How it works:If the aging parent is unable to work or doesn’t make enough money to qualify for a mortgage on their own, their child is considered the owner and occupant of the property, even if he/she owns and lives in another home. That means the child can apply for the mortgage (without including their parent’s name on the application or title) and still get the benefits of financing a primary residence. The same is true for the parents or legal guardians of a handicapped or disabled adult child who is unable to work or doesn’t bring in enough income to qualify for a mortgage independently.
Besides a lower interest rate, another benefit to financing a primary home is a lower down payment requirement. The Family Opportunity Mortgage requires as little as 5% down, as opposed to the 10-15% you’d be required to put down on a second home or investment property.
To put that into real numbers for you, if you put 5% down on a $200,000 home, you’d pay $10,000 up front. 15% down on that $200,000 house is $30,000.
Family Opportunity Mortgage at a glance:1
- Adult children who want to provide housing for their parents—if the parent is unable to work or doesn’t have sufficient income to qualify for a mortgage on their own, the child is considered the owner/occupant
- Parents or legal guardians who want to provide housing for their handicapped or disabled adult child—if the child isn’t able to work or doesn’t have sufficient income to qualify for a mortgage on their own, the parent or legal guardian is considered the owner/occupant
- 620 minimum FICO
- 45% max debt-to-income ratio
- Loan amounts up to $647,200
- Minimum 5% down payment
- Purchase and refinance
- Borrower should provide a written statement detailing how the home will be used
- No requirements for the owner to live in the property for a certain amount of time each year
- No distance requirements—property can be right down the street from the home the borrower actually occupies or in another part of the country
How do I know if the Family Opportunity Mortgage is a good fit for my situation?Your best bet is to talk through your unique circumstances with one of United’s expert mortgage lenders. To get started, contact our team or start your secure, digital application now.
1Normal credit criteria apply. Not all borrowers will qualify. This is not a commitment to lend. Qualifications subject to change without notice. Tax implications of the family opportunity mortgage vary depending on the situation. Consult your tax advisor for details.