Can you get an fha loan for a second home?

FHA-secong-homeThe FHA loan program only requires a down payment of 3.5%.

The home seller is permitted by the Federal Housing Administration to pay a large percentage of the home buyer's closing and prepaid costs . . . and the entire down payment and all costs can be "gifted" by an eligible donor.

The FHA home loan program requires the borrower to occupy the home (or FHA approved condominium) within 60 Days of signing the security instrument (deed) and intend to continue occupancy for at least one year. The 203(k) loan program have separate occupancy requirements.

FHA program is intended for owner occupants and not available for acquiring investment properties; even if the home will be the only one financed with an FHA mortgage.

There a few exceptions to the one mortgage rule:


A Borrower may be eligible to obtain another FHA-insured Mortgage without being required to sell an existing Property covered by an FHA-insured Mortgage if the Borrower is:

- relocating or has relocated for an employment-related reason; and

- establishing or has established a new Principal Residence in an area more than 100 miles from the Borrower’s current Principal Residence.

If the Borrower moves back to the original area, the Borrower is not required to live in the original house and may obtain a new FHA-insured Mortgage on a new Principal Residence, provided the relocation meets the two requirements above. Source: FHA Single Family Housing Policy Handbook

Increase in family size

A Borrower may be eligible for another house with an FHA-insured Mortgage if the Borrower provides satisfactory evidence that:

the Borrower has had an increase in legal dependents and the Property now fails to meet family needs; and the Loan-to-Value (LTV) ratio on the current Principal Residence is equal to or less than 75% or is paid down to that amount, based on the outstanding Mortgage balance and a current residential appraisal.

Vacating a jointly-owned Property

A Borrower may be eligible for another FHA-insured Mortgage if the Borrower is vacating (with no intent to return) the Principal Residence which will remain occupied by an existing co-Borrower.

Non-occupying co-Borrower

A non-occupying co-Borrower on an existing FHA-insured Mortgage may qualify for an FHA-insured Mortgage on a new Property to be their own Principal Residence.