Financing a “Kiddie Condo” for your College Student


A few weeks ago, I helped a Kent couple purchase a condominium located in Seattle for their daughter to live in while she attends college at Seattle University. They were prequalifed with their credit union, however the credit union was treating the transaction as if it were an investment property even though the couple (we’ll call them Mr. and Mrs. Kent) were not going to rent the property.

You see most lenders require that a home be located at least 50 miles away before it can qualify as a second home.  The city of Kent is just over 20 miles away from Seattle. Some lenders may even require that a second home meet conditions that one would consider a “vacation” property. It can really boil down to the underwriters interpretation of the actual scenario.  If a home does not qualify to be treated as a second home, then it’s likely to be considered an investment property which has higher interest rates, closing costs and tougher underwriting criteria.

The Family Opportunity Mortgage is a special Fannie Mae/Freddie Mac program that we have available at Mortgage Master Service Corporation. It allows for this type of scenario to be treated as a second home as long as:

  • the property is a reasonable distance from the parent’s home
  • the parents may not own a second (or vacation) home near the subject property
  • the child is enrolled in a nearby college
  • the property may not be rented or used as an investment property
  • the child occupies the property for a minimum of one year

We were able to provide Mr. and Mrs. Kent with a much lower “owner occupied” rate for the condo they purchased for their daughter where the credit union could only offer a non-owner occupied rate.

For your personal rate quote on a home located anywhere in Washington, please contact me.


  1. What a great idea for a loan program! Good job Mortgage Master Services! Now, Rhonda, what happens after a year if the student decides to change schools and no longer lives in the condo? Can the property be rented at that point and still have the same program & terms, etc? Or?? I doubt there’s any ‘loan police’ for this, but parents may have the question.

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