A loan officer I know at HomeStreet Bank recently sent out a message regarding an FHA loan program that is for WA residents who may have children going to school at one of the universities/colleges in our state. I’ll paste in below the parameters he provided that are required to meet to qualify.
I’m not sure if this is a program that is available outside of WA State so if you’re reading this blog from another area of the country you’ll want to check with your local lending resources.
Parents can help their children enrolled in college to buy a home with an
FHA 3 % down loan. Here are the details:
1. The child must be enrolled in college, and use the property as his/her residence.
2. The property must be within a reasonable distance to the college.
3. The child does not need to have income or a credit score.
4. The parent(s) must qualify for the payment, plus their own debts, and go on title.
5. It doesn’t have to be a condo; single family houses are eligible too.
6. The new FHA loan limit of $567,500 applies!
My guess is that since it is an FHA loan that it can be available through a number of lenders, so you’ll want to ask your contact if they have access to this loan. I haven’t checked to see how competitive the rates are to other programs, but with only a 3% downpayment opportunity – and most lenders are requiring more down payment right now – it’s a way for many people to still buy in some of our higher priced markets without having to break the bank for a down payment and college costs at the same time.
Since the parent and child are on the title together you should check into any estate and financial planning issues that this may bring up.
