Second Home for College
Call us for a Free Consultation today! 225-900-7447
Second Home for College
If you want to help your child buy a home for the first time, then you need to understand the Family Opportunity Mortgage Program.
The little-known option lets people obtain mortgage financing for a college-bound child, disabled adult child or elderly parent without the expense associated with purchasing an investment property.
What’s more, you’re NOT required to make a 20 percent down payment.
Here’s how the loan program works for the different audiences I mentioned.
A college-bound son or daughter can reside in a second home residence purchased by their parents. To do so, the child must be enrolled in college and the property must be within a reasonable distance to the school where the child attends.
The property needs to be a reasonable distance from the parent’s home and be the child’s primary residence. The key is that the parents apply and qualify for the loan. The child is not an applicant and does not factor into the qualifying for the mortgage. In that way, the parents own the property.
Here’s an example of how I have seen a parent take advantage of the Family Opportunity Mortgage Program. Earlier this year, I received a call from a mother whose daughter planned to attend a college in Louisiana. The mother said rent prices are high in the college town, and she preferred to buy a home that her daughter could live in during school.
Under the Family Opportunity mortgage, the purchase would NOT be classified as an investment property. That means the mother would not have to spend as much money on the down payment.
When you assess home buying for a child, it’s critical to know all of your options. This is why many parents in Louisiana are buying property for their college students. They find the investment can have real financial benefits for them, eventually turning a profit. They earn equity, eliminate landlords issues, and the purchase can be classified as a second home. The Family Opportunity Mortgage Program is a great one when you have unique living circumstances. Be sure to ask your mortgage broker about it when the time comes.