What options do I have to help my college bound son or daughter purchase a home while they are in school and not working?
Option 1: The son/daughter would be the primary borrower with parents co-signing (using the parent’s income to qualify) on an FHA loan. (This is also commonly referred to as a kiddie condo loan.)
- Son/daughter must have decent credit (must meet the minimum credit score outlined by the lender for FHA loans)
- Son/daughter does not have to be working or receiving any income
- Parents will be co-signer and their income must support their monthly debts as well as child’s debts and new mortgage payment
Option 2: As long as the property is a reasonable distance from the parent’s home – parents can purchase the home as a 2nd home (with same or similar rate to primary home purchase).
- College bound son or daughter to reside in the one unit second home residence purchased by their parents
- Child must document they are currently enrolled in college
- Subject property must be within a reasonable proximity to the university the child is attending
- The property can provide the parents a place to stay while visiting the campus but will be child’s primary residence
- Property cannot be rented and must be occupied by the child for a minimum of one year
- Parent’s cannot own additional second/vacation homes in the same locale
- Parents apply and qualify for the loan – child is not an applicant
- Parents own the property but child may join the parents on the title (child not required to be on title)
