Can we refinance an FHA loan into a conventional??

I need some direction on what to do. We have an FHA financed mortgage on our first home, it is 1000 square feet and we just had our second child. I have heard that we can't get a second FHA loan unless we have 25% equity in this loan (we don't). We also do not have 10% to put down for a conventional loan. We have tried to sell our home in the past and it sat for almost a year. Is it possible to refinance our current loan into a conventional loan and then use FHA to mortgage a second home? our credit is 670 (him) 690 (me) average. We have about 40k in retirement and about 5k cash on hand. We owe 107k on our FHA and it is worth about 110-115k. Our income is about 125k a year but a lot of that goes to private schools and other bills (not debt). Our comfort zone for the new house payment wise would be about 150k-200k. Thanks for any help you can provide! by kristysamuels33 from Dacula, Georgia. Jun 30th 2011 Reply