If you’re like many families, you may find yourself in the position of wanting to help your elderly parents live closer to you. Purchasing a home for them can be a great way to provide them with care and support, but traditional mortgage products might not be an option for them. That’s where the Family Opportunity Mortgage comes in—it’s a loan specifically designed to help children purchase or refinance a home for their parents. Let’s take a look at what this no closing cost mortgages is, who can qualify and some of its advantages!
What Is A Family Opportunity Mortgage?
The Family Opportunity Mortgage is a loan offered by Fannie Mae that allows children to purchase or refinance a home for their elderly parents. In order to qualify, the child must be an adult (18 years or older) and either be purchasing the home as their primary residence or refinancing an existing property. The home must also be owner-occupied, meaning that the elderly parent must live in the home as their primary residence.
Requirements to Qualify for a Family Opportunity Mortgage
In order to qualify for a Family Opportunity Mortgage, there are a few requirements that must be met.
● The child must be an adult (18 years of age or older) and be able to provide proof of income.
● The home must be owner-occupied– meaning that the elderly parent must live in the home as their primary residence.
● The child must also have a good credit history and a down payment of at least five percent of the purchase price.
● The child must either be purchasing the home as their primary residence or refinancing an existing property.
Advantages Of A Family Opportunity Mortgage
There are a few advantages of using a Family Opportunity Mortgage to purchase or refinance a home for your elderly parents.
One advantage is that the child does not have to be a co-borrower on the loan—meaning that their income and credit history will not be taken into account when qualifying for the mortgage. This can be helpful if the child does not have a strong credit history or income.
Another advantage is that the interest rate on the loan will be lower than most traditional mortgage products. This can save the family money over the life of the loan.
Lastly, there are no monthly mortgage insurance premiums required with a Family Opportunity Mortgage – which can further reduce the monthly payment.
What If You Don’t Qualify For A Family Opportunity Mortgage?
If you don’t qualify for a Family Opportunity Mortgage, there are still other options available to help you purchase or refinance a home for your elderly parents.
One option is to get a co-signer on the loan—this can be another family member or friend who meets the requirements to qualify for the loan.
The child co-sign on a traditional mortgage product. This can help the elderly parent qualify for a lower interest rate and lower monthly payment.
Alternatively, look into state and local programs that offer down payment assistance or other financial help for families looking to purchase a home for an elderly parent.
Another option is to have the child purchase the home outright and then lease it back to the parent. This can provide the family with some flexibility and allow the parents to stay in their home even if they are unable to make mortgage payments.
Lastly, you could consider taking out a personal loan to help with the cost of purchasing or refinancing a home for your parents. This is usually a last resort option, as personal loans typically have high-interest rates.
We hope this has been helpful in understanding the Family Opportunity Mortgage and how it can help you purchase or refinance a home for your elderly parents! If you have any questions, please don’t hesitate to reach out to us. We’re here to help!