FHA Special Situations: Co Borrowers, No Credit Score, Self Employed and Two FHA Loans

Parents or family as a co borrower

FHA allows a non occupant co borrower: someone on the loan who won't live in the home. When it's a family member, FHA generally allows the same low down payment on a single family home, and their income can help you qualify. It's one of the most common ways parents help adult children buy. The co borrower takes on full responsibility for the loan, so it's a real commitment on both sides.

No credit score

FHA can work without a credit score. Lenders build a nontraditional credit history from things like rent, utilities, phone, insurance and other regular payments, usually 12 months of on time history. These files go through manual underwriting and are held to tighter debt ratios, but they're a real path for buyers who have always paid cash.

Self employed, including one year of returns

Most lenders want two years of self employment history and tax returns. FHA can allow one year of self employment if you have at least two years of prior experience in the same line of work, or related education. Income is based on your tax returns after write offs, so heavy deductions can reduce what you qualify for. If that's a problem, see self employed options.

1099 and gig income

Contractors, commission earners and gig workers can use FHA. Lenders typically average two years of income and look for stability or growth. A big drop in the most recent year can be an issue.

Child support and alimony

Support you receive can count as income if it's court ordered, you've received it consistently, usually for at least six months, and it will continue for at least three years. Support you pay counts as a monthly debt.

After divorce

If your divorce decree assigns a debt, like a car loan or the old mortgage, to your ex spouse, the lender may be able to leave it out of your debt ratio. You'll need the decree. If you're still on the old mortgage, the payment history on it matters.

Foreclosure or bankruptcy with extenuating circumstances

The standard wait after a foreclosure is generally three years. FHA can make exceptions when the foreclosure was caused by circumstances beyond your control, like the death of a wage earner or a serious illness, and you've since re established good credit. Documentation is key.

Residency requirements changed in 2025

Since May 2025, FHA loans are available only to U.S. citizens and lawful permanent residents. Non permanent residents, including many visa holders, are no longer eligible, even for an FHA streamline on a loan they already have. Conventional loans and some non QM programs may still be options.

Mom on the loan, daughter in the home

Ashley, a new nurse, earned enough to make the payment but not enough to qualify on her own for homes near her hospital.

Her mother joined the loan as a non occupant co borrower. Their combined income qualified, Ashley bought with 3.5% down, and her mother never moved in.

Can You Have Two FHA Loans at Once? The Exceptions Explained

The general rule

FHA insures loans on primary residences. Since you can only live in one home at a time, FHA generally limits you to one FHA loan. If you want to buy a new home with FHA while keeping your current FHA home as a rental, you'd usually need to refinance the current one out of FHA or sell it first.

The exceptions

Relocation. If you're moving for work to an area too far to reasonably commute from your current home, generally more than 100 miles, you may be able to get a second FHA loan for your new primary residence and keep the first.** A growing family.** If your household has grown and your current home no longer meets your needs, FHA may allow a second FHA loan. You'll typically need meaningful equity in the current home, often around 25%, and documentation of the increase in family size.** Leaving a jointly owned home.** If you're moving out of a home you co own with someone who will stay, like an ex spouse or a family member, you may be able to get a new FHA loan for your own home.** Co signing for someone else.** If you're a non occupant co borrower on a family member's FHA loan, that generally doesn't stop you from getting an FHA loan on your own primary residence.

What it means for investors

You can't use FHA to build a rental portfolio one house at a time. But you can buy a two to four unit property with FHA, live in one unit and rent the rest. When you're ready to move, refinance it into a conventional or DSCR loan to free up your FHA eligibility. See FHA duplex to fourplex.

Veterans have more flexibility

VA entitlement can allow two VA loans at once in many cases. If you're a veteran planning to keep your current home, see VA entitlement.

Relocating for a new job

Sam had an FHA loan on a home in Tallahassee and accepted a job in Orlando, more than 100 miles away. Selling in a slow market would have meant taking a loss.

Because he was relocating for work, he qualified for a second FHA loan on a home in Orlando and kept his Tallahassee home as a rental.