What is the 100‑mile rule for FHA loan relocation in Kentucky?

You must be relocating for employment reasons to an area more than 100 miles from your current Kentucky principal residence. You can retain or rent your existing home while establishing a new primary residence in the distant area.

What LTV ratio is required for the family size increase exception?

Your existing FHA loan must have a loan‑to‑value ratio of 75% or less based on a current residential appraisal and outstanding mortgage balance. You must also provide documentation of increased legal dependents.

What documentation is needed for two FHA loans in Kentucky?

Required documentation includes: employment transfer letters or job offers, current appraisal for LTV verification, birth/adoption certificates for family size increase, divorce decrees for joint ownership situations, and proof of income and assets for both properties.

What are alternatives if I don't qualify for two FHA loans?

Options include: refinancing your first FHA loan to conventional to free up FHA eligibility, using VA loans (for veterans), USDA loans (for rural areas), Kentucky Housing Corporation programs, or selling your existing FHA‑financed property.

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Can a person have more than one Kentucky FHA loan?

Q: Can you have two FHA loans at the same time in Kentucky?

Yes, but only under four tightly‑defined HUD exceptions: 1) Employment‑related relocation more than 100 miles away, 2) Increase in family size with existing loan at 75% LTV or less, 3) Vacating a jointly‑owned property, and 4) Non‑occupying co‑borrowers getting their own residence.

- June 26, 2025

Can You Have Two Kentucky FHA Loans at One Time?

FHA will not insure more than one Property as a Principal Residence for any Borrower, except as noted below. FHA will not insure a Mortgage if it is determined that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining Investment Properties, even if the Property to be insured will be the only one owned using FHA mortgage insurance.

Properties previously acquired as Investment Properties are not subject to these restrictions.

Listed below are the only circumstances in which a Borrower with an existing FHA-insured Mortgage for a Principal Residence may obtain an additional FHA-insured Mortgage on a new Principal Residence:

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 or has relocated for an employment-related reason; and
- establishing or has established a new Principal Residence in an area more than 100 miles from the Borrower’s current Principal Residence.

If the Borrower moves back to the original area, the Borrower is not required to live in the original house and may obtain a new FHA-insured Mortgage on a new Principal Residence provided the relocation meets the two requirements above.

INCREASE IN FAMILY SIZE - A Borrower may be eligible for another house with an FHA-insured Mortgage if the Borrower provides satisfactory evidence that:
- the Borrower has had an increase in legal dependents and the Property now fails to meet family needs; and
- the Loan-to-Value (LTV) ratio on the current Principal Residence is equal to or less than 75% or is paid down to that amount, based on the outstanding Mortgage balance and a current residential appraisal.

VACATING A JOINTLY-OWNED PROPERTY - A Borrower may be eligible for another FHA-insured Mortgage if the Borrower is vacating (with no intent to return) the Principal Residence which will remain occupied by an existing co-Borrower.

NON-OCCUPYING CO-BORROWER - A non-occupying co-Borrower on an existing FHA-insured Mortgage may qualify for an FHA-insured Mortgage on a new Property to be their own Principal Residence.

For additional information see Handbook 4000.1 II.A.1.b.iii.(A) at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Can You Have Two Kentucky FHA Loans at One Time? Can You Have Two FHA Loans at the Same Time in Kentucky? Multiple FHA loans at the same time?

Can You Have Two FHA Loans at the Same Time in Kentucky? (2025 Guide)

🎯Quick Answer

Yes—but only under four tightly‑defined HUD exceptions. Below we unpack each scenario, outline documentation you'll need, and offer Kentucky‑specific strategies if you don't qualify.

Four Ways to Have Two FHA Loans in Kentucky

Interactive guide showing the four HUD-approved exceptions for having two FHA loans simultaneously in Kentucky.

Why the FHA Usually Caps You at One Loan

FHA loans are engineered to encourage owner‑occupied, primary‑residence purchases. Multiple simultaneous FHA loans would effectively convert the program into a low‑down‑payment tool for investment property accumulation—something HUD explicitly forbids (Handbook 4000.1 § II.A.1.b.iii(A)).

This policy ensures that FHA's mission remains focused on helping Americans achieve homeownership for their primary residence, not building real estate portfolios. The program's low down payment requirements and flexible credit guidelines are specifically designed for owner-occupants who will live in the home.

Important: Attempting to circumvent these rules can result in loan fraud charges and immediate loan acceleration. Always work with a licensed Kentucky mortgage professional to ensure compliance.

