HUD vs FANNIE MAE Non-Occupant Co-Borrower Guidelines
In this blog, we will cover the HUD vs Fannie Mae non-occupant co-borrower guidelines on FHA and Conventional loans. The United States Department of Housing and Urban Development commonly referred to as HUD, is the parent federal agency of the Federal Housing Administration (FHA). HUD, the parent of FHA, is not a lender. Dustin Dumestre, President and CEO of F1 Lenders, a dba of NEXA Mortgage, LLC, explains how FHA loans work and how HUD, the parent of FHA guarantees and insures FHA loans:
FHA does not originate nor fund FHA Mortgages. Private mortgage companies lend on FHA loans. HUD’s role is to insure and partially guarantee residential loans to lenders who follow HUD Guidelines.
What this means is if a borrower defaults on an FHA loan and the property goes into foreclosure, HUD will partially guarantee the loss sustained by the lender. In order for HUD to insure FHA loans, lenders need to follow HUD mortgage guidelines. If the lender does not follow HUD Guidelines, the home loan is not insured and the lender will sustain the whole loss from the foreclosure.
Difference Between HUD vs Fannie Mae Non-Occupant Co-Borrower Guidelines
The difference between HUD vs Fannie Mae non-occupant co-borrower guidelines is you can only have family members who are related by law, marriage, or blood to the main borrower to be non-occupant co-borrowers on FHA loans. HUD allows non-family members to become co-borrowers. If you are not related to the borrower by blood, marriage, or blood, you need a 25% down payment. In this blog, we will discuss HUD vs Fannie Mae non-occupant co-borrower guidelines and the eligibility requirements. HUD vs Fannie Mae non-occupant co-horrower guidelines are different than Conventional, USDA, and VA loans. Again, the main difference between HUD vs Fannie Mae non-occupant co-borrower guidelines is you do not have to be related by blood, law, or marriage to be a non-occupant co-borrower on conventional loans. Close friends, relatives, and co-workers can become non-occupant co-borrowers on conventional loans. Click here to get more about Fannie Mae Non-Occupant Co-Borrowers
Purpose For Non-Occupant Co-Borrowers
There are instances where home buyers may not have qualified income where they do not qualify for a home mortgage. HUD, Fannie Mae, and Freddie Mac will allow non-occupant co-borrowers to be added to the main borrowers’ mortgage note if the main borrower does not meet the minimum debt-to-income ratio requirements. However, the huge difference between HUD vs Fannie Mae non-occupant co-borrower guidelines is the following, explains Dustin Dumestre of F1 Lenders:
Unfortunately, non-occupant co-borrowers on FHA loans can only be a co-borrower that is related to the main borrower by law, marriage, or blood.
HUD does allow non-occupant co-borrowers to become co-borrowers who are not related to the main borrower by law, marriage, or blood. You can become a non-occupant co-borrower who is not related by blood, law, or marriage, but you need a 25% down payment. Fannie Mae is the government-sponsored enterprise (GSE) that sets mortgage guidelines on conventional loans. Big difference between HUD vs Fannie Mae non-occupant co-borrower guidelines is conventional loans allow non-occupant co-borrowers but co-borrowers do not have to be related to the main borrower by law, marriage, or blood on conventional loans.
HUD vs Fannie Mae Non-Occupant Co-Borrower Guidelines vs VA Loans
The United States Veterans Administration does not allow non-occupant co-borrowers. Only spouse of the veteran borrower can be the co-borrower on VA loans. USDA loans does not allow non-occupant co-borrowers. Only the spouse of the borrower is allowed to be the co-borrower on VA loans. Both the borrower’s and non-occupant co-borrowers incomes are combined. If both incomes meet the maximum debt-to-income ratio required, then the borrower can proceed with the mortgage process. The lower of the two borrowers’ middle credit scores are used. We will discuss HUD vs Fannie Mae Non-Occupant Co-Borrowers Guidelines versus other loan programs in this blog.
HUD vs Fannie Mae Non-Occupant Co-Borrower Guidelines vs Other Loan Programs
HUD Non-Occupant Co-Borrower Guidelines allow for multiple non-occupant co-borrowers on FHA loans. To qualify for a 3.5% down payment FHA loan with a non-occupant co-borrower, the non-occupant co-borrower needs to be related to the main borrower by blood, law, and marriage. HUD, the parent of FHA, has strict regulations on who can be non-occupant co-borrowers for a 3.5% down payment home purchase FHA loan. Dustin Dumestre, CEO of F1 Lenders and an associate contributing writer of GCA FORUMS says the following:
HUD allows for non-occupant co-borrowers who are not related to the main borrower by blood, marriage, or law. If the non-occupant co-borrower is not related to borrower by law, blood, or marriage, then a 25% down payment is required on FHA loans.
You cannot have non-occupant co-borrowers on VA and USDA loans. Fannie Mae and Freddie Mac have the following non-occupant co-borrower guidelines. Borrowers can add non-occupant co-borrowers on conventional loans. Non-occupant co-borrowers do not have to be related to the main borrower by law, blood, or marriage. For more information on this topic and/or other mortgage-related subjects, please contact us at GCA FORUMS Mortgage Group at 800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays. Click here to apply for mortgage loans with us
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