The short answer
Yes. FHA allows a family member to be a borrower on the loan without living in the home, and you can still put as little as 3.5% down. That applies to a one-unit home when the family member is not also the seller. In other cases FHA limits the loan to 75% of the value.
The rule
| Situation | Highest loan |
|---|---|
| The non-occupying borrower is a family member, one-unit home | 96.5% of value (3.5% down) |
| The non-occupying borrower is not a family member | 75% of value (25% down) |
| The home has two to four units | 75% of value |
| A family member is selling to you and will also be the non-occupying co-borrower | 75% of value |
Who counts as family
FHA's definition includes a parent, grandparent, child, spouse or domestic partner, brother, sister, uncle, aunt, and in-laws. Step, foster and legally adopted relationships are included.
What it means for your parent
- They sign the loan and are responsible for it, the same as you.
- The loan appears on their credit.
- Their income and debts are both counted.
- If the loan has more than one borrower, the lowest borrower's score is the deciding one.
Two examples at $500,000
- A single-family home, with your mother on the loan. She will not live there and she is not the seller. FHA allows a loan of up to 96.5%, so the minimum down payment is $17,500.
- A duplex, with your mother on the loan. FHA limits the loan to 75%, so the down payment is at least $125,000.
An illustration of the rule, not a quote or an offer.
Co-borrower or gift?
| On the loan as co-borrower | Giving a gift | |
|---|---|---|
| Parent's income counts | Yes | No |
| Parent's debts and score count | Yes | No |
| Parent is responsible for the loan | Yes | No |
| Paperwork | A full application from the parent | A signed gift letter and proof of the transfer |
A gift helps with the down payment. A co-borrower helps when your own income is not enough to qualify.
What can go wrong
- A duplex or larger. The 3.5% option is for one-unit homes only.
- No credit score. On a manual review of borrowers with no score, FHA does not count a non-occupant co-borrower's income.
- Down payment programs. Some do not allow this. CalHFA's MyHome says non-occupant co-borrowers are not allowed.
What I see in real files
Jamal's own words go here: two to four sentences on what he sees in real files like this. Claude does not write this part.
Questions people ask next
Does my parent have to be on the title?
To confirm in the handbook before publishing.
Can a friend do this instead?
A non-family co-borrower who will not live there limits the loan to 75% of the value.
Can my parent just give me money instead?
Yes. FHA allows gifts from family with a signed gift letter. See the FHA page