July 4, 2012
FHA loans require the primary borrower to certify he or she will live on the property, using it as the “primary residence”. But FHA loans allow the option for a non-occupying co-borrower–someone who will be financially obligated on the loan but does not live on the property.
FHA loan rules, as spelled out in HUD 4155.1 Chapter Two Section B, say of these types of FHA loan transactions:
“When there are two or more borrowers, but one or more will not occupy the property as his/her principal residence, the maximum mortgage is limited to 75% loan-to-value (LTV). However, maximum financing, as described in HUD 4155.1 2.A.2, is available for
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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