FHA Loans Help Single Borrowers

by Gina Pogol
July 20th, 2010

The days of waiting until you are married to buy a home are over. Today, about a third of home purchases are made by singles. According to real estate firm Coldwell Banker, however, it is getting more common for singles to purchase their homes with another co-buyer. In fact, 13% of them buy homes with other purchasers, and half of these folks co-own with their parents.

Co-buyers of property when they won’t both be living in the home have a few options for financing. The purchase can be classified as investment property, but then down payment requirements are higher and the risk-based fees can be prohibitive. It can be financed as a primary residence with both borrowers on the loan, but only the income of the buyer living in the home can be used to qualify. Or it can be financed with an FHA mortgage to 96.5% of the purchase price.

Both occupying and non-occupying borrowers and co-borrowers

  • take title to the property at settlement
  • are obligated on the mortgage note, and
  • must sign all security instruments.

The non-occupant co-borrower must have a principle residence in the United States. Non-occupying co-borrowers can only finance 75% of the purchase price unless they are related by blood, marriage, or law, such as:

  • spouses
  • parent-child
  • siblings
  • stepchildren
  • aunts-uncles, and
  • nieces-nephews, or
  • unrelated individuals that can document evidence of a family-type, longstanding, and substantial relationship
  •  | 
  •  | 
  •  | 


This entry was posted on Tuesday, July 20th, 2010 at 2:40 pm and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Leave a Reply

Are you a Mortgage Lender specializing in FHA Loans? Join our mortgage directory today! Homeowners click here to appy for FHA Loans