FHA Loans on Second Properties
In most cases, FHA 203(b) loan borrowers can only get a loan on an owner-occupied primary residence. Generally, vacation and investment homes are not eligible for FHA financing. However, there are certain situations in which HUD allows borrowers to get an FHA loan for a second property.
FHA Loans for Divorced Co-Owners and FHA Loan Cosigners
One situation in which a borrower may get an FHA loan for a second home is if they are divorced, and currently co-own a home with their ex-spouse, but do not occupy it. In addition, if you’ve co-signed a family member’s FHA loan, that won’t prevent you from getting an FHA loan for a primary residence or a HUD-approved second home.
Second Homes for Growing Families
If your family is growing, and you can no longer fit in your original home, you may be approved for a second home to accommodate additional family members. However, family members living in the second home must be your legal dependents. HUD-approved second homes for growing families are approved on an individual basis, and borrowers often need a certain amount of equity in their first home in order to be approved.
Purchasing a Second Home for Relocation
Relocation is another hardship that HUD will consider when deciding whether to approve a request for a second home loan. The relocation does not have to be work related. For example, you may want to relocate to take care of an ill or elderly family member. In most cases, the two homes must be a reasonable distance apart (often at least 50 miles) in order for the second home to qualify for FHA financing. You may also need to provide evidence to the FHA that you cannot afford to rent a home in the area in order to be approved for a second mortgage.