Do you have children getting ready to head off to college for the fall?  If so, here are a few things to consider.  You probably thought about buying your son or daughter a home to save on dorm costs and apartment rent.  Below are a few things to consider.

FHA still allows a non-occupying co-borrower to qualify for the home loan without income from the occupying borrower being considered. So this is the ideal loan for a college student and parent.  It’s perfect because the college student can have no income or work history. The parents can co-sign a
loan with their college student. But the student (or anyone else on the loan) must meet the credit guidelines with a  credit score. The students (occupying borrowers)  do not have to show employment or income- that can be covered by the non-occupying co-borrower (the parent), but credit scores are
still required on ALL borrowers on the loan.

You  might be able to use a  conventional loan with parents showing the property as a second home.  In this case, the occupant is not considered on credit or income qualification because this is considered a second home for the parents and only the parents’ information is considered in the loan process.
The advantage to this over an investment loan would be the interest rate and reserve requirements.

VA does not allow second homes or for a co-borrower that is not the spouse of the veteran to be on the loan, so you cannot use a VA loan in this situation.

Recommended Posts

Leave a Comment