Mortgage for Elderly Parents
Hi, it’s Mortgage Mack. And I had another real scenario that I thought was very interesting that I would share with everyone today.
A Mortgage For Elderly Parents can be Treated as a Primary Residence even if the Loan is in the Name of the Children Only
A real estate agent that I’ve done business with for many, many years called me and said he had a couple that wanted to buy a home for an elderly parent. And this parent is elderly and on social security and does not have a full-time job. And his question to me was, what is minimum required down payment. He assumed that in this situation that it would be an investment property for the children to buy a home for their elderly parents and will therefore require a much larger down payment than a traditional primary residence. And so, we were thankful to discover that FannieMae makes provisions for children to buy homes for elderly parents as a primary residence and put as little as 5% down as opposed to on an investment property. The minimum down payments for an investment property is 15% but the best opportunity for terms on an investment property require a down payment of 25% down.
So, Fannie allows parents. I’m sorry. Fannie allows children to buy homes as primary residence with as little as 5% percent down for elderly parents or parent.
FannieMae also Allows Parents to Purchase a Home for Children with Disabilities
FannieMae also makes provisions for parents to buy homes for children with disabilities or who maybe physically challenged who cannot qualify on their own. In this scenario, the parents would be purchasing a home as their primary residence. They would indeed be on the Note and the Deed. And they would buy it as a primary residence for as little as 5% down.
So, I think that covers that. But you know, there’s a couple of other scenarios too where parents can buy a home for their children and the children actually be on the loan and we call that a non-occupant co-borrower and parents can also be co-mortgagors on the loan, but maybe not have ownership interest as a co-mortgagor.
And so, I’ll leave some notes and some links specific to co-mortgagors and non-occupant co-borrowers along with maybe some notes specific to our first scenario where we were able to help a couple buy a home for their elderly parents for as little as 5% down.
Hope you have a great day. Happy New Year.
See also: FannieMae HomeReady Low Down Payment