There are several ways to provide housing for a disabled adult child. In addition to living with parents or assisted living, some parents desire to purchase a home for their child to live in. Thus, we explain how to buy a home for an adult handicapped or disabled child. In many cases, the child may not have credit or enough income to qualify on their own or even with a cosigner.
But, what if I told you there is a product that allows 5% down payment and only a parent has to be on the loan? Thus, the child is able to have a level of independence without having to qualify for a mortgage loan. Furthermore, instead of using an investment property loan, parents are able to qualify for primary residence interest rates and low down payment. The result is a lower interest rate and down payment.
Guidelines to Buy a Home for Adult Disabled Child
First of all, there is nothing wrong with buying a home as an investment property for an adult child. But instead of a 20 – 25% down payment and paying a higher interest rate, take advantage of primary residence loan. You may be thinking, “How can I get a primary residence loan for my adult child if I do not live there?”. Believe it or not, there is a little known guideline we can use that treats this as a primary residence purchase. Even though the parents buying the home will not live there!
So, the mortgage guidelines state, if the child is unable to work or does not have sufficient income to qualify for a mortgage on his or her own, the parent or legal guardian is considered the owner occupant. Since, the parent does not have to live there and the purchase is considered owner occupied, that is where the better terms come into play. Fortunately, the parent(s) are able to use the following benefits…
If the child is unable to work or does not have sufficient income to qualify for a mortgage on his or her own, the parent or legal guardian is considered the owner occupant.Russell Smith
5 Benefits of Buying a Home for a Disabled Adult Child
- 5% minimum down payment
- Primary residence interest rate
- Mortgage insurance options include monthly, single premium, or split
- Buyers do not have to occupy the home
- Down payment may be a gift
Buying a Home for Parents
Today people are living longer and it is common for children to support their parents. Although the parents may have income, it may not be enough income to qualify on their own. Rather than parents living with their adult children, the child may buy a home for parents using a primary residence loan. Just like buying for an adult child, the same type of exception is made.
That’s right, buy a home for your parents with as little as 5% down payment, a primary residence interest rate, and both families still keep their independence. Whether buying a home next door or across the country, this little known program gives both parent and child independence while being easier on the finances.