FHA for family member?

[John Menton]

Could I use an FHA loan to purchase a multi family for my brother who is a college student. This would be his primary address but not mine. Not sure how that works. Put him on the loan so that it's sort of owner occupied?

[Alexander Zurn]

@John Menton yes, you and him can both go on the loan. Your income will be used to qualify and you do not have to live there. FHA obviously requires owner occupancy but when a co-borrower does not intend to live at the property FHA classifies it differently. Essentially it has to meet 75% LTV.

HOWEVER, if you are blood related, you can still achieve maximum FHA financing (96.5%). See below regarding FHA Loans and Non-Occupying Co-borrowers

"In cases where not all the borrowers will live in the home full-time, the loan is classified differently. As a result, there are different rules that may affect the mortgage.

According to HUD 4155.1, Chapter 2 Section B, A non-occupying borrower transaction involves two or more borrowers where one or more of the borrower(s) will not occupy the property as his/her primary residence. When there are two or more borrowers, but one or more will not occupy the property as his/her principal residence, the maximum mortgage is limited to 75% loan-to-value (LTV).

Borrowers should take note of some exceptions to that 75% limit which are based on family-type relationships.

Borrowers are eligible for maximum FHA loan financing for non-occupying borrower situations for FHA loan applicants who are related by blood, marriage, or law. Chapter Two describes these relationships, which include (but may not be limited to) the following:

• spouses
• parents
• children
• siblings
• stepchildren
• aunts-uncles
• nieces-nephews"