Helping your college student buy a home? FHA is your lender

With current house prices being at 10 years lows, many parents are finding it cheaper to buy their college student a home while they are in college. Formally know as the “Kiddy Condo” loan FHA allows for a minimum of 3.5% down payments for these loans. The Parent and Student are both on the loan and have title to the home. They Student must have sufficient credit and must be enrolled in school in the area of where the home is being purchased. The parents must also qualify for the loans and prove they can afford the new payments for the home.


FHA rates are currently in the low 5’s for fixed rate mortgages. The low rate in combination with the minimum down payments makes the FHA loan very attractive to buyers. I recently financed a home for a college student and parents who were paying rent for a house. They purchased a $160,000 home near the University of Arizona campus. Their total payments were under $1100.00. This was very attractive because next year their other child is going to the University of Arizona and will be living in the home.


Buying a home right now is a great investment in college student’s futures as home owners. After the school year many home around the University area will go on sale. It is smart to be pre approved for this loan before you go shopping. FHA has changed their guidelines for these “Kiddy Condo” type loans last years and you should work with a loan officer who is experienced in these transactions. While you can not count income from roommates to qualify for these loans, many clients rent out a room to off set the cost of home ownership. These loans are not for investments properties, the student must live in the property.


With FHA rates under 6% and currently near 5% parents who have these types of loans or any FHA loan should take advantage of the FHA Streamline refinance which allows the borrowers to refinance the balance of their loan to a lower rate without a new appraisal or going through the whole underwriting process. Take advantage of these great rates on FHA loans today.