Multiple Non Occupant Co Borrowers
The Federal Housing Administration allows mortgage loan borrowers to add multiple non occupant co borrowers if they do not qualify with the income. Non occupant co borrowers is only allowed with FHA loans and not Fannie Mae Conventional Loans. Freddie Mac does allow multiple non occupant co borrowers to be added on the mortgage loan. Multiple non occupant co borrowers need to be family members or relatives and be associated with mortgage loan borrowers by blood, marriage, or law. For example, parents, brothers, sisters, aunts, uncles, grandparents, children, step children can all be multiple non occupant co borrowers for a mortgage loan applicant. Multiple non occupant co borrowers will go on the mortgage loan but not on the title to the property. A non occupant co borrower will need to provide all income, liability, and asset information to the mortgage lender.
Multiple Non Occupant Co Borrowers Qualifications
To be qualify as non occupant co borrowers for a mortgage loan borrower, the non occupant co borrowers needs to be a family member and/or relative to the mortgage loan borrower by blood, marriage, or law. In order to qualify as non-occupant co-borrowers, they need to have rental verification and/or history of mortgage. For example, if the non-occupant co-borrower is currently living with family and/or friends and is living rent free, that person will not qualify as a non-occupant co-borrower.
Verification Of Rent
Rental verification is only valid if the non-occupied co-borrower pays their landlord with a check every month and provide 12 months cancelled checks paid to the landlord. Bank wires from the non-occupant co-borrower to the landlord is allowed as long as the non-occupant co-borrower can provide 12 months bank statements of funds being withdrawn from their bank account to the landlord’s bank accounts. A verfication of rent, also known as a VOR, is required as well which is a statement signed by the landlord attesting that the tenant has been paying rent timely in the past 12 months with no late payments. If the non-occupant co-borrower is renting their home or apartment from a registered property management company, a letter from the property management manager is sufficient as proof of verification of rent in lieu of providing cancelled checks and/or bank statements.
Will Being A Non-Occupant Co-Borrower Affect In Getting A New Mortgage For Non-Occupant Co-Borrower In The Future?
Being a non-occupant co-borrower will not affect the non-occupant co-borrower with their debt to income ratios after 12 months. For example, if the non-occupant co-borrower is a renter and wants to qualify for a residential mortgage loan after one year, the non-occupant co-borrower needs to provide 12 months cancelled checks from the main borrower proving that he or she is not responsible for the mortgage payment. The risk that arises from being a non-occupant co-borrower is that if the mortgage loan borrower is late on his or her mortgage payment, it will affect their credit payment history and credit scores on their credit report.
Can You Have Multiple Non Occupant Co Borrowers?
The Federal Housing Administration allows for more than one non-occupant co-borrowers to be added to the mortgage loan borrower’s mortgage loan to qualify for income. You can have both parents added as non-occupant co-borrowers to qualify for income or you can have a brother and/or sister as well as their spouse as non occupant co-borrowers.