Family Opportunity Mortgages – Buy a Home for Your Elderly Parents
Baby boomers have reached retirement age. This generation is healthier
and more active than their predecessors and many want to age in a home
of their own. Many of these potential home buyers have fixed incomes and
with soaring home prices, they are unable to qualify for a new home when
they are ready to downsize. This is where a Family Opportunity Mortgage
A Family Opportunity Mortgage is backed by Fannie Mae and allows you to
purchase a home for your elderly parents if they cannot qualify on their
own, at the same favorable down payment and interest rates as a primary
residence. This is a significant advantage over loan programs for second
home or investment properties.
The terms of the loan program are simple. The borrower needs a 620+
FICO score, steady employment, and enough income to qualify for both
their current housing and the new loan. Total debt-to-income ratios cannot
exceed 45% and that must include all the new costs. Finally, the parents
must demonstrate that they do not have the income to qualify for the loan
on their own. It’s important to understand that bad credit is not sufficient to
use this loan program, it must be a lack of income that disqualifies them.
This program can also be used to help an adult child with disabilities.
As more people choose to live independently in retirement, the need for
housing will continue. By taking advantage of a Family Opportunity
Mortgage, qualified borrowers can purchase a home for their parents at
very favorable owner-occupied rates and terms. Make sure to talk to a
licensed mortgage lender to learn more.