Determine Eligibility

• 1). Ensure your situation warrants FHA insurance before applying for a loan. Eligible borrowers have special circumstances that require them to maintain both a primary and secondary residence, such as an undue hardship. For instance, a borrower who must relocate due to job transfer, but cannot find affordable rental housing within reasonable commuting distance of her work may qualify for a second-home loan. You must provide documentation showing a lack of affordable housing or a need for a larger home due to an increase in household size.
  
  
• 2). Verify that you have the funds to close on a second home. Because second homes represent increased risk to HUD, which pays lender claims on defaulted FHA loans, the maximum loan-to-value is higher than that of principal residences. The max loan amount is 85 percent of the lesser of the second home's appraised value or sales price. The borrower must contribute 15 percent down payment rather than 3.5 percent required on primary dwellings. Acceptable sources of funds include accounts in your name and gift funds from a family member or charitable organization.
  
  
• 3). Access HUD's homepage at hud.gov. Select the Federal Housing Administration link on the right side of the page in the third box down.
  
  
• 4). Select "Search for an FHA-approved Lender" under the "I Want To" category on the left side of the FHA homepage.
  
  
• 5). Choose "Texas" under the pull-down menu next to "State," which is the third category under search criteria on the lender list page. You may also input a county to narrow down the search results and find a lender closer to your area. Select "Title II" in the "Insurance Type" category and "Single-Family Originator" next to "Servicer-Originator Type." Select the "Search" button at the bottom of the list.
  
  
• 6). Scan the list of approved lenders that appear in the search results page. The county where the lender is located is listed to the far right of the company name.
  
  
• 7). Click on the company that interests you to locate and display the business's address. The system also supplies the company phone number, fax number and an email address.