Yes, you can! And in many cases, at least in the program that I am highlighting here, it is treated as an owner-occupied loan, even though your parents will be the ones living there. This means you get a better interest rate and qualify for lower down payment requirements.
This allowance to buy for parents, but have it considered owner-occupied, is dubbed by many as the “Family Opportunity Mortgage”, and I first blogged about it in 2014, found here.
These are the requirements:
- Loan amount must be in the conforming or high-balance loan limit (no Jumbo). Current high balance loan limit in Bay Area counties is $765,600 (UPDATED 1.2023: max loan amount is $1,089,300!)
- Single-family home, condo or townhouse are all acceptable
- 5% minimum down payment/equity requirement
- You must qualify with both your current housing payment as well as the parents’ proposed housing payment
- Parents cannot be on the loan or title
- A letter stating the purpose of the loan, the parents’ inability to afford the mortgage payment and their intent to occupy is a requirement. Do note that it is underwriter discretion to request a copy of the parents’ tax returns to verify they cannot afford the housing payment.
- We can also refinance into this program!
- It is okay if you own rental properties
This same allowance applies if you have a disabled adult child and are looking to support them financially with a home purchase.
Please contact me directly if you have specific questions or if I can assist you with this kind of loan. I can help anyone looking to buy or refinance in California.
I own a home that was once our primary home and we turned into a rental about 10 years ago..
I have a daughter who is on the Autism spectrum.. She currently works but its hard for her to hold down a full time job .. Even though she has a college degree its just very stressful for her.. She has many sensory issues so living with people is hard and so sharing an apartment or living with us in our crazy house is too hard for all involved. I had been thinking about refinancing our rental to possible lower the payment a few hundred and having her live in our rental. That way if she couldnt work full time I can make the rental payments for her either fully or partially. Would this situation qualify?