A Home of Their Own for Students, Thanks to Mom and Dad

House with Paved Walkways

With the school year starting, new college students and their parents are discussing off-campus housing. So now’s the perfect time to consider the FHA’s non-occupant co-borrow program – also known as the Kiddie Condo program.

Kiddie Condo Program

This program allows a student and his or her parents to purchase a home for the student to live in at terms comparable to those incurred if the student were to purchase a home himself. The difference is that the student doesn’t need a down payment or the income to qualify.

This is good news for both parents and the students; the only other way to purchase a home for their student is to obtain a conventional mortgage and make a 20 percent down payment.

Qualifying

The purchased property must be a single-unit dwelling, but the student is permitted to have roommates to assist with the mortgage payments and other expenses of maintaining the property.

The student must be at least 18 years of age, and needs to have some type of favorable credit history. In fact, both parent and student will undergo a credit check. Parents with a credit-challenged student can list him or her as an authorized user on their accounts, which gives the student the benefit of their good credit.

Win–Win

The advantages: the student builds a strong credit history, and parents will enjoy tax benefits, providing they are paying the mortgage; the IRS rules that whoever pays the mortgage receives the tax benefit.

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