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But wait FHA still has Non Occupying Co Borrower OR Co- Signer...How can this help save your deal

By Peter Bright

Services for Real Estate Pros with Capital City Mortgage Investments, Inc Since 1994

February 16, 2011 01:20 AM

A Great NICHE ADVANTAGE of a FHA mortgage is the ability to add a non occupying co-borrower.

Examples:

This is typically done when the primary borrower does not earn enough to qualify for a loan by his/her self. This is great for parent buying condo or houses for kids in college.

Or a young couple just starting out and want to take advantage or the GREAT real estate deals out there but are going to need to help to BUY UP.

Another example that is happening RIGHT now is FAMILY members helping out young couples who have been REBUILDING their credit due to economic conditions , divorce, or illness.

Read below I hope this can help you close your next transaction. PLEASE Let me know your thoughts and feedback on any examples on how a FHA loan helped you save or close a deal. I am building a website just for this.

GENERAL GUIDELINES:
- Non occupying co borrower must have sufficient credit score and income to qualify...IE carry the debt load

(Key Note: Most Lenders still go by the lesser of applying applicants' credit score, so you Borrower and Co- Borrower still need a 620 min) We can go lower but the DOWN PAYMENT will be either 10% or 20% depending on score

- Non occupying co borrower IS NOT required to live in the same state of the purchasee!

- Non occupying co borrower IS NOT required to be a relative of the borrower but the LTV will be lowered!

- Non occupying co borrower can be refinanced off loan in 12 months if primary then as sufficient income to then qualify for the mortgage on his/her own. Until that can happen, primary borrower has to still earn enough to at least make full mortgage payment on their own UNLESS the co-borrower can qualify with the extra debt load or total DTI.

In regards to a related and non related non occupying co borrower the following guidelines apply:

RELATED NON OCCUPYING CO-BORROWER
Definition: A co-borrower is that is related to borrower through blood or marriage (i.e. spouses, parents, grand parents, children, siblings, aunts, uncles, cousins, nieces and nephews)
-Up to 96.5% LTV financing available
- Borrower needs a minimum 3.5% down. (CAN BE A GIFT TOO from same or DIFFERENT Relative
- Outside of this, all standard guidelines for a FHA approval still applies

NON RELATED NON OCCUPYING CO-BORROWER
Definition: A co borrower that is not related by either blood or marriage
- Up to 75% LTV financing available
- Borrower needs a minimum of 25% down
- Outside of this, all standard guidelines for a FHA approval still applies

Hope this will be of assistance. Please post your feedback and examples of all! I will mention you in my new website!

Oh YES my assistant just reminded me we can even use this on the $100.00 down and 203-k programs too! Hmmmm next post