FHA Kiddie Condo Loan

August 3rd, 2009

FHA Kiddie Condo Loan
By Andre Plessis
 

FHA Kiddie Condo Loan, is an excellent program to help first time home buyers and individuals who are going through a divorce and may not be able to qualify on their own. The FHA Kiddie Condo program is really just a regular FHA program with a nickname, because it allows non-occupant co-borrowers. This means that parents can purchase a condo using their credit and their income but are not required to live in the property, only the co-borrower is required to live in the property.

The property is not considered to be a second home or an investment property. Because of this, the interest rates are the same as the regular FHA loan programs. FHA Kiddie Condo Loan is a great way for young adults, to get started buying their first home is by using the FHA "Kiddie Condo" Loan Program. This type of mortgage allows a person to co-borrow with a blood relative (eg. parent, grandparent, sibling, etc.) who helps qualify for the loan using their income or assets. Both borrowers take title to the property and sign for the loan.

The FHA Kiddie Condo Loan Program is also an excellent program for parents to help their children who are going through a divorce and help them qualify for a loan so they can purchase a home.

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".

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