Affording a home for your college student to live in while they attend school can be expensive.
A home that is not “owner-occupied” may be viewed as an investment property. Mortgages for investment properties generally have higher interest rates and can even require a full 20% down payment. Understandably, a large down payment for a college pad on top of tuition costs may not be in your budget.
The Family Opportunity Mortgage Program
A unique option that can reduce costs and help you provide a home for your scholar who’s working hard towards completing their degree. A home loan through this program is treated as a mortgage for another primary residence which makes it less costly. We compiled an overview of what you need to know about the mortgage program if you’re interested in applying.
Guidelines for Parents of Students
The Family Opportunity Mortgage Program lets you purchase a condo or single-family home for your student. Here are the basic eligibility requirements:
- Your student has to prove enrollment in a school that’s close to the property you’re buying
- You can’t already own a vacation home close to the school
- Your present home has to be a certain distance away from the school and property
- Your student needs to stay in the property you purchase for at least a year
Your student’s name will not be on the loan application. Instead, you and/or your spouse will go through the typical credit check and underwriting process to purchase the home under your name.
Parents With Disabled Children or Adults With Elderly Parents
It’s worth briefly mentioning that the Family Opportunity Mortgage Program can also help you obtain a mortgage for a property that will be occupied by your disabled adult children or aging parents. In fact, this program may come as a relief if a close family member can’t get a home loan on their own, but they crave independence. To qualify for this program, your child or parent must not earn enough income to qualify for a mortgage themselves. Please contact an ACM Lender for complete loan qualification information.
Are you interested in a Family Opportunity Mortgage for your student?
The Mid-Atlantic region is home to many prestigious schools; and college communities are known for their schools and relatively high rental rates. You may find it’s a better idea to study the market and invest in a property rather than dish out many years’ worth of rent.
We can help you crunch the numbers so you can decide if buying a property in the area is the right decision for you.