The FHA “Kiddie Condo Program” is a nickname given to the FHA loan program where mortgage guidelines allow an FHA lender to work with a non-occupant co-signer to qualify for the loan. The actual occupant of the home does not have to have employment, income or assets. However, the occupant’s credit must meet FHA’s qualification standards.
The “program” became popular as a method for parents who were sending their children away to college to buy them a home (or condo) to live in as opposed to paying rent – hence the nickname “kiddie condo”. However, the occupant is not required to actually be a college student.
Note: The property does not have to be a condo.
 
Consider the following scenario:
Daughter or Son will be attending College
Current rent for a decent 2 bedroom 1 bathroom apartment is around $850
There are currently hundreds  homes listed for sale within 1 mile of most Colleges. 
A home selling for $100,000 would have a total monthly payment around $760.00
FHA “Kiddie Condo” program allows the parent to buy the home with as little at 3.5% down ($3,500)
Seller pays the majority – if not all – of the closing costs (max seller concession towards closing costs is 6%)
Child lives in home for 4 years. The down payment spread over 4 years equates to $73 a month
*Bonus*
Now consider the cost savings if the occupying child rents out the extra bedroom for $300 a month. In this scenario, they will be paying a net amount of $557 a month and own the home. If more bedrooms your child could live rent free!
A parent should consider using the FHA “Kiddie Condo” program and taking advantage of the current FHA interest rates and low housing costs when determining how to efficiently help send their child to college. *Consult your Tax advisor for tax advantages

---

Apply Now

Return to Loan Options