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Can a friend co-borrow on FHA loan

I read that there were some restrictions as far as who can co-sign for an FHA loan so can a friend indeed co-sign or is it strictly family?
  • April 10 2014 - US
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Answers (7)

Profile picture for The Mortgage Mark
FHA and Freddie Mac both allow Non-Occupant Co-Borrowers.  
  • April 11 2014
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This is a bad idea on many levels
  • April 10 2014
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Profile picture for wetdawgs
What is your goal for having a co-signer?     The co-signer should  know that your debt is also their debt for all financial calculations, and your defaults will appear on their credit report. 

Before having someone co-sign, I'd sit down and come up with an agreement on how they are going to be able to get out of it (such the strategy you plan to use and timing to refinance in your own name, plus what happens if you are not able to do so).  Make this a legal contract, perhaps using an attorney or get in notarized.   
  • April 10 2014
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Yes, your friend can co-sign as long as he plans to be living in the home as well. If not, only family members can be used as non-occupant co-borrowers. So if he does not plan on living in the home, then you will need to find a family member to cosign for you. Either way, the best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!
  • April 10 2014
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Profile picture for sunnyview
If you care about your friend at all, don't ask them to cosign. Keep your friend, fix your credit and stand on your own two financial feet when you buy.
  • April 10 2014
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It depends on whether they will be occupying the property or not.  A friend cannot be added a non-occupying co-borrower, but can be added if they plan on living in the house.  We often add unrelated co-borrowers to a loan, you just want to make sure its someone you trust well and will still be friends with in 30 years.  I would be happy to answer any questions you have on this topic through my profile above.  Thanks!
  • April 10 2014
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A friend is able to co-sign with you on your FHA loan.  They will have to qualify with their debt as well as yours, and they will be liable on the loan in case of default.
  • April 10 2014
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