The following is a guide for borrower/title relationships allowed for conventional, FHA and VA loans.
• There does not need to be any relationship between occupant borrowers on a loan.
• A person may be in title without being a borrower on the loan.
• There should be a documentable relationship between borrower and a non occupant co-borrower.
• Co-borrowers who does not take title to the property are allowed (occupant borrower must meet self sustaining debt-to-income ratio requirements).
• Non occupant co-borrowers are not allowed on LTVs above 80%
• An individual may be on title without being on the loan.
• Unrelated occupant borrowers are allowed, but a motivation letter explaining the relationship between the parties may be required.
• For non occupant co-borrowers, there must be a family or otherwise long standing family type relationship which can be documented between the non occupant co-borrower and an occupant borrower in order to be eligible for maximum financing.
• Co-borrowers who do not take title to the property are allowed.
FHA permits max 96.5 financing with a non-occupant co-signer only on 1 unit properties. If it is a 2 to 4 unit property, with NON-occupant co-signer, FHA requires 25% down payment.
• For max financing (generally 100%, depending on loan amount) without further review by the VA, the only allowable co-borrower is the Veteran’s spouse.
• A Veteran’s spouse can be in title, but does not have to be a borrower on the loan.
• No one other than the Veteran’s spouse can be in title, without being on the loan.
• If the co-borrower is not married to the borrower, the non veteran borrower must meet minimum down payment requirements on their portion of the loan, and the loan must be reviewed and approved by VA after review by our Underwriter.
• If borrowers are not married, but both have VA eligibility, the loan must be submitted to the VA for approval of joint eligibility.
• Non occupant co-borrowers are not allowed on VA.
REGARDLESS OF LOAN TYPE, ANY INDIVIDUAL WHO WILL BE IN TITLE MUST BE LISTED ON THE SALES CONTRACT.
(Or added to agreement of sale with acceptable fully executed addendum to agreement of sale, approved by lender and the title company prior to closing).