Profile picture for d3davis

Family Opportunity Mortgage in 2013?

I have two questions I'm hoping one of you brilliant mortgage experts will know the answers to. 1) Is there still such a thing as a Family Opportunity Mortgage Program? We need to buy a home for elderly parents in a desperate situation (no money and no assets), and we're hoping to be able to get it at "second home" interest rates instead of "investment property" rates. Their names will not be on the mortgage or deed, and there's no way they could pay rent. Does anyone know if that's still possible? And 2) how difficult is it to get a mortgage loan for under $50k? I've read that most banks don't want to do that, but we have found a house that will meet their needs for less. We have 20% down for that one. Thanks so much in advance for any input/advice. 
  • August 11 2013 - Austin
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (13)

Profile picture for Tim Lucas
Hi Mr. Davis,
My best advice is to find a lender that sells directly to Fannie Mae and has very few "overlays," meaning extra rules beyond what Fannie Mae requires. Fannie Mae rules state you can in fact buy a home for low-income elderly parents, and do it as an owner occupied loan (which is even better than a second-home loan).

As editor of the
[website removed by Zillow because of self promotion.  Please refer to our Good Neighbor Policy]

I wrote an article about this subject and there seems to be a lot of interest.

The trouble may be finding a lender who goes strictly by Fannie Mae rules. The fact that you have 20% down helps - you won't have to deal with private mortgage insurance companies.
The loan amount may be a challenge, as some lenders charge higher fees for sub-50k loans, or don't do them at all. They're not profitable with the new mortgage rules that are in place.
Keep calling around. Try medium sized banks because they have a good chance of being able to sell direct to Fannie Mae, but have minimal overlays like many bigger banks do. Good luck!
  • October 02 2013
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

In order for a home to qualify as a second home, it has to be located within a certain number of miles from your homestead, I believe it's 50 but a mortgage broker should be able to confirm.

You can get a loan for under 50K but the rate and closing fees will be high because they won't be able to make much money on it.  You should look at the bank that you do your regular banking with, may be a credit union too.

Naima

  • October 02 2013
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Brookstone Mortgage
Excellent answer Tim, you nailed it. This is easily accomplished with a conforming loan and the hurdle is indeed the loan amount. 

As for this answer: 
"In order for a home to qualify as a second home, it has to be located within a certain number of miles from your homestead, I believe it's 50"

There is no number of miles a second home has to be from your primary residence, guidelines say "a reasonable distance." What's reasonable to one is not reasonable to all so obtaining second home financing takes finesse and good explanations. I have obtained financing as a second home for a property that was next door. 
  • October 03 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Chase is the only company I know still offering any sort of "Family Opportunity" mortgage, which lets you buy another home for your college student or elderly parents - both of whom would not qualify on their own.

THERE IS NO DISTANCE REQUIREMENT...  There actually isn't on standard second homes either.  Many people say 50 miles, but that is not true... The rules requires a "does it make sense" that it is a logical second home location.

The loan is treated like a second home... so you get the standard versus investment property interest rates
  • November 01 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I had an iquiry about this loan yesterday.. The realtor asked if we offer the program and to be quite honest I had never heard of it. I have been doing as much research as possible but in my scenario they have 20% down and will be primary residence etc. They don't own any other homes etc. But the Realtor told me that the interest rate is lower than your normal conventional rates..??? Is this true ?
My first thought was do just do a normal conventional loan with 20% down. But I am being told it is the interest rate that is the benefit to the borrower..
Can someone that knows this program let me know if this is the case ?

Appreciated..
  • November 25 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

@Vernon:

But the Realtor told me that the interest rate is lower than your normal conventional rates..??? Is this true ?

No.

But I am being told it is the interest rate that is the benefit to the borrower..


It is, it is because they do not have to finance as an investment property. Maybe the Realtor should place the loan with the Lender feeding them this misinformation, would be interesting to see their quote at 3.5% without 5 discount points.....
  • November 26 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Can this loan program be done as a 5% down conventional ?
  • December 11 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Chase still offers the Family Opportunity Mortgage and you can put 5% down on a single-family or condo.
  • December 12 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

We are in a small town and we have found some local "small town" banks have more flexibility.
  • December 12 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for jfcloans
I have closed a Family Opportunity Mortgage with 5% down for elderly parents. Yes it can be done!
  • January 06 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for irish87a
Just got off the phone with Chase asking about the Family Opportunity Mortgage.  They ended the program in mid-January.  It is no longer available.
  • February 06 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Harbor National Bank Wholesale/Correspondent offers Family Opportunity, we sell directly to FNMA with no overlays.  For more information, contact me.
Chad Gilmore 
[Contact information removed by Zillow moderator.  Please refer to our Good Neighbor Policy
  • September 11 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for scott7619
Is anyone doing Family Opportunity Mortgages in Florida?  We need to buy a  home for a disabled adult son.
  • September 30 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.