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As mentioned in earlier posts, you will be responsable for the new loan. Now you can be a non-occupant co-signer and use an FHA loan or for a conventional loan, 5% has to be her own funds. You cannot use your money for the down payment since it must be from a relative.
You were not clear about where this $600 figure is coming from. Do you need to pay off the student loan for qualifying? Are the student loans currently differed for more than 12 months? If so, the payment wil not be used for an FHA loan.
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