A Guide to Buying a Home for an Aging Parent or an Adult Child with a Disability
In This Article
If you’re thinking about buying a home for an aging parent or an adult child with a disability, Family Opportunity Financing may be an option worth exploring.
In this article, you’ll learn how the program works, who it was designed for, and why it may allow eligible borrowers to receive owner-occupied financing instead of investment property financing.
Quick Answer
Family Opportunity Financing is a conventional mortgage option that may allow you to purchase a home for an aging parent or an adult child with a disability while receiving owner-occupied financing, even though you won’t be living in the home yourself.
For eligible borrowers, this may result in a lower down payment requirement, more favorable interest rates, and lower monthly payments than purchasing the property as an investment.
Let’s Take a Closer Look
What Is Family Opportunity Financing?
Family Opportunity Financing is a conventional mortgage guideline designed to help families provide housing for certain close relatives.
Rather than purchasing the property as an investment, eligible borrowers may qualify for owner-occupied financing when buying a home for:
- An aging parent who cannot financially qualify for a mortgage on their own.
- An adult child with a disability who cannot financially qualify for a mortgage independently because of that disability.
Although the borrower will not occupy the property as their primary residence, the loan may still receive owner-occupied financing if all program requirements are met.
Why Does This Program Exist?
Many families want to help aging parents remain independent while living closer to loved ones. Others want to provide safe, stable housing for an adult child with a disability.
Without this guideline, these purchases would often be treated as investment properties, even though the home isn’t being purchased as an investment.
Family Opportunity Financing recognizes that these situations are different and, when the guidelines are met, may allow the purchase to receive owner-occupied financing.
What Are the Benefits?
Depending on your qualifications and the loan program, Family Opportunity Financing may offer several advantages, including:
- Lower down payment