Non Occupant Co-Borrower and Income Qualifying Questions

QuestionsNon Occupant Co-Borrower and Income Qualifying Questions
asked 2 years ago

I took this information from an article that explains this is possible with a Freddie Mac program vs. FHA for someone purchasing a home with a non occupant coborrower. Is this true and if so can you explain the below statement regarding the Freddie Mac program does not require the occupant to contribute down payment, reserves or monthly housing liability? I don’t currently income qualify with 2 years of history and wanted to do this if possible with my dad. I have heard before that it is impossible to do this solely on his income, does Freddie Mac say it is possible to have a non occupant mortgage this way? So long I credit qualify and have my dad and his income would this be enough?

Will his credit and his income be counted or just his income?

 

“Thus, FHA loans may not work in all cases; e.g., purchasing a condo, townhouse or house for your child who is a fulltime college student or is seeking or just started employment. Even with a 20 percent down payment, borrower-paid monthly mortgage insurance will be required for the life of an FHA loan.

 

The Freddie Mac program is the most liberal in terms of considering the non-occupant co-borrower’s assets and income. The co-borrower’s assets and income can be fully utilized and can solely support the down payment, reserves, and income requirements. Hence, the occupant borrower does not need to contribute to the down payment, reserves or monthly housing liability (principal and interest, property taxes, homeowners insurance, and homeowners’ association dues). Keep in mind that the borrower’s liabilities and income willbe counted in the overall debt-to-income calculation. So, if the borrower has no income, the non-occupant co-borrower’s income must to be sufficient to income-qualify based on the total liabilities of the borrower and co-borrower.

It is important to note that the occupant borrower must credit-qualify for the various programs. That means that the borrower must have the minimum number of credit lines and credit score required for the selected program. A pricing credit score of less than 620 will eliminate the Fannie Mae and Freddie Mac programs from consideration.”

 

thanks.

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