If you want to help a family member get into a home but they can’t qualify for a mortgage, a family opportunity mortgage (FOM) may be the solution. This unique loan program allows borrowers to purchase a home for a parent, child, or grandchild while still qualifying for the best terms.
What Exactly is a Family Opportunity Mortgage?
A family opportunity mortgage lets a borrower buy a home that a family member will live in. The borrower is considered the owner-occupant even though they won’t reside in the home. This allows the borrower to qualify for lower down payments and interest rates as if they were buying a primary residence instead of an investment property.
Requirements to Qualify for a Family Opportunity Mortgage
To qualify for a family opportunity mortgage loan, the borrower must:
- Have a good credit score and manageable debt-to-income ratio
- Be able to make monthly payments on their own home plus the FOM property
- Be purchasing for a parent, adult child, or adult grandchild
- Have a family member unable to qualify on their own
The FOM property can be used as the family member’s primary home, second home, or rental investment. The borrower takes responsibility for all mortgage and other costs.
Benefits of Family Opportunity Mortgage Loans
FOMs offer several advantages compared to conventional investment loans:
- Lower Down Payments – As little as 5% may be required
- Lower Interest Rates – More favorable than investment loan rates
- More Flexibility – Can be used for primary residence, second home, or rental
A Family Opportunity Mortgage allows families to help loved ones achieve homeownership when they can’t qualify independently. They can also assist elderly parents who need help with housing.
Ready to Learn More?
If a family opportunity mortgage sounds right for your situation, consult with a lender to get pre-approved and learn more about qualifications and requirements. This unique loan program opens up homeownership possibilities for families.
