Home Buying in 89117>Question Details

George, Both Buyer and Seller in Trenton, NJ

Is it possible for a parent to help a married/adult child buy a home as a first time buyer? This is in Las Vegas.

Asked by George, Trenton, NJ Tue Oct 6, 2009

Child (couple really) have bad credit, no down payment, but child working at good, steady job $35,000 py. This would be a home home big enough for daughter/her husband and widowed parent, or maybe two smaller homes? Good credit, small savings not already committed. Preferably two family or one with in-law apt or what ever they are called in Las Vegas. Also, are there still VA loans? Are there any advantages to a VA loan these days? Do lender/sellers really offer them?

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5
yes it's possible, as Patrick said there are programs for non occupied co-borrowers

Best Wishes
0 votes Thank Flag Link Mon Mar 23, 2015
It is very possible through certain programs that allow a non-occupied co-borrower. However, all borrowers that will be on the loan are going to have their credit scores used for the loan. A non-occupied co-borrower should be used to bring strength to the overall financial picture (i.e. income and reserves). But, all borrowers need to have credit scores worthy enough to qualify for the loan. If you have any other questions or if I can help you in any way, please feel free to contact me to pick my brain. I'd be happy to help you out! patrick.winchell@newamerican.com

Best,

Patrick
0 votes Thank Flag Link Thu May 17, 2012
There are several issues in your question, so we'll answer them one at a time.

Who has the VA eligibility? If the parent has the VA loan, they must purchase the property, and must be owner-occupants. They cannot "give" the eligibility to their children. One of our listings was recently sold on a VA loan, so the lenders really are making them. The biggest advantage to ta VA loan is that there is no down payment.

There are several ways you can help a child purchase a home: 1.) The most common is a gift of the down payment funds, with the children being the actual purchasers. (If there is a divorce, each spouse gets half the equity in the property. You must sign a gift letter stating that you do not expect repayment.) . 2.) You may co-sign for your children as a co-borrower if their credit is not sufficient. Be aware, if they do not make the payments, you are as liable as they are. If they make late payments, it will show up on your credit report. (If they already have bad credit, and you have good credit, you might not want to go this route. There is a reason their credit is bad and you may not be getting the whole story.) 3.) You can purchase the home as the owner and allow them to live in it and make the payments. If you live in the property, you can get an owner-occupant loan, with lower interest rates and lower down payment, depending on credit and income. If you will not be living in the property, you will have to qualify for an investor loan, with higher down payment and a higher interest rate.

In our area, there are virtually no 2-family homes in one house in the same sense that they have them back east. There are many homes with in-law quarters, guest houses, and casitas. It all depends on your price range and where you want to be in the valley.

Your best bet is to contact a reputable lender here in the Las Vegas Valley who is familiar lending requirements and can tell you pretty quickly what program you need to be on.

Regards,
0 votes Thank Flag Link Wed May 2, 2012
Hi George. The answer to your question is yes parents can help their children buy a house by gifting down payment money and/or closing costs, but the kids would have to be able to qualify for the mortgage. If the kids don't have good credit, they can't qualify for a mortgage. But depending on where they are willing to live, the City of North Las Vegas has a great program that not only helps them improve their credit but also gives them a down payment grant. This might be a great option for them.

Yes, there are still VA loans. I'm working with two buyers right now who are purchasing using their VA. The advantages are no down payment, but it must be owner occupied and the VA must be able to qualify for the loan.

I'd be happy to work with you directly if that is an option for you and the kids. Give me a call or drop me an email.

Heather Peck
Rosen & Company West
702-595-7380
LasVegasExpert@yahoo.com
http://www.HeatherSellsVegas.com
0 votes Thank Flag Link Tue Oct 6, 2009
Here's a link to questions and answers about first time home buyers. If the parents aren't on the loan or on title, and the parents are gifting the child with the down payment, yes, parent can always help. Nice parents!

http://www.federalhousingtaxcredit.com/2009/faq.php#2 - this pertains to the first time home buyer tax credit and who qualifies. Whether or not you're looking to take advantage of the tax credit, you'll find this information helpful.

There are still VA and FHA loans. However, when buying properties in the hottest price ranges in areas of affordability, cash trumps other offers. FHA can take 45 days or longer to close escrow --- and sellers prefer faster closing. Also, FHA and VA have very stringent rules before they approve a loan, and sellers may not be receptive to bringing their property to meet FHA and VA guidelines.

The advantage to VA is 100% financing, no down payment. The disadvantage is that VA guidelines and timelines are so hard to meet that property owners are reluctant to even look at this type of loans, if the other buyers are coming in with higher initial deposits and down payments which signal the buyers' ability to close a transaction.

Here's a recent article in San Francisco Chronicle regarding VA loans that you may want to read:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/10/04/…

Good luck!
0 votes Thank Flag Link Tue Oct 6, 2009
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