loan is paid off through a sale or a refinance into another loan type, the next FHA purchase only has to meet the usual rules, and the home still has to be where you'll live.

As a mortgage broker, I check your situation against HUD's exceptions and compare FHA with other loans across lenders. Residential home loans in Maine and Florida. DSCR loans in 37 states. If the move is south, my Maine to Florida relocation page covers the timing.

FAQ

Can you have two FHA loans at once?

You can have two FHA loans at once only if you meet one of HUD's four exceptions. Those are a job-related move of more than 100 miles, a growing family with at least 25% equity in your current home, leaving a jointly owned home to a co-borrower, or being a non-occupying co-borrower.

How far do you have to move to get a second FHA loan?

For a second FHA loan under HUD's relocation exception, your new home has to be more than 100 miles from your current principal residence. The move also has to be for an employment-related reason.

Can you rent out your FHA house and buy another house with FHA?

You can rent out a house with an FHA loan once you've lived there as HUD requires, but a second FHA loan needs one of HUD's exceptions. One example is a job-related move of more than 100 miles.

Can you be a co-borrower on more than one FHA loan?

Yes, a borrower with an FHA loan on their own principal residence can be a non-occupying co-borrower on other FHA loans. When a family member co-borrows, the loan can go up to 96.5% of value on a one-unit home.

Can you use an FHA loan to buy a second home in Florida?

An FHA loan in Florida or any other state can't buy a vacation home. A secondary residence needs FHA's written approval based on a commuting hardship, and it's capped at 85% of value.

Can you get another FHA loan after selling your house?

Yes, once your FHA loan is paid off through a sale, HUD's limit on multiple FHA loans no longer applies to you. The new home still has to be your principal residence, and you still have to qualify.

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Picture that June move a year from now, the Tampa job settled and the Westbrook ranch still in your name. Wondering whether your move fits HUD's rules? Send me where you're moving, the reason for the move and your current FHA loan statement by email at travis@travis.mortgage or on my contact page. I'll check which exception applies, if any, and which loan fits the new house.

Started in 2004 and I'm still here.