Can You Have Two Kentucky FHA Loans at One Time?
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 FHA Loans at the Same Time in Kentucky?2025 Guide
📋 Table of Contents
🎯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
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.
The Four HUD Exceptions That Permit a Second FHA Loan
| # | Exception | Core Requirements |
|---|---|---|
|
1
|
Employment‑Related Relocation
("100‑Mile Rule") |
|
|
2
|
Increase in Family Size
|
|
|
3
|
Vacating a Jointly‑Owned Property
|
|
|
4
|
Non‑Occupying Co‑Borrower
|
|
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.
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.
Need a custom game plan? Skip to my contact info and let's run the numbers for your specific Kentucky situation.
🎯 Ready for a Scenario Review?
I can confirm your eligibility in 10 minutes or less. Call or text (502) 905‑3708 or email kentuckyloan@gmail.com for a same‑day analysis — no cost, no obligation.
Call/Text (502) 905‑3708 Email for Analysis Schedule Online📋 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:
- HUD Handbook 4000.1 - Official FHA Guidelines
- Federal Housing Administration Official Website
- CFPB Home Buying Resources
- Kentucky Housing Corporation
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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