FHA and Non-Occupying Co-Signors

February 28, 2012 by 10 Comments

FHA has a unique qualification / underwriting guideline, that allows you to purchase a home, with a relative that does not live in the house… “The FHA Non-Occupying Co-Signor Program”  is sometimes, referred to in the Mortgage Industry as a “Kiddie Condo,”  because frankly it’s perfect for purchasing a house for kids in college!

Instead of renting a dorm, many NC parents put the student on the mortgage loan and purchase a house, splitting the rent with others!  We also use this program for 55+ adults who having aging parents who can not, for whatever reason, qualify to purchase a home – and the child helps the parent qualify for a mortgage loan.

Quite often First Time Homebuyers have a need for someone else to be on a mortgage with them in order to qualify to purchase a home.   Additionally, we see situations where onespouse has a credit issue, and while the other spouse has great credit scores (maybe one had a foreclosure or short sale), they can’t qualify for the new house on their single income.  In each of these cases, we refer clients to the FHA mortgage loan program, because of it’s common sense underwriting approach. [Read more...]

Filed Under: FHA Mortgage Loans Tagged With: , , , , , , ,

Single Parents CAN Buy A Home in North Carolina!

November 22, 2011 by Leave a Comment

Mom Can Buy A Home!With the Economy in a “slump” statistics show more and more families have a single parent.  If you are in this situation, and want to purchase a home, there are some very specific details you should know:

  • FHA requires a 3.5% Investment into the Property, which is lower than the 5% charged on most Conventional Loans.
  • The down payment for a FHA loan can be a gift (here’s more information on Down Payment Options with FHA)  When we talk, we can also check and see if you qualify for up to $8000 from NC Housing Finance Agency for your downpayment!
  • FHA loans, in today’s lending environment, generally require 12 months of clean credit, and a credit score of at least 620, unless you qualify for the NC Housing Finance Program – which allows us to approve a loan with scores between 600 and 620.

FHA will consider part time jobs if you’ve only had that part time job for 18 months – most other underwriting requires you to have a 24 month history of working 2 jobs. (and let me just say, if you are a single parent working 2 jobs – God Bless you! WOW! Talked to a Dad today who is doing that!)

CHILD SUPPORT or Alimony

You have to have evidence that you have received child support, on time, for a year for it to count as income. One of the most common problems we see is when a mom will get a child support check, cash it, and deposit part of the check into their account.  In order to have EVIDENCE that you are receiving that income, we need to have bank statements that reflect the entire “check.”  We suggest that mom’s deposit the child support check into their account at the same time each month.  DITTO with Alimony. [Read more...]

Filed Under: FHA Mortgage Loans Tagged With: , , , , ,

FHA Underwriting Guidelines for NC

November 21, 2011 by 5 Comments

fha mortgage loanWe talk to people everyday who have questions about qualifying for a FHA Mortgage Loan in NC.  FHA Underwriting Guidelines, are actually pretty straightforward. 

Unlike qualifying for a VA Mortgage loan (where you must be a qualifying Veteran) or a USDA Home Loan (that requires that you meet income limits for your county and the property must fit within the USDA RD Loan Footprint) – FHA has far fewer restrictions!  They do have Maximum Loan Amounts, which vary per county – but other than that, just about anyone who wants to purchase an Owner Occupied Home can do so!

  • Maximum Loan Amounts:  Maximum FHA Loan Limits Vary per County, and are subject to change each October.  Congress has said that they will be  lowering the High Cost Area FHA loans that are currently available in areas like Washington, DC and San Francisco in October of 2012. It looks like the maximum FHA Loan Limit for Homes in Raleigh will change at that time too. The FHA Maximum Loan limit for Wake County is $295,000 – (and although Congress did lower the the 2012 limit down to $271,050 for a few months… they moved it back to $295,000 shortly thereafter).   [Read more...]
Filed Under: FHA Mortgage Loans Tagged With: , , , , , , , , , , , , ,

Kiddie Condos are Not Just for Kiddies!

July 12, 2011 by Leave a Comment

kiddie condo

Kiddie Condo Loans refer to a FHA provision that allows for non-occupying co-borrowers.  Parents like us, with kids in college, come out a LOT better owning a unit with the student, and renting it back out.  We’ve done many of these for our friends – and most of them were NOT condo units.  It’s just an industry slang term for the loan that only requires a minimal investment (less than 5% normally covers all costs), and does not require the student to be employed full time – or have a credit score established.

We used this program for a family that moved here and wanted their dad to live in Cary.  Their mom died a few years earlier – and her illness pretty much wiped out their dad’s cash… He also didn’t have a ton of income.  Using the non-owner occupied co-borrowing of the FHA loan, we were able to get Grandpa a loan in a nice ranch near their home! He could live independently – and everyone was happy!

Wondering how Social Security Income works with FHA?  Well, we can gross it up 115%!  So if you need the Social Security income to qualify with another family member – that’s allowed.

If you or your family are looking for a mortgage loan in Cary or Raleigh, please call Steve and Eleanor Thorne,Mortgage Banker in Cary , 919-649-5058

Filed Under: FHA Mortgage Loans Tagged With: , , , ,

One Borrower Has Income One Borrower Has Credit Score

August 18, 2010 by Leave a Comment

When one borrower has most of the income… the other borrower has good credit scores… there ARE options for purchasing a home. Look at the question we had yesterday:

“We want to purchase a home, and I want to know if we can get it.  My husband currently has a mid credit score of 538,  and mine is 678.   He makes about 52,000 and I make 25,000.  I’m still in graduate school full time.  We saved  $4,000 for closing cost so far.  We want the house by the end of October 2010 Can we get a loan?”

Option 1:

Purchase a home using FHA, and have a non-owner occupied co-borrower on the loan with the borrower who has good credit scores. If you know that you can make the payments on your own, then having a parent, or other family member, on the loan will not be a burden to them.  After you’ve made 12 months of payments (and by all account mortgage interest rates will still be low a year from now) you can refinance the loan and take the family member(s) off. [Read more...]

Filed Under: FHA Mortgage Loans, First Time Home Buyer Tagged With: , , , , , , , , , , , , , , ,