This is a type of mortgage financing that got the nickname “Kiddie Condo Loan” because a lot of parents started taking advantage of it to purchase homes or condos for their children to live. This is a great option instead of paying their rent for dorms or expensive college housing. Good news is you DO NOT need to be a kid and it DOES NOT need to be a Condo that you purchase in order to be eligible for this wonderful financing opportunity.
How does it work?
The Federal Housing Administration (FHA) allows for a non-occupant co-borrower to be on the loan. A blood relative such as a parent, grandparent, sibling, etc. can co-sign on the loan and not live at the property. This is a great option for someone looking to purchase a home that cannot qualify on his or her own such as a student fresh out of school OR maybe some elderly parents who do not have the income or assets to purchase a home on their own.
The occupying borrower does not need income and assets to qualify BUT he or she does need to have a credit score and acceptable credit. He or she also must “intend” to live in the property for at least 12 months.
What are the advantages?
- Low down payment (as little as 3.5% of the purchase price)
- Helps the occupying borrower establish a solid credit rating
- Lower owner occupied interest rate vs. higher investment loan interest rate
- Tax deduction (for the one who is making the mortgage payments)
If you are thinking about buying a home this might be the lending option you have been looking for!
Want more information on this program? Request more information here or call us at (480) 447-2199.