You should have never got that far in the process in the first place. When your credit was pulled, the loan officer should have seen you already had an FHA loan. 99% of the time, when you have a FHA, VA, Fannie Mae or Freddie Mac mortgage, the loan type shows right on the credit file.
FHA has a few exceptions where some people can have 2 FHA loans open at the same time, but you do not fit the exceptions. You have already moved out of the property and established yourself now as an investor who is earning income from the home. So, you now cannot get another FHA loan. FHA was designed to assist people who are trying to buy a primary residence. The program would explode out of control if buyers could rent out their homes and then go back for another FHA mortgage. You clearly appear to be an investor since you say, "we let go ONE of our forclosed homes."
I can't see you have other options. As you must have heard, the mortgage business is tougher than ever. No more freebies.
Private investors and hard money (high interest) lenders still exist, but you would need a big down payment. Most people are not interested in the high rates anyhow.
Finance and Mortgage Consultant Since 1978
The New Jersey Mortgage Blog
· 10 years ago