The Four HUD Exceptions That Permit a Second FHA Loan

#	Exception	Core Requirements
1	Employment‑Related Relocation ("100‑Mile Rule")	Job transfer or new employment more than 100 miles from current home New Kentucky primary residence must be established in the distant area Existing home can be retained or rented Must be employment-related (not personal choice)
2	Increase in Family Size	Documented increase in legal dependents makes current home inadequate Existing FHA loan is ≤ 75% LTV or paid down to that level Current residential appraisal required Birth certificates, adoption papers, or legal guardianship documents
3	Vacating a Jointly‑Owned Property	Borrower permanently leaves home still occupied by co‑borrower Common in divorce or separation situations Must demonstrate no intent to return Co-borrower continues occupancy as primary residence
4	Non‑Occupying Co‑Borrower	Previously co‑signed someone else's FHA loan without occupying Now seeking own Kentucky primary residence Must meet all standard FHA qualification requirements Common with parent co-signers helping adult children

How to Prove You Qualify (Kentucky Lender Checklist)

1Gather Documentation

Gather relocation or family‑size documentation. Employment offer letter, corporate transfer memo, birth/adoption certificates, divorce decree—whatever applies to your specific exception.

Kentucky Tip: For employment relocations, companies like GE Appliances, Humana, or UPS often provide detailed transfer documentation.

2Order Current Appraisal

Order an appraisal to confirm 75% LTV if using the family‑size exception. Use Kentucky-licensed appraisers familiar with current market conditions.

3Run AUS Analysis

Run both housing payments through AUS (DU / TOTAL Scorecard). Standard FHA DTI caps (31/43) still apply, though strong compensating factors may warrant a manual underwrite.

4Budget for Reserves

Budget for reserves. Many Kentucky lenders overlay one‑ or two‑month PITIA reserves on both properties. Plan for additional cash requirements beyond down payment.

Real Kentucky Scenarios

Scenario 1: Louisville to Nashville Relocation

Sarah works for Humana in Louisville and gets transferred to their Nashville operations—exactly 180 miles away. She can keep her current FHA-financed home in St. Matthews as a rental property while getting a new FHA loan for her Nashville primary residence.

Scenario 2: Growing Family in Lexington

The Johnson family has twins on the way, making their 2-bedroom Lexington home inadequate. Their current FHA loan balance is $180,000 on a home now worth $250,000 (72% LTV). They qualify for a second FHA loan to purchase a larger home in Hamburg or Chevy Chase areas.

Scenario 3: Divorce in Northern Kentucky

A couple in Northern Kentucky (Covington area) divorces. The wife moves out permanently while the husband keeps the FHA-financed home. She can now apply for her own FHA loan for a new primary residence in Cincinnati or another Kentucky city.

Options If You Don't Qualify for a Second FHA Loan

Refinance your first FHA into a Conventional loan to free up FHA eligibility and potentially drop monthly MIP. This is often the most practical solution for Kentucky borrowers with improved credit and equity.
Pursue VA loans (for veterans), USDA loans (rural areas), or Kentucky Housing Corporation (KHC) financing for the new home if eligible.
Sell or legally assume the existing FHA‑financed home, then apply for a fresh FHA case number. The strong Kentucky market makes selling often profitable.
Consider conventional loans with low down payment options like 3% down conventional or HomeReady/HomePossible programs.

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Joel Lobb

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Joel Lobb has been helping Kentucky families navigate FHA loans and complex mortgage scenarios since 2003. As a licensed mortgage broker specializing in government loan programs, he provides expert guidance on FHA, VA, USDA, and Kentucky Housing Corporation loans throughout the Commonwealth.

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📋 Important Disclosures & External Resources

Equal Housing Lender. All loans subject to credit approval, verification, and collateral evaluation. Programs, rates, and guidelines are subject to change without notice. Manufactured/mobile homes are ineligible as collateral.

Government Resources:

Licensing Information: Joel Lobb, NMLS #57916. EVO Mortgage, NMLS #1738461. Licensed mortgage originator in Kentucky. Verify licensing at www.nmlsconsumeraccess.org

Educational Purpose: This article is for educational purposes only and does not constitute a commitment to lend. All borrowers must meet qualification requirements. HUD/FHA policy reference: Handbook 4000.1 § II.A.1.b.iii(A)

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The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). Mortgage loans only offered in Kentucky.

All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice. Manufactured and mobile homes are not eligible as collateral.

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