You can buy a second primary residence for your parents!

Ill be honest, I’ve been doing mortgages for over 15 years and I don’t know it all. Its the crazy thing about this business. The amount of nuance between each loan program, what you can do and can’t do and what changes is amazing!

This is a beautiful nugget though that I’ve actually just discovered!

Fannie Mae through conventional financing actually allows you to buy a second primary residence for your parents.

So what does this mean exactly, to be able to buy a second primary residence?

It means that you can put as little as 5% down on another home for them. A second home requires 10% down and an investment property requires 20% down.

Additionally you get an interest rate that is much more competitive than an interest rate for a second home or an investment property. The rate will be priced just like another primary residence of your own.

This potential home can be right next to your home, or if you don’t want them that close it can be across town or in another state. It doesn’t matter. Location doesn’t matter.

What else do I need to know about buying a home for my parents?

You will need to qualify for the full payment. If they want to pay you some rent or help out that’s fine but you must have the room in your debt ratios to qualify for the new home. Also your parents can be on the title of the home, that’s fine.

This is for conventional financing only, you can’t use FHA financing, VA, or USDA financing and buy an additional primary residence.

This provision is in place to help make it easier for children to support their parents at any age. Its actually one of the more friendly guidelines Fannie Mae has ever put out. The same goes actually for parents who want to buy a home for a child who is disabled. In that case a parent can buy a second primary residence as well, the child has to be disabled and it must be documented.

So what do I do if I want to buy second primary residence for my parents?

Really the next step to see if you can buy a second primary home for your parents to is to get pre-approved! We would just look at your income and credit and make sure you qualify. It’s an honorable thing to do if you can afford it! We are here to help in any way we can.

If you don’t want to bear the full burden, you can always be a non occupant co-borrower for your parents. In that way they are buying the home as their primary residence. If they can’t afford the whole payment, you can help as a non occupant co-borrower. We can help figure out the best solution for your needs. If you would like to get started you can do so with the link for a pre-approval below.