Can I buy from a family member with an FHA loan?
Often yes — but it generally triggers FHA's identity-of-interest rule, which may cap the LTV around 85% (about 15% down) instead of the standard 96.5%. Limited exceptions and lender overlays may apply.
What this actually means.
FHA tightens the down payment on family-to-family sales because the relationship may create pricing-bias risk. Exceptions to the LTV cap can include: a family member buying as a primary residence after the property was previously the seller's primary residence; or a tenant of 6+ months buying from the landlord. Exact rules and documentation are governed by HUD Handbook 4000.1 and lender overlays — confirm against current guidance before structuring an offer.
Where this can move.
Property classification (single-family, condo, manufactured, 2–4 unit), occupancy, FHA program flavor (standard FHA vs 203k), and lender capability can change the answer.
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Educational only. FHA guidelines, lender overlays, rates, fees, and underwriting requirements can change. Final eligibility depends on full underwriting review. Mortgage Expert, Inc. is not affiliated with HUD, FHA, or any government agency.