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Co-Borrower and Down Payment Assistance

by Gwen
(Pine Bush NY)

Hello. I am permenately disabled and want to purchase a home. My income is very low and my mom is going to cosign on the loan. Is it true that I cant get down payment and closing cost assistance for a fha mortgage if I have a cosigner? I live in the Hudson valley in ny and my income is only $1024 a month! So my mom has to cosign i cant get a mortgage any other way. Please help. Thank you



Comments for Co-Borrower and Down Payment Assistance

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Down Payment Assistance With a Non-Occupant Co-Borrower
by: Jeffrey

Hello Gwen,

Thank you for coming by my website to ask your question.

You mentioned that your mother would have to be a Co-Borrower with you on a mortgage since you're on disability income.

I suggest you talk with a loan officer that is an expert with FHA mortgages. Here's a page on my site where you'll find some links to help you.

I researched the FHA Mortgage Credit Analysis Handbook 4155.1. I think you need further clarification. It says:

"4155.1 2.B.3.b
Maximum LTV for NonOccupying
Borrower Transaction

When there are two or more borrowers, but one or more will not occupy the property as his/her principal residence, the maximum mortgage is limited to 75% loan-to-value (LTV). However, maximum financing, as described in HUD 4155.1 2.A.2, is available for

- borrowers related by blood, marriage, or law, such as

- spouses
- parents-children
- siblings
- stepchildren
- aunts-uncles, and
- nieces-nephews, or
- unrelated individuals who can document evidence of a longstanding, substantial family-type relationship not arising out of the loan transaction.

Note: If a parent is selling to a child, the parent cannot be the coborrower
with the child, unless the LTV is 75% or less."

Since down payment assistance programs vary from state to state and county to county that would be a whole other story.

Your first issue is to find out what the max LTV is for your mortgage. Some may say it is 75% while others may say 96.5%.

Once you know how much your down payment will be, then I would look into the grants and/or down payment assistance programs.

Hope this helps.

Regards,

Jeff

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