Change of Family Size

• Many young families without children use FHA to buy a first home. Often this home is large enough for the couple to live comfortably, but it may not be large enough to handle an entire family with children. The young family may have one or two children and use a second FHA loan to buy a new home to fit their growing family while keeping the first home as a rental property. In addition, the reverse is true, a large family with an FHA loan may purchase a smaller home once the children leave and rent out the original home without refinancing the FHA loan.
  
  

Divorce

• Unfortunately, sometimes marriages don't survive. If a husband and wife are both on an FHA loan for the family's home, the spouse who does not keep the home may get a second FHA loan to buy another property. Often the lender requires the new buyer of the home to prove she did not receive the home in the divorce. Usually this just means providing the lender with a copy of the divorce decree, which shows who is responsible for the FHA mortgage and who retains the family home.
  
  

Relocation

• If a homeowner with an FHA loan must move due to the changing of a job or being relocated within a job, they may obtain a new FHA loan to buy a house in the new area and keep the FHA loan on the old home. The new job must be a reasonable distance away from the current job and the current home. The homeowner could not use a job change to purchase a new home in the same metro area without paying off the current FHA mortgage or selling the existing home. They may use the old home as a second home or as a rental property.
  
  

Non-occupant Co-borrower

• The last reason FHA allows someone to have more than one FHA mortgage is when a family member co-signs to help another family member purchase a home. This is a common situation where the parent co-signs to help a child buy her first home. The parent does not intend to live in the home, which makes the parent a non-occupant co-borrower. FHA allows the non-occupant co-borrower to finance the purchase of her own owner-occupied home with an FHA loan. The relationship does not have to be child and parent; this is just the most common situation.