I’ve written about the Family Opportunity Mortgage for purchases where certain circumstances allow one to obtain a mortgage for a family member who is either a student in college, a disabled adult child or an elderly parent. The Family Opportunity Mortgages allows financing to be treated as a primary residence instead of an investment property as long as the scenario meets certain guidelines. The Family Opportunity Mortgage is a Fannie Mae/Freddie Mac program that is also available for refi’s!
I’m currently working with a client who wants to refinance a home she owns that her elderly parents are living in. The Family Opportunity Mortgage allows for her parents to be able to live nearby and not have to meet the requirements of a second home (typically a minimum of 50 miles away from your current residence) or the higher interest rate and cost associated with an investment property.
Here are some of the requirements for the Family Opportunity Mortgage when an adult child is refinancing (or buying) a primary residence for an elderly parent:
- Elderly parents must be unable to work or have insufficient income to qualify for the mortgage;
- The parent must occupy the property as their primary residence;
- The adult child may own their own primary residence;
- Only “rate term” refinances are allowed. Cash-out or paying off non-purchase money second mortgages/HELOCs are not allowed;
- Parent may be on the mortgage or the deed but is not required to be;
- A written letter of explanation will be required from the adult child addressing the parents limited finances and intent with the home.
As of the publishing of this post, I’m quoting 3.625% for a 30 year fixed Family Opportunity Mortgage refinance (apr 3.717) based on 720+ credit scores. The $250,000 loan amount will have a principal and interest payment of $1,140.13 which will drop my client’s mortgage payment by $400 a month!
We are pleased to be offering the Family Opportunity Mortgage at Mortgage Master Service Corporation. If you would like a mortgage rate quote for a refinance or purchase on a home located anywhere in Washington, click here.