Co-Signer Required to Live in Property for Owner-Occ FHA Loan

4 Replies

I recently spoke with my lender about options for obtaining an FHA 203k loan on a multi-family here in NJ. Since I'm partnering with someone, my lender stated that FHA owner-occupied loans require both signers on the mortgage to live in the premises. This is a problem for my partner as he has a family that very much likes where they currently live. Is there any way to get an FHA loan with a partner without requiring them to ALSO live in the property (I'm looking to house-hack but he can't/won't)? That low down-payment and rate is too enticing for us to simply start looking for private/hard money if there's another option out there. Thanks for any guidance.

As far as I know, the the coborrower Can be a non occupying borrower but the down payment is like 20-25%.  I believe if the non occupying borrower is a family member, you can still do 3.5% down . You should be able to find this on fha’s website.

Originally posted by @Marc Weisi :

I recently spoke with my lender about options for obtaining an FHA 203k loan on a multi-family here in NJ. Since I'm partnering with someone, my lender stated that FHA owner-occupied loans require both signers on the mortgage to live in the premises. This is a problem for my partner as he has a family that very much likes where they currently live. Is there any way to get an FHA loan with a partner without requiring them to ALSO live in the property (I'm looking to house-hack but he can't/won't)? That low down-payment and rate is too enticing for us to simply start looking for private/hard money if there's another option out there. Thanks for any guidance.

Max LTV with FHA drops from 96.5% to 80% or 75% (can't recall, but doesn't matter because either way 3.5% down is out the window) if you try adding a non-occupant co-borrower on a 2-4 unit property.

Thanks @Chris Mason . I've read through the FHA guidelines and you're right, it kind of takes away the main benefit of going with an FHA loan in that case.

@Andrew Postell , I need a co-signer because a partner and I were looking to do our first BRRR together. He has more construction experience and a good amount of capital and I was willing to live in the property (that's what I brought to the table). It looks like we'll have to save up 20-25% for the down payment in this case.