WHAT IS THE BEST WAY TO BUY A HOME FOR YOUR CHILD?
This is a question we see quite often so I thought I’d list the options.
- No Mas “FHA Kiddie Condo” Loans. This used to be a very flexible option where FHA allowed parents to put down only 3.5% in order to help kids buy a home, but it no longer exists. I had to point that out first b/c I used to blog about it often.
- Buy as a Second Home. This is an option if parents can convince underwriters that the property is actually a second home, but if they are buying a dilapidated 1 bedroom, $100,000 bungalow in south Tucson, underwriters might be suspicious.
- Buy as an Investment Property. This of course works for any property, as long as parents qualify and can have the minimum down payment (15% for conforming and 25% to 30% for competitive jumbo).
- Buy On Behalf of Special Needs Child. Parents can buy with “owner-occupied” financing if they can prove their child has special needs (handicapped or disabled).
- Co-Sign on Behalf of Child. Parents can simply co-sign for their child too, but the child does need to have adequate credit established. However, the child does not need to have any income.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167