Currently my rental is FHA. I lived in that house for 6 years prior to renting it then moved in my wife house. For the past year, I have been renting it.
Also we have a purchase and sale and need to go FHA because of DTI.
I was reading about the FHA 25% equity rule. It states that if my existing property has at least 25% equity and it is a rental, I can get another FHA loan.
Can someone confirm that?
Exactly same situation. If you relocate and rent your primary residence I believe you need 25% equity in that property.
Starting Score: 590I was just told by another mortgage company that this is the case.
If I can show that the property is rented and that the rental property has at least 25% (it has 29%) equity, then i can qualify for a second FHA.
I sent this to the BOA guy and he came back with my commute is considered ok so I don't qualify...I did not even ask about relocation !!! Frustrated right now.
@StartingOver10 wrote:
@CS800 wrote:I was just told by another mortgage company that this is the case.
If I can show that the property is rented and that the rental property has at least 25% (it has 29%) equity, then i can qualify for a second FHA.
I sent this to the BOA guy and he came back with my commute is considered ok so I don't qualify...I did not even ask about relocation !!! Frustrated right now.
CS800, find someone besides BOA. They are conservative - as most of the big box banks are right now. Find a correspondent lender - let her/him do the loan and sell it back to a big box bank. You will get a better rate (usually) and lower costs and less hassel for the loan itself. Correspondent lenders are mortgage bankers - they originate and fund their own loans and then sell the loan. You know who the ulitmate buyer is usually fairly quickly - even at the closing table. They have many loan resources so they can usually find someone to fit your situation.
I wish I knew this before but we are so deep with them right now (title went to them, they are doing the verification, already did appraisal etc..just not very responsive). If we were at the begining, I would switch in a heartbeat.
@StartingOver10 wrote:My concern for you is this: your LO already stated that you need to get a conventional loan rather than an FHA loan because you don't meet BOAs requirements for the second FHA loan. Yet they are still processing your file. Are you going conventional now? Or trying for the FHA loan anyway? If conventional, then you should be okay with what you posted. If FHA I am concerned they will come back the last minute and tell you no.
Already refinancing the rental house to a conventional hopefully we close this week.
Oh, good, you have taken care of the issue already 