Buying home for children to rent

You should purchase this property as a co-signer with your child(ren) as their primary resident to avoid the higher interest rate and cost and you can always either sell it or gift it to them. this way you are also subject to the tax benefits where as it wouldn't be applicable to you under Non-owner occupied properties.

An investment property (if it will be rented it must be considered an investment property, especially if located near where you live) can be purchased with as little as 15% downpayment for a conforming loan, of course provided all other qualifications are met. An alternative is for you to cosign for them (allowed on certain loans, FHA allows 3.5% downpayment) as long as their credit meets minimum requirements. I can help: pdumouchel@primelending.com or 843-619-6025 http://pdumouchel.primelending.com **PrimeLending was #4 purchase mortgage lender in the US in 2012 and 2013 as determined by MarketTrac(c) for Jan-Dec 2012 & 2013

You can do FHA as a non occupant co borrower for your children. You can also do Fannie Mae as second home if you meet other requirements. Sometimes these programs are referred to as Kiddie Condo loans.

I agree with Chris. FHA allows non-occupant coborrowers, so you could purchase with your children with as little as 3.5% down payment as long as the kids will live there. Speak with a lender directly for further clarification and qualifications.

Hi Lynn, there should be no law against what you can do with property you own as long as it is for a legal purpose. My suggestion is that you speak to your Accountant/CPA to see how this can benefit you from a Tax Standpoint and then start working with your children to set a goal as to when they will be able to purchase the house and for how much as you will have some tax consequences on any profits earned from the sale. Again, speak to your Tax Professional so you can have all the facts in hand from their perspective. Good Luck!

If you will be renting out the home (even to your children) it would be considered an investment property. With an investment you would likely need at least 15% down. Or another option would be to secure an FHA loan with a non-occupant co-borrower and put as little as 3.5% down.