FHA Duplex w/ Cosigner

[Thomas Alexander]

I am finding a lot of conflicting information online and was hoping for some advice. I am looking at a duplex that I want to purchase using a FHA loan and my mother as a cosigner. I was told that since it is a multifamily with a non-occupying co-signer (although I will be living in one of the units), then the loan becomes a 20% down payment versus the standard 3% down FHA loan. Is this true and can anyone confirm this?

[Jerry Padilla]

@Thomas Alexander You would still be able to put 3.5% down payment with your mother being a non-occupying co-borrower. Since the relationship is blood related, the 25% down payment for a non-occupying co-borrower wouldn't be required. Another thing to keep in mind is that you will need 3 months reserves, of your own funds, on any 3-4 unit properties. Down payment can be gifts funds but a gift for reserves is not allow by FHA.

@Erin A.   I read your reply and your lender must have made an exception on using gift funds for 3 month reserve requirement unless you had other money and gift funds were applied towards your down payment.

@Kyle Gregg  Erin is correct. No reserves required for a duplex