FHA has a program that many parents have used if they have kids in college to help cut the cost of housing. FHA will allow a family member to be a "non-occupant co-borrower" as long as the borrower is living in the house. It doesn't have to be a condo, it can be a single family house or a townhome. For that matter, the loan works for anyone that wants to buy a home, but needs help in qualifying! You don' t have to be in college.
This allows a borrower to buy a home with 3.5% down and for parents with kids in college, it may make more sense. All borrowers must have good credit (a minium score of 640), the down payment and the seller can pay the closing costs. You have to qualify with all your debt, including your primary residence and any student loans that may have been taken out. Everyone on the loan is responsible for the payment, so you will want to make sure the mortgage payment is made on time.
Depending on where your child is going to school, it may help your housing situation and that may help cut the costs of college. With home prices being down and interest rates down, it may be a great way to cut the housing costs. Plus once your child is done with school, you can sell the house and hopefully make a profit. Depending on the situation, you may be willing to give that money to your child to help them with their new house (or part of the money!).
For the student, it may help their credit and also gives them the knowledge of what it takes to own a home!! If you have a student looking at schools for next year (or currently in school), this may be a great time to look into buying a home for them to live in. If you have just graduated or are just looking for a home, this may still be a great loan for you if your parents are willing to be on the mortgage with you.
