With times not being what they were a year or so ago, we need to get creative in finding ways to getting people in homes.  While many look for new ways and new programs to make a deal, many miss out on what's always been available to them. 

A NON-OCCUPANT CO-BORROWER (NOCB) is just that.  It's a borrower who will be a co-signer on the mortgage, but a borrower who won't occupy the newly purchased home.  The NOCB is wonderful for a variety of reasons.

1)  They won't have to be your roomate, they're just your co-signer.

2)  The income and credit and assets of the NOCB can be used to help assist the borrower in purchasing a home.  There's a vast difference between FHA and Conventional it the way they treat the NOCB.  We'll get to that later.

3)  The NOCB can still go out and qualify to buy a new home on their own.  As long as the borrower living in the property can prove that they've been making the payments themselves for "generally" the last 6 months and those payments have been timely, then the NOCB can go buy a home one their own without counting the co-signed debt into their debt ratios for their new home.

4)  There are so many people who have relatives that may have the ability to co-sign, but are afraid that the NOCB won't be able to move into a new home b/c of this debt.  Therefore, they don't want to burden them.  Many more homes would be sold if the NOCB were used.  The lenders like to have additional signors on their mortgages, but lenders generally don't know about the NOCB, understand the NOCB or know how to utilize the NOCB. 

5)  FHA is the best program around for utilizing the NOCB.  FHA does not mandate that the borrower qualify in the least on their own.  In other words, a dad can co-sign for a daughter who doesn't make a penny b/c she's in College.  As long as the two of them qualify together, it's a go. 

5)  Not true with Conventional Loans.  Their is a minimum of 10% down payment with 5% being the borrower's own funds.  Additionally, the borrower must generally be able to keep the new housing payments within ratios of 38/45.  These can be overridden throught automated findings by FNMA or FHLMC, but all this babbling means that you just need to know that conventional loans are so much more restrictive than FHA loans. 

NOCB's are excellent for getting your buyers into a new home.  For more information, feel free to contact me.  Thanks.

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