Non-Occupant C0-Borrower

More and more borrowers are being approved for their new home purchase and refinance loans by utilizing a non-occupant co-borrower. AKA, “non-owner occupied co-borrower” The most common reason for utilizing a non-occupant co-borrower is to reduce the primary borrowers’ debt-to-income (DTI) ratio to below 50%. Exceptions made to 55% with compensating factors such as available reserves, length of employment, credit depth among others.

Different lenders have their own unique guidelines. However, most require that the  loan is for a single family residence (SFR), owner-occupied to a maximum loan amount of $2,000,000 and loan-to-value (LTV) of 85%. Available liquid assets required for down payment, closing costs including reserves do not have to come from the primary borrower. These monies can come from the non-occupant co-borrower or be a combined contribution from both borrowers. The additional borrower must be an immediate family member. Reserves requirement is increased to between 3 to 6 months reserves depending on the overall qualifications of the borrower and co-borrower.

The mortgage industry is ever-evolving. Stay tuned for updates as they become available.


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