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  • Writer's pictureRebecca Richardson - Mortgage Consultant

Family matters: 3 ways you can help family buy a home

Family, it’s where the heart is and where home is. And with these three little-known tips, you can help a family member purchase a home when they otherwise may not be able to.

Whether it’s for an aging parent, a college-bound child or even helping a family member who may need a financial boost, you can reach out to me to learn more about these three tips.

Family Opportunity Mortgage

A little-known and little-used tip outlined by Fannie Mae, the largest mortgage provider in the country, actually allows for one family member to purchase a home for another family member.

The Family Opportunity Mortgage (FOM) provides the option to buy a home for an aging parent or an adult child with a disability, even if you don’t plan to live there yourself. The benefit to you is the down payment can be as little as 5% and the interest rate could be lower than a more traditional mortgage. A second benefit is that the parent or child with disabilities who may not have the income or credit to quality doesn’t have to be on the loan.

This allows you to have your loved one living in a home you own but at a lower cost. Now that’s peace of mind.

Kiddie Condo

One of my favorite strategies to help with the high cost of college is to purchase a home where your child can live rent free. With this strategy, a parent can buy a home for their child even if the child doesn’t have any income.

The kiddie condo strategy allows for the home to be a primary residence because the child lives there, but the loan is based on the parents’ income. Also, since it’s a primary residence, the rates are lower and the down payment can be as little as 3.5% to 5%.

Bonus: With this strategy, the extra rooms can be rented to other college friends to offset the housing expense. Be sure to work with a financial or tax expert to determine any additional tax or financial implications.

Non-occupant co-borrower

In today’s housing market, homes prices are soaring. This often puts a home out of reach economically that you could have qualified for just months ago. But there is one solution when you can’t qualify for the home you want.

I’m not talking about living beyond your means. This is where you have income but it doesn’t meet mortgage guidelines so it is not being counted.

In this case, you can have a non-occupant co-borrower – someone else on the loan to add extra income.

Their credit needs to meet requirements and any of their debts will factor in, but it can be the right answer for certain scenarios.

Thinking it will be tough to qualify for a mortgage? Be sure to reach out to me for details on these or any other alternative mortgage options.

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