There are three big advantages to using this type of loan.
1. A low down payment (as little as 3% of the purchase price).
2. A lower, owner-occupied interest rate on the mortgage Vs the higher investment property interest rate.
3. Helps the new borrower establish a solid credit rating.
With a Kiddie Condo loan program, at least one borrower must occupy the property as his/her primary residence, but extra bedrooms could be rented out to help cover the cost of the mortgage payments. This is a perfect way for a college student, recent graduate, or anyone unable to obtain a loan on his/her own to buy a condo or townhome or single family home with the help of a family member. Apply for your Kiddie Condo loan today.
The tax benefits, such as deducting mortgage interest and real estate taxes on a Federal Income Tax return, can be divided among the owners, according to who pays the expense. See your tax advisor for details.
Make sure you read the section on credit as both borrowers must qualify. If the owner occupant has little or no credit you should review the "non traditional credit" section and pay particular attention to the information on the 2nd page.
Note that the property DOES NOT have to be a Condo. If it is a condo then you need to make sure that the project is approved or the that the property can get a "Spot approval".
I closed one for a condo in Birmingham last fall where the daughter was going to college. She was the occupant borrower, but didnt have a job, therefore no income. Her father was the non-occupant co-borrower. For income, we had to rely soley on him. The daughter did have established credit.
As of Feburary 2010, HUD did away wtih "Spot Approvals" for individual units within condo projects. Since that time, the entire project must be fully approved.
Sr Loan Officer / FHA 203K Renovation / HomePath Specialist
Apply Online at http://www.rodneymason.com
Licensed in AL & GA