FHA Occupancy Rules

Generally, a FHA mortgage applicant cannot get more than one FHA loan. That means at least one FHA mortgage applicant on the loan must be occupying the property as their primary residence. In practical terms this means that a parent with an FHA insured loan can be the co-FHA mortgage applicant on an FHA loan for their child, but their child (the primary FHA mortgage applicant) must be using that house as their primary home. They must establish it as their primary home within 60 days of signing their final security agreement and stay there for at least one year.

In order to qualify for more than one FHA loan the FHA mortgage applicant must meet at least one of the following criteria:

  1. Be moving or establishing residency in another location (such as when moving for a job).
  2. The number of legal dependents has increased to the point that the property is no longer suitable, such as when there are many children or when disabled or elderly family members must be taken in. In this case, the loan to value ratio must still be paid down to 75% (generally) before the second FHA loan will be approved.
    The co-FHA mortgage applicant will be occupying the property as their primary residence (this happens sometimes in divorce situations).
    A co-FHA mortgage applicant (such as a parent) may have an interest in that property as well as their own.