How many FHA loans can you have?
Quick insights
- Typically, borrowers have one active FHA loan at a time. In limited situations, the FHA may allow a second FHA loan if you meet specific requirements.
- Certain exemptions, such as relocating for work or experiencing major life changes, may allow you to have two FHA loans at once.
- Without an exemption, you may need to sell your first home, refinance to a different loan type or pay off your current FHA loan before getting another one.
Homeowners can usually have one active FHA loan at a time, but there’s no restriction on how many you can have over the years. Under specific qualifying circumstances, typically called exemptions, borrowers may be eligible to have two active FHA loans at once.
Can you have two FHA loans at once?
Typically, borrowers have only one active FHA loan at a time. In limited situations, the FHA may allow a second FHA loan if you meet specific requirements. FHA loans are designed to help people purchase a primary residence, not investment properties. This limits many borrowers to one active FHA loan at a time. However, there are several exemptions that allow for someone to have two FHA loans simultaneously. Specific eligibility requirements apply.
Exemptions for multiple FHA loans
Although borrowers are typically limited to one FHA loan at a time, the FHA allows several exemptions that may make it possible to have two active FHA loans.
Your household has outgrown your current home
If your current home no longer provides enough space because your household has expanded, you may qualify for a second FHA loan.
Example: You purchased a two-bedroom home as a newlywed couple but now have three children and need a larger home.
You’re relocating for work
If you are moving for a new job, you might qualify for a second FHA loan. The FHA could allow you to keep your current FHA home and buy a new one. To do this, your new job must be too far for a normal drive. Specifically, your new home must be at least 100 miles farther from your old home than your past commute.
Example: You own a home in Indianapolis with an FHA loan. You accept a new job in Chicago. Your new workplace is more than 100 miles away, so you may qualify for another FHA loan. This allows you to buy a home closer to your new job while keeping your first home.
You’re going through a divorce or legal separation
If one spouse remains in the current home with the existing FHA loan, the other spouse may be able to obtain a new FHA loan for another primary residence if they otherwise qualify.
Example: After a divorce, your former spouse keeps the marital home while you purchase your own home.
You’re a co-borrower on someone else’s FHA loan
If you are currently a non-occupying co-borrower on an FHA loan, you may still qualify for your own FHA loan.
Example: You were a non-occupying co-borrower on your parents’ FHA mortgage to help them qualify, but now you’re ready to buy your first home.
How you may qualify for more than one FHA loan
If you believe you qualify for one of the FHA exceptions, here’s what you will likely need to do:
1. Confirm you meet an FHA exception
You will need to demonstrate that your situation qualifies under FHA guidelines, such as relocating for work, a larger household or another approved exception.
2. Meet your lender’s financial requirements
Most FHA mortgage lenders look for a certain credit score that varies by lender. They will also check your debt-to-income ratio (DTI), which would include your existing FHA loan and mortgage insurance premium (MIP).
Because you already have one FHA loan, lenders may be strict about your DTI. Your new loan will add two new costs: upfront mortgage insurance (UFMIP) and MIP. Lenders add both of these fees to your DTI.
If you keep your first home, these extra costs might push your DTI too high and cause your new loan to be denied. FHA mortgage insurance may be required for a long period of time, and the duration depends on your loan terms and down payment.
3. Meet FHA down payment requirements
The FHA sets minimum guidelines, such as a 3.5% down payment, but lenders may require higher credit scores or larger down payments.
4. Clear the CAIVRS database
Mortgage lenders will check the Credit Alert Verification Reporting System (CAIVRS) if you apply for an FHA loan. This check confirms if you have delinquent federal debt or claims on previous government-backed loans.
5. Show rental income if keeping your current home
If you keep your current home, you might decide to rent it out. Some lenders may be able to consider documented rental income, subject to program rules and underwriting requirements.
This extra income helps cover your current mortgage payment. As a result, it lowers your debt-to-income ratio, or DTI. Let's explore how renting your first home can help you qualify for your new loan.
Before you begin shopping for a home, consider getting preapproved for a mortgage to estimate how much you may be able to borrow.
Alternatives to having two FHA loans
If a second FHA loan isn’t possible, you may still have options:
- Refinancing from an FHA to a conventional loan can remove FHA restrictions and mortgage insurance, potentially freeing you to buy again.
- Conventional loans may be a better loan option if you have strong credit, assets and fewer liabilities.
- VA loans offer flexible terms and often have no down payment requirements for qualified applicants.
In summary
You can generally only have one active FHA loan at a time, but there’s no lifetime limit on using FHA financing. With the right qualifying circumstances, you may be able to hold two FHA loans temporarily.
Chase offers FHA loans and a range of mortgage products. If you’re unsure where you stand, speaking with a Home Lending Advisor can help you understand your options and plan for the journey ahead.
