Conventional loan with brother-in-law as a non occupant co-borrower

As I stated in a previous post.. NO... Conventional only allows non occupant co borrowers for parents cosigning for their children. This product is called "Kiddie Condo" financing, as it was intended for parents to purchase a home for their children while they are away at college, although it's been used for other purposes, the general guideline is that it's only allowable for a parent cosigning for the child.. Her only option is FHA, and there will be mortgage insurance unless she goes 15 year financing and puts a minimum of 22% down.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

first , she needs to establish her self in a business 2 yrs for self employed, tax returns.... what size loan are we talking about?? where does she live, verus you and your husband??? you can email me at yourloanpartnerforlife@live.com

Let me revise my answer.... FNMA will allow a relative to cosign as a non owner occupied co borrower, however under the rules, the people who will be occupying the property has to show income.. if you have a new business, and cannot produce 2 years tax returns reflecting income, then it will be denied.. FHA rules are different, and will allow the occupants to have no income, so long as the income from the non occupying co borrower is sufficient to satisfy his debt, the occupying borrower's debt, and the new housing payment... The best way around this rule for Conventional financing is to purchase the property as an investment. The interest rate will be a little higher, but there will be no MI, however they will look at the COMBINED debt, and COMBINED income and determine the ratios from there... total DTI must be 35/43% or lower... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

FHLMC allows a non-occupant co-borrower and will consider all debt/income in the qualifying equation. BUT... specific requirements must be met regarding your sister's self employment. More information would be needed to determine if those requirements can be met. William did have a good idea of buying it as an investment property. Rate would be a little higher but would give your sister time to establish herself with her new business and ultimately refinance to remove your husbands obligation from the debt. In addition. you would want to consider how this additional debt could impact your financial situation and ability to qualify for future financing. Would be happy to discuss further with you. Lynn Bossi Kinsel NMLS#259819 Patriot Mortgage, Laurel, Md Licensed in VA, MD & DC