December 3, 2021

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Buying A Second Home?

FHA Mortgage Loan

There is a myth about FHA home loans you might even believe yourself. Some believe that FHA home loans, with their low 3.5% down payment, are set aside strictly for first-time homebuyers who need help via a lower down payment than many conventional loans might require.

What is the reality about the notion that FHA home loans are for first-time buyers only? FHA mortgages are NOT restricted to those who have never owned a home before. They are also not restricted to low or moderate-income applicants.

One reason for these prevailing myths about FHA mortgages? Likely that many state or local first-time homebuyer programs may be commonly used with government-backed mortgage programs like the USDA and FHA home loan programs. 

By association, some might assume that the loan is intended only for a first-time borrower.

Another reason for the myth? Some assume the FHA loan program is similar to the need-based USDA mortgage loan program. Both are government-backed loan programs, it’s true.

But that is where many similarities end. FHA mortgages do not have income caps or require you to buy homes in a targeted area in order to qualify. 

Some USDA mortgages may feature one or both.

So is it possible to get an FHA mortgage to buy a second home? The short answer is that it depends on whether or not you have an existing FHA home loan. 

FHA loans generally are approved for one residence at a time though some qualifying borrowers may be able to apply for another FHA mortgage if they have an increase in family size or a job requirement that forces a relocation.

Such instances are handled on a case-by-case basis so you’ll need to discuss your specific circumstances with a participating FHA lender.

You may qualify to purchase a second home with an FHA mortgage if you are planning to use that second home as your primary residence. You will need to qualify with your income, credit scores, and debt ratios so keep in mind that any existing mortgage payments will be counted in those debt-to-income ratios calculations.

A second home purchased with an FHA mortgage must be primarily residential, not an investment property (you are free to rent out unused units in the home as long as you live in one of them yourself), and is not intended for a transient-occupancy operation like a bed and breakfast or Air b-n-b.

A second home in this case implies (correctly) a full-time residential situation. FHA mortgages cannot be used to purchase VACATION homes, which would not qualify under the occupancy rules in the FHA lender’s handbook, HUD 4000.1.

It’s possible to own two homes at once with an FHA mortgage, but you’ll need to use the home you previously owned as something other than your primary residence and move into the property you buy with an FHA mortgage as your home.

Occupancy is required as a condition of FHA loan approval and you’ll need to certify in writing that you plan to use the new home as your home address.

Learn About the Path to Homeownership
Take the guesswork out of buying and owning a home. Once you know where you want to go, we’ll get you there in 9 steps.

Step 1: How Much Can You Afford?
Step 2: Know Your Homebuyer Rights
Step 3: Basic Mortgage Terminology
Step 4: Shopping for a Mortgage
Step 5: Shopping for Your Home
Step 6: Making an Offer to the Seller
Step 7: Getting a Home Inspection
Step 8: Homeowner’s Insurance
Step 9: What to Expect at Closing

Joe Wallace - Staff Writer

By Joe Wallace

November 2, 2021

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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