The rumor that FHA mortgages are only for 1st time homebuyers has circulated for many years. I have heard it since I first began in the mortgage business many years ago.
Let me confirm: It is a BAD RUMOR. Total misinformation.
Anyone can get an FHA mortgage loan – anyone who qualifies of course. There are no income limits either. FHA does have limitations on maximum mortgage amounts that vary by counties in the various states, and the buyer must live in the home. But that’s about it for general exclusions and limitations.
Most borrowers who want to purchase a property the 2nd or 3rd time will NOT use FHA because they might have access to a greater down payment and therefore will choose a different type of mortgage. This is probably where the misinformation originates. Merely because the borrower chooses not to use FHA does not mean the option wasn’t there.
FHA does have advantages for first-time homebuyers over conventional mortgage loans. Many buyers cannot meet the strict requirements for conventional loans that exist today.
FHA has lower down payment requirements and less stringent credit requirements. Since late 2008, there are many more buyers using FHA for their move-up financing.
There are just as many homeowners who are using FHA to refinance their conventional mortgages. Why? Because FHA offers better, cheaper alternatives for refinancing for a lot of people. In many cases, the homeowner could not use conventional refinancing at all due to low home value or lower credit scores.
Ask any questions you might have about FHA. You can comment here, email me, or call.
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