Partner + Personal/Vacation/Investment Mortgages

5 Replies

Hi BP,

I'm currently in a situation where my partner is providing the funds for 2 buy and hold deals but does not want to be on the loan since he has been on other deals. My income and credit are more than enough but my loan officer is worried about how to get the down payment funds into my name without putting his name onto the loan application. Is there a way around this?

Some more background, these will be my first two deals in a rental market I know very well. I still live with my parents so we were thinking of declaring the first property as a personal home and the second home as a vacation home. Can we keep saying these are vacation homes in future deals as well?

Some banks will allow the down pymt money to be a gift from family

Hi Mike,

I believe what you can do is have your partner become the Non-Occupying Co-Borrower.

A Non-Occupying Co-Borrower is someone who helps you qualify for the Mortgage, but because they are not occupying the property with you, can increase your ability to qualify, including with Sourced Funds.

Call up your bank and explain the situation with them. However, make sure you mention that your partner will not occupy the building with you.

Make sure you understand the concept.

Google "Non-Occupying Co-Borrower" and "Non-Occupant Co-Borrower."

The trick here is that the Non-Occupying Co-Borrower must be a relative, but in some cases, a good friend or partner with history will also qualify.

Investor Llew

HI Mike,

Some banks allow a letter to be written identifying it a gift. It depends on how he gave you the money and how long it has been "seasoned" in your name. 

I do that quite often as I won't qualify for a conventional loan and thus have to go through a couple banks with special loan programs at 40% down. 

Check with your borrower about what qualifies as a vacation home.

@Mike Huang , you said you are purchasing two buy and holds. Then you say you wish to call one of them a primary residence. If you say you're going to live in the property for the purposes of qualifying for a loan, then you need to actually live in that property. It is considered mortgage fraud - a felony - to say you will occupy it, then do not.

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