fha loan for second home

Buying a second house when you already own one isn’t something FHA loans typically allow, but there can be 2nd FHA loan exceptions.

At the Wendy Thompson Lending Team, we can help you get a second FHA loan as a second-time homebuyer. Here’s what you must know.

Can You Get an FHA Loan If You’re Not a First-Time Homebuyer?

An FHA mortgage is a government-backed home loan with flexible guidelines. It has many benefits for borrowers:

  • FHA loans have low down payment requirements starting at just 3.5%
  • Borrowers only need a 580 credit score to qualify
  • The FHA allows debt-to-income ratios of up to 50% in some cases
  • The mortgage insurance premiums are low and affordable

It’s a great option for borrowers with less-than-perfect credit who can handle a mortgage loan. 

But I know what you’re thinking…

Can I get an FHA loan if I already own a home?

The FHA loan has a first-time homebuyer reputation, but it’s not only for first-time buyers. Anyone who meets the FHA requirements may use an FHA loan to buy a home.

Since the FHA loan requirements are relaxed, most people find that it’s a great way to buy their first home, but it can be used on any home — even a second home if you already own one.

4 Reasons You May Qualify for an FHA Loan on a Second Property

Generally, FHA loans are only for borrowers who will use the home as their primary residence. But FHA guidelines allow for some exceptions. 

For example, you might be thinking, “I have an FHA loan and want to buy another house.” 

You could use a conventional loan, but here’s when you could qualify for an FHA loan as a second-time homebuyer:

1. You’re not living in the home you own

Sometimes you may own a home but not live in it. For example, suppose you went through a divorce and moved out of the house.

In that case, the FHA could make an exception and allow you to get a second FHA loan.

2. You outgrew your existing home

If your family grew and your current home doesn’t suit your family’s needs anymore, you may be eligible for one of the FHA 2nd loan exceptions. 

This is on a case-by-case basis, and you must prove your existing home no longer suits your needs.

3. You relocated because of your job

If you relocated because of your job and didn’t want to sell your existing home, you may qualify for an FHA loan as a second-time homebuyer. 

Generally, the home must be at least 100 miles away from your current home — that’s the FHA 100 mile rule.

4. Other personal reasons

Other FHA hardship exemptions exist, but they’re generally handled on a case-by-case basis. If you think you have a reason to qualify for a second FHA loan, write to the FHA Homeownership Center.

Tell them about your situation and see if you’d be eligible for a second FHA loan. 

At Wendy Thompson Lending Team, we specialize in FHA loans — our professionals can help you get into the home you need.

fha loan for second home

Who Qualifies as an FHA Loan Second-Time Homebuyer?

You are an FHA loan second-time homebuyer if you currently own a home with an FHA loan and want to buy another house using an FHA loan. 

Just like first-time homebuyers, borrowers must meet second home mortgage requirements to qualify for an FHA loan. Typically, this includes credit scores and down payment amounts. 

But there’s good news: 

You aren’t penalized for being a second-time homebuyer when pursuing an FHA loan. You can get a second chance to buy your forever home.

FHA Loan Requirements for a Second-Time Borrower

Besides meeting the requirements for an FHA loan for a second-time homebuyer, borrowers must have:

  • Minimum 580 credit score
  • No recent bankruptcies or foreclosures
  • Debt-to-income ratio of less than 43% 
  • Stable income and employment
  • Proof you qualify for the exception to have a 2nd FHA loan
  • Proof you can afford both loans if you’re responsible for the first loan

4 Simple Steps to Apply for an FHA Loan

At the Wendy Thompson Lending Team, we make it easy to apply for an FHA loan using these steps:

  1. Check your credit: Check your free credit report for defaulted debts. If you have collections or other credit issues, see what you can do about clearing them up before applying for the FHA loan.
  2. Pay your balances down: Overall, you shouldn’t have over 30% of any credit line outstanding. This helps your credit score increase, and it increases your chance of mortgage approval.
  3. Complete an application: At the Wendy Thompson Lending Team, we make it easy to pre-qualify for a mortgage and are always here if you have any questions.
  4. Provide your supporting documentation: You’ll need to give proof of your income and assets as part of the loan approval process.

Then comes the hard part: waiting. Your lender will order the appraisal (to ensure the home’s value) and title work (to make sure there aren’t any liens or encumbrances). 

Once that’s done, and your loan is approved, you’ll get a closing date. It typically takes about 30 to 45 days.

Closing is when you’ll make your down payment and take care of other costs and take possession of your new home.

The Tactical FHA Loan Blueprint

How to Find Your Dream Home with a Low Down Payment and Low Closing Costs

If you already have a home with FHA financing and are looking at a second home, you can still use an FHA loan under some circumstances.

And we're here to help. Let the Wendy Thompson Lending Team support you on your journey to an FHA loan for a second-time homebuyer.

Our team is professional, effective, and accurate. We’re dedicated to helping you secure the financing you need to buy your home. Contact us today!

Deciding on the right FHA lender is the most important decision you will make. Choosing the wrong lender can result in you losing your dream home or costing you hundreds of thousands of dollars in more interest over the life of your mortgage.  

Don’t make that mistake, contact the Wendy Thompson Lending Team today!  

You can start the process by clicking the yellow 'See if I'm Eligible' button on the right side bar under the 'Start your quote for a Home Loan'  or call Wendy’s Team directly at (901) 250-2294, to get started on living the American Dream in the home of your Dreams!