Clay Johnson: Hey there, Clay Johnson, Castle and Cooke Mortgage, I am with Cheryl Knowlton with Dynamite Productions. We wanted to hit a little bit today on the FHA loan. We’ve talked a little bit about this in the past, but guys, there’s something that you need to know on this one that is absolutely incredible. And that is mom and dad can be a non-owner occupant co-borrower. A little bit of a tongue twister there. But they can actually come in, help qualify from credit and also from an income perspective. Not only that, it could be a sibling, another family member, step-sibling that can help and be a non-occupant co-borrower.
Cheryl Knowlton: Without changing the interest rate at all.
Clay Johnson: Yes, and that’s huge because typically that is going to affect the interest rate.
Cheryl Knowlton: Correct.
Clay Johnson: And so it gives them that opportunity to really open the doors of homeownership. And a lot of people, it makes all the difference having that available to them.
Cheryl Knowlton: Absolutely. And for FHA, remember they can get a single-family home, they can get a duplex, they can get a triplex or a fourplex. Anything above four units is considered commercial. But as long as they live in one of the units and intend to and live in that unit for at least 12 months consecutively, they can purchase a home using an FHA loan, even with a non-occupying co-borrower.
Clay Johnson: Yes. Now when you get like the duplex, triplex, fourplex, it does have an impact on the down payment.
Cheryl Knowlton: Yes.
Clay Johnson: But if they do it on their own, just three and a half percent down to buy a fourplex.
Cheryl Knowlton: Incredible.
Clay Johnson: It is incredible.
Cheryl Knowlton: Wow.
Clay Johnson: So yeah, and of course your loan amounts go up. It’s just a great thing associated with what you can qualify for by counting the rent as income as well.
Cheryl Knowlton: Which is ridiculous.
Clay Johnson: It is.
Cheryl Knowlton: So we will talk all this week about FHA, the magic that is FHA. So we will see you in the next episode.
Clay Johnson: Bye-bye.