Does a non occupying co borrower have to be a relative Fannie Mae?

Does a non-occupant co-borrower need to be a relative?

The non-occupant co-borrower must be a relative (parent, grandparent, child, sibling, aunt/uncle, spouse/domestic partner, or in-laws) If a non-occupant co-borrower is not related to the primary borrower by blood, marriage, or law, then a 25% down payment is required. The co-borrower’s name must be on the title.

Does Fannie Mae allow non-occupant co borrowers?

The non-occupant borrower income flexibility is available for all Fannie Mae loans, including HomeReady® mortgage. For more information on non-occupant borrower eligibility requirements, refer to Selling Guide section B2-2-04, Guarantors, Co-Signers, or Non-Occupant Borrowers.

Can a friend be a non-occupant co-borrower?

FHA non-occupant co-borrower loans allow close friends and family members to purchase homes for each other at the same low FHA mortgage rates as are available for other FHA loans.

Does a mortgage cosigner have to be family?

To be eligible, a cosigner must have a family relationship with the primary borrower. This includes a parent, grandparent, sibling, aunt or uncle. But it can also be a “family type relationship”. This can include someone with whom you have a close, long-term relationship very similar to that of a family member.

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Does FHA allow non occupying co-borrowers?

FHA allows another borrower who will not live in the mortgaged property, to co-sign on an FHA loan. … A borrower by itself may not qualify, but paired with a co-borrower, may qualify. The FHA non-occupant co-borrower is even allowed to have the only income in an FHA transaction!

What are the LTV requirements when a loan has a non occupying co-borrower?

Mortgages with non-occupying co-borrowers are limited to one-unit properties if the LTV will exceed 75%. If a parent is selling to a child, the parent cannot be the co-borrower with that child on the new mortgage, unless the LTV is 75% on less.

What is a non-occupying co-borrower?

A non-occupying co-borrower is similar to a guarantor. They ultimately have no claim on the home – meaning they can’t take actual possession of it – but as a non-occupying co-borrower on the mortgage, they are financially responsible for paying back the loan if the primary borrower is not able to do so.

Who can be a non-occupant co-borrower Freddie Mac?

HUD does allow non-occupant co-borrowers who are not related to the main borrower that is not related to the main borrower by blood, marriage, law. However, if not related by blood, marriage, or law, HUD then requires a 25% down payment on FHA Loans.

Who does FHA consider a family member?

FHA defines family member as someone who is related to the borrower by blood, law, or marriage.

Does it matter who is borrower and co-borrower?

Cosigners are people who guarantee debt for someone who cannot qualify on their own. The understanding is that the primary borrower is the person legally responsible for repaying what is owed.

Cosigner vs. co-borrower: Summary.

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Co-borrower Cosigner
Takes on shared debt with someone else Guarantees debt for someone else

Can you do a non-occupant co-borrower on a conventional loan?

A non-occupying co-borrower is allowed for conventional loans as well. As with FHA, the lender will use the lesser of the borrower’s credit scores to determine approval. There are requirements a co-borrower on a conventional loan needs to meet.