Mortgage Guidelines on Non-Occupying Co-Borrower?

• Having non-family members as non-occupant co-borrowers
• Purchasing and/or refinancing a two to four-unit multi-family owner-occupant primary residence home
• Family member selling to a family member who will be a non-occupying co-borrower

Purchasing and/or refinancing a two to four-unit home and family member selling to a family member who will be a non-occupant co-borrower will limit family member co-signors to 75% as well.

Eligibility Requirements

There are no limits on the number of non-occupying co-borrowers to be added. However, all non-occupant co-borrowers need to meet the minimum HUD Agency Mortgage Guidelines. This includes with regards to the minimum credit score requirements, debt-to-income ratio caps, and waiting period after bankruptcy and/or foreclosure.

The qualifying credit score is used with the middle credit score of the borrower with the lowest credit score. This is whether the main borrower and/or co-borrowers have the lowest credit scores.

If you’re looking to buy a home with someone who will not be living in the property – known as a non-occupying co-borrower – there are some special mortgage guidelines you’ll need to be aware of. In this blog post, we’ll outline what these guidelines are and how they can impact your home-buying process.

When it comes to getting a mortgage, lenders will typically want to see that the borrower has a strong financial profile. This means having a steady income, good credit history, and enough saved up for a down payment and closing costs. However, if you’re working with a non-occupying co-borrower, the lender will also take their financial profile into consideration.

The general rule is that a non-occupying co-borrower can help you qualify for a loan if they have a strong enough income and credit history. In some cases, having a non-occupying co-borrower can even help you get a lower interest rate on your loan.

However, there are some restrictions to be aware of when it comes to using a non-occupying co-borrower. First, the maximum loan amount you can qualify for will be limited to 90% of the purchase price of the home. This means that if you’re looking to buy a $200,000 home, the maximum loan amount you could qualify for would be $180,000.

Second, you’ll need to occupy the property as your primary residence in order to use a non-occupying co-borrower. This means that investment properties and second homes are not eligible for this type of financing.

And finally, most lenders will require that the non-occupying co-borrower sign a mortgage note pledging to make the payments on the loan if the primary borrower is unable to do so. This protects the lender in case of default and helps to ensure that the loan will be repaid.

If you’re thinking about using a non-occupying co-borrower to help finance your home purchase, be sure to talk to one of our senior loan officers about the specific guidelines and requirements. We will be able to help you determine if this type of financing is right for your situation.

Check If You Qualify

Fannie Mae And Freddie Mac Non-Occupant Co-Borrower On Conventional Loans

Fannie Mae and Freddie Mac Non-Occupant Co-Borrower Mortgage Guidelines allow for non-occupant co-borrowers to be added on owner-occupant primary conventional loans. Unlike FHA Loans, conventional loans do not require non-occupant co-borrowers to be related to the main borrower by law, blood, and/or marriage. You can have friends, co-workers, business associates become non-occupant co-borrowers.

Conventional loans require a 3% down payment on a home purchase for first-time homebuyers. A first-time homebuyer is defined as a home buyer who did not have any homeownership interest in the past three years. Otherwise, owner-occupant homebuyers need a five percent down payment on a home purchase on conventional loans.