Ketcham Realty Group Inc.

850-681-0600

ReadyToMove@KetchamRealty.com

1203 Thomasville Rd.

Tallahassee

FL

USA

32303

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FHA Kiddie Condos

Patti Ketcham’s:
Quick & Dirty Guide to FHA Kiddie Condo Loans

  • Has nothing to do with Kiddies or Condos, that’s the slang term.
  • Property can be a single family residence, a townhouse, a condo.
  • Leon County loan limit for single family is $271,050. Duplex, etc. is higher.
  • The primary borrower does not have to be a kiddie, it can be your Mama, your sorry brother in law that is sleeping on your sofa, your sister that needs a fresh start, etc, etc. It must be a family member.
  • The primary borrower does not have to have any income, but, they go on the loan as the primary borrower because they will be occupying the house. My understanding is they do need to have some credit history.
  • The income and the debt of the borrower and the co-borrower are put in the same pot, then the ratios are run on the totals.
  • So a strong co-borrower is important. Remember must be a blood relative.
  • Both the borrowers must have good credit, meaning no matter how strong the co-borrower is their good credit cannot overcome bad credit on the part of the primary borrower.
  • This is a normal FHA loan. Fixed rate, 96.5% loan to value. 30 year.
  • The person living in the house can claim homestead. It does not affect the co-borrowers ability to file homestead on the home they live in.
  • Think about it…once you pay first and last months rent and a security deposit you have come up with the 3.5% down.
  • I know this works, we have done it with two of our kids.
  • Keep in mind that this program has been in place for many years and I have done lots and lots of them when I was in lending, BUT things could change in the future. So it is critical that you contact a lender that is familiar with this program. If they aren’t sure how it works or are unfamiliar with the program then call another lender. I can recommend several in Tallahassee that are familiar with this program.
  • This is a very common program in college towns and you can see why!
  • I love this program and know it is a wonderful way to start your kids, or the sorry brother, on the road to homeownership.
  • Only down side is that the debt for the mortgage is on your credit report also. But, if you can provide 12 months cancelled checks (front and back) that prove the mortgage payment is being made by the primary borrower then the lender will not count it in your debt ratio when you go to borrow mortgage money in the future.

Any questions: Patti@KetchamRealty.com or 850-545-5314

I will be glad to help.

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Patti Ketcham
Patti Ketcham