The purpose of the FHA non-occupying co-borrower loan (also referred to as the "kiddie condo" loan) is to allow one family member to have a joint interest in property, while enabling another family member to attain home ownership. This type of FHA mortgage loan is typically used by parents and children. The parent will sign as an FHA non occupying co-borrower so the child may obtain his or her first home or college housing.

This program is NOT intended to circumvent FHA’s policy against financing investor properties. If the non-occupying co-borrower owns rental properties, expect a close examination of the entire transaction. Not eligible for the $100 Down HUD REO program.

Family Ties Preferred
A familial relationship between the co-borrower and the occupying borrower is generally required. The co-borrower will have a joint interest in the property, while his or her good credit history and income is used to help secure the loan.

• 3.5% Down payment for 1 Unit, Arms-length Purchase
• 25% Down payment for 2-4 Unit Owner Occupied Purchase
• 25% Down payment for sale from parent(s) to child.

FHA Occupying Borrower Guidelines
There are certain guidelines which must be followed to make this type of loan work. The borrower:

• Needs a valid Social Security number.
• Needs acceptable minimum credit score (no minimum trade-lines)
• Should have employment if not a full-time student. No minimum income.
• Takes title to the property and signs all loan and security documents

Non-Occupying Co-Borrowers
The non-occupying co-borrower:

• Takes title to the property.
• Signs all note and mortgage documents.
• Completes a loan application with approval of credit, income and assets.
• May not be a party to the transaction.

For more information or a discussion of your needs, please don’t hesitate to call us.

Carolyn Drake                      Jon Laird
602-354-0534                      602-354-0526
800-494-2371 x 219              800-494-2371 x 211
cdrake@cfs-mortgage.com     jlaird@cfs-mortgage.com

The Sterling Group at CFS Mortgage
Home of the Worry-Free Mortgage™