Exception situations in which FHA does not object to borrowers obtaining multiple FHA-insured mortgages.

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Relocation:

A borrower may be eligible to obtain another FHA-insured mortgage without being required to sell an existing property covered by an FHA-insured mortgage if the borrower is

• relocating, and
• establishing residency in an area outside reasonable commuting distance from his/her current principal residence.

If the borrower subsequently returns to the area where he/she owns a property with an FHA-insured mortgage, he/she is not required to re-establish primary residency in that property in order to be eligible for another FHA-insured mortgage.

Note: The relocation need not be employer-mandated to qualify for this exception.
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Increase in family size:

A borrower may be eligible for another home with an FHA-insured mortgage if the number of his/her legal dependents increases to the point that the present house no longer meets the family's needs. The borrower must provide satisfactory evidence

• of the increase in dependents and the property's failure to meet family needs, and
• that the Loan-To-Value (LTV) ratio equals 75% or less, based on the outstanding mortgage balance and a current appraisal. If not, the borrower must pay the loan down to 75% LTV or less.

Note: A current residential appraisal must be used to determine LTV compliance. Tax assessments and market analyses by real estate brokers are not acceptable proof of LTV compliance.
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Vacating a jointly owned property:

A borrower may be eligible for another FHA-insured mortgage if he/she is vacating a residence that will remain occupied by a coborrower.

Example: A couple is divorcing and the vacating ex-spouse will purchase a new home.
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Non-occupying coborrower:

A borrower may be qualified for an FHA-insured mortgage on his/her own principal residence even if he/she is a non-occupying coborrower with a joint interest in a property being purchased by other family members as their principal residence with an FHAinsured mortgage.

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