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FHA Non-Occupying Co-borrowers Great For Your Children In/After College

FHA Mortgage Allows Non-Occupying Co-Borrowers

A Co-Borrower on many Conventional Loans must state that the Co-Borrower occupy the property therefore eliminating parents trying to co-sign on a deal because they want to reside in their current residence.

FHA Mortgages allows a Non-Occupying Co-Borrower to help in homeownership from a family member to help strengthen the loan. (Non-OCC's can be on Refinances but limited to 75-85% LTV rate/term & cashout)

The Co-Borrower must be a close family member or demonstrate a long-standing family relationship with the primary Borrower. If no such relationship can be verified, the LTV cannot exceed 75%.

The subject property is a 1 unit, single family detached, PUD, or an approved condo unit.

Co-Borrower must have a pimary residence in the United States of America.

Having a Non-Occupying Co-Borrower does not wash out the Borrower's bad credit (keep in mind)

Why this is GREAT for your children

I just got a Loan Approved for a family who has a son attending UVA in Charlottesville, Virginia. While attending school he also got an internship for a major corporation in the area, after finishing his degree he will be hired full time, so naturally he plans on staying in the area.

The parents want to help his son establish credit and provide housing for his son. What better way to do that than getting a home to help establish credit, become an investment, tax-writeoffs and of course provide housing for the son.

This made perfect sense and the perfect sense loan for my clients was an FHA Mortgage that allows a Non-Occupying Co-Borrower.

Whether in College or after College, if you need to help out your children getting a kickstart in life, please consider an FHA Mortgage to help jumpstart his life rather than throwing money away renting.

Even better with the current market condition, you can probably snatch up a steal in a small beginner house with plenty of equity built in already.

Happy House Hunting!

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Just-In-Time's Loans - Mortgage Needs and Advice on Time. (757-228-3668)

Posted by Justin Williams - Loan Officer on 06/04/2008 11:13 PM

Comments (9)

mortgage, virginia, college, first time home buyer, fha, purchase

This post has been included in Virginia Information
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9 Comments on FHA Non-Occupying Co-borrowers Great For Your Children In/After College

JUN

2008

You beat me to this one! I am doing one as well for a father and daughter. This is a great option!

JUN

2008

Long known as the FHA "Kiddie Condo" program, few originators do know about it. Kudos to you Justin. The kiddie condo loan is big business in most college towns, as it should be. Just remember it does not have to be a condo!

I haven't stopped by your blog lately...sorry about that! This is a really great feature of FHA financing. Being able to have non-occ co-signers is a great deal in certain circumstances like the one above. Great post Justin.

Naoma - oops sorry :) Thats great!! Im glad you are utilizing this option!

Thomas- thanks Thomas! Kiddie Condo heh great term :) Thanks for commenting and stopping by!

Hey Casey!!! Glad you found my way to my blog, Always welcomed for commenting and appreciate you stopping by! Have a great night!

SEP

2008

Question: Can we still use this strategy when the occupying borrower has no FICO score and we are not able to provide Non-Traditional Credit for the occupying borrower?

SEP

2008

I used it once for some clients of mine. They ended up selling and buying another property without the coborrower.

@ Guy Responding to "Question": The non-occupying co-borrower only helps with income it does not replace the borrowers bad credit or in that case no credit, so no the borrower still has to qualify credit wise first.