Can you partner to use someone else's FHA Loan?

3 Replies

Hello Bigger Pockets!

I'm a new REI investor looking to get into the rental space, something I feel capable of doing while I maintain my demanding day job.

I wanted to know if it's both legal and a good idea to partner with someone to take advantage of the FHA loan?

I live in San Diego, and so far have little faith that I will be able to start rental business here with my relatively low amount of capital. Could I partner with someone that lives in, say, Phoenix, in order to take advantage of their FHA eligibility?

Basically, I would provide capital and they would live in the home for 1 year, with the house possibly under their name (not sure how this would work in this scenario). After the year they can choose to leave or continue renting. I would ultimately supply the capital for down payment and rehab and pay the mortgage if needed, we would rent out the other units (ideally this would be a 4-plex depending on the market) and then we would split the income whichever way we see fit.

Any immediate concerns with this? Any thing I should look out for or be wary of? Should I only split the income from rent but not appreciation?

Thanks in advance, everyone!

Originally posted by @Wayne Brooks :

When there are two unrelated buyers/borrowers and one will not occupy the house.....the fha down payment required is 20%. 

 Thanks for the response Wayne. Any idea if it would be legal to be the capital backer but not appear on the mortgage agreement? Obviously you take on the risk that the person you're fronting the capital for rips you off but pretending for a moment that you don't need to worry about it.