Can I still get a FHA loan (3.5% down payment) for a primary residence if I already have a residential loan for an investment property that already has 20% down?

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Great question! I want to assume no, but I will look it up for you. The issue here is that you have the mortgage as residential and not as investment. This pretty much strikes your first time home buyer options, unless you can prove that you never resided on the property, that it was for investment purposes, and that the residential mortgage does not have a provision stating that it is for residential purposes only, or a similar wording with like meaning.

There are some residential mortgages that are flexible in that the term residential only means the property is to be used for residents and not a business, ie similar to zoning and sometimes used to exclude contract zoning. The term residential on this tire then means that the investment itself can be used to generate residents that are non-owners as a rental business. Meaning as a property to be used as an instrument of a rental business but cannot be used as, say, the rental management office or to conduct some other business.

If your lucky that the mortgage is that type of residential, and not the type requiring that the purchaser has to remain living on the property for a specific period of time, then you may have an exception for FHA. Again, I have to look it up.

Thank you so much for the detailed explanation! So you think it depends on the bank and what they’re comfortable putting in the docs language?

Per my loan officer the answer is yes. The FHA rules on distance apply to FHA loans not conventional.

For example I purchased my first condo on FHA. I then refinanced to a conventional. I am now eligible to buy another FHA home even if it were to be right next door.

Hope that helps, and your loan person should be on top of figuring all of this out for you, and if not fire them and get another. They get 1% of your loan amount so they can work for you.

The answer is yes. I am sending you a dm.

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