Currently trying to get another FHA. From what I was told, I needed to refinance my rental property to a conventional in order to get another FHA.
In doing my research, I’m using the relocation provision to get another FHA. First they told me that I was within reasonable commuting distance. Then I did an analysis of that and sent it to the bank. Now he came back and said ‘That property is currently an investment property which excludes it from the exception’
After doing some more research, I came across this:
‘For the borrower who wants to use the option to upgrade to a larger home, the first home must have a loan-to-value of 75 percent or less. The borrower will need to obtain an appraisal and pay the mortgage down to meet the 75 percent limit if the loan to value is higher. To qualify for the second FHA loan, the borrower may have to have a signed rental agreement on the first home and show cash reserves to pay the payment for 6 to 12 months on the first mortgage if he loses the renter.’
In doing my refinance, the appraisal + field reivew came back at $ 245K. I owe $ 169K which put my equity over 25%. The bank already has my lease from my tennant (that I forwarded to them) since they are using part of my rental income as part of my DTI anyway.I have enough reserves for about 7-8 months to cover this.
I feel like the bank is screwing with me and they don’t know the rules. They most likely saw my relocation analysis and said ‘crap’ what else can we use against him.
Any help much appreciated. Thanks