Can I Have a VA & FHA Loan?

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Yes, homeowners may have a loan insured by the Federal Housing Administration (FHA) on one house and a Veteran Affairs (VA) loan on another house at the same time. It’s even possible to have two FHA and VA loans at the same time. How and when you obtain each loan may cause some issues with lenders, but generally this is permitted. Understanding how these loans work is important when trying to use both financing types at the same time.

FHA Basics

FHA insures loans closed by approved lenders using FHA’s guidelines. As of April 2011, FHA allows homeowners a mortgage for up to 96.5 percent of the lesser of the purchase price or appraised value of a home. If the loan is to refinance a home owned for more than 12 months, then lenders only use the appraised value. FHA lends on one- to four-unit residential homes used by the borrower as his primary residence. Owners of two-, three- and four-unit homes may rent out the other units, but the borrower must live in one of them.

VA Basics

VA provides loan guarantees to banks that give mortgage loans to eligible veterans. VA does not require any down payment, but does require the homeowner occupy the home within 60 days of closing. If the service member is deployed, her spouse may occupy the home within 60 days and still qualify for the loan. VA does not care if the homeowners already own a home with a mortgage insured by FHA.

Occupancy

Both VA and FHA require the borrower occupy the home. Because of this, the borrower could not buy two homes at the same time and finance one under each program. A borrower can only call one home the primary residence. A borrower could purchase a home using FHA and then later move and purchase a new home using VA financing, or vice-versa. The homeowner must occupy the home for a reasonable amount of time (more than a few weeks or months) to satisfy the occupancy requirement.

Having Multiple FHA or VA loans

FHA typically only insures one loan at a time for a borrower, but there are exceptions. If a young couple purchases a home with an FHA loan and then the family grows and needs a larger house, they could get a new FHA loan without selling the old house or refinancing the FHA loan. VA provides a guarantee, if the veteran does not use all of the guarantee amount, then he can use the remaining guarantee to purchase another house when she moves. These are complex financing situations, and the homeowner should use an experienced FHA or VA lender when financing multiple loans.

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