I am in search of advice or experience from anyone who has been a cosigner or borrower on a Non resident FHA Loan. Below you will find my situation.
My Little brother is graduating Highschool this year and going to college. I recently discovered that Family members can be a cosigner on an FHA loan to help an applicant get approved. I basically want to find him a 3 bedroom 2 bath house between 60k-95k in his new collegetown (which is still undetermined). I would also be lending him the 3.5 percent downpayment and paying the closing costs. I have decent credit and very good income. My brothers credit is almost nonexistent since he just got his first credit card. My brothers responsibility for the home besides carrying the loan would be maintenance ( he is very handy) and paying the property tax, Insurance and mortgage insurance. I would let hime live there for free but I want him to feel that he has some skin in the game. I would cash flow about 200/ month from the other 2 roommates rent. In return he gets a college rental property for cheap for 4 years building equity and we split the profits 50/50 when selling after college.
Has anyone done this before or see a complication getting the loan approved? The cash on cash return for me would be anywhere from 60-100 percent return depending on property type and rent collected.
