FHA Home Loans in North Carolina are designed for owner occupied borrowers only – meaning the program is designed to allow folks to only have one FHA Home Loan at a time. It’s a great program for First Time Home Buyers, because all of the money needed can come from a Gift or from the NCHFA 3% grant program. Because FHA Home Loans insure the Bank against default, they carry some of the best mortgage rates available.
Often times folks will move to North Carolina with a new job. If you decided to rent out the home you left behind – you might not have a ton of cash to put down on a new home in North Carolina.
Great News! You will likely qualify for a FHA Home Loan in North Carolina – but you might also qualify for a USDA Home Loan or a VA Home Loan – all of the Government programs are pretty much written the same way. So you would need to meet one of these four requirements to buy a “second” home in North Carolina using the FHA Home Loan Program.
1. Relocations: FHA says that “if the borrower is relocating and re-establishing residency in another area not within reasonable commuting distance from the current principal residence.” This does not mean that you will only qualify to buy another house if the Employer paid your closing costs. You can buy another house in North Carolina, while renting your original home that has a FHA loan on it out – as long as we can prove that you moved here with a “job related” relocation.
2. If your Family Size Increases!: FHA says you can get another FHA Home Loan in North Carolina (without paying the first one off) “if the number of legal dependents increases to the point that the present house no longer meets the family’s needs.” A new appraisal will need to be ordered and the existing FHA mortgage must be below 70% of the appraised value.
3. Vacating a Jointly-Owned Property: If you are getting a divorce (for instance) and your spouse will continue to occupy the existing property that has an FHA mortgage on it – FHA says you can get another FHA loan. Because of their common sense underwriting guidelines, this could be a big boost in a difficult situation! Remember that this same issue is viewed by VA Home Loan Underwriters exactly the same way.
4. “Kiddie Condos”: Kiddie Condos are not just for children, and they are not limited to Condominiums – it’s just a term commonly used in the mortgage industry to describe a Non-Occupying Co-Borrower. FHA says, “a non-occupying co-borrower on property being purchased with an FHA-insured mortgage as a prncipal residence by other family members, may have a joint interest in that property as well as in a principal residence of their own with a FHA-insured mortgage). This is the only FHA Home Loan guideline that does not translate over to USDA Home Loans and VA Home Loans. USDA and VA do not offer Non-owner Occupying Co-Borrower opportunities.
Here’s something else that might help. If you purchased a home with a FHA mortgage, then moved out, and are renting it (so now it’s Investment property) you might be eligible for a Streamline Refinance. Not very many lenders offer the Streamline Refinance for Non-Owner Occupied properties, but we can do those. Although it’s difficult to do this on a USDA Home Loan, if you have a VA Loan that you originally purchased as a owner occupied property and you received PCS Orders and had to rent the home out… we can probably help you refinance without an appraisal too!