Get an FHA Kiddie Condo With Your Student

As summer begins to wind down and your college student is starting to think about the new school year, it’s time to consider just where your school-bound offspring will live.

Luckily, the Federal Housing Administration (FHA) has a great idea for you.

For several years now, the FHA has been offering an excellent program nicknamed the “kiddie condo” program. This allows you and your college student to purchase a home as the student’s primary residence.

Typically if you were to buy a home for your student to live in while away at school, you would have to purchase it as an investment property, with a higher down payment and higher interest rate than if you’d purchased a principal residence.

The kiddie condo program allows you to buy a home for your student with a lower down payment and at a lower rate.

In order to qualify for the program, the parent’s and the student’s credit are both important, even when the parent is paying for it.

Whether or not the student has a job, he or she still needs to be able to demonstrate the ability to manage credit. So a student without credit will have to get a small loan or credit card and stay current with the payments.

The program can be very beneficial to all involved. Your student will have current mortgage payments on their credit report when they graduate, and you may be able to writeoff the interest and property taxes as long as you own the property.

You also may be able to offset the mortgage payment by subletting one or more of the rooms to other students; even a small amount of money each month multiplied over time can add up to big savings off the mortgage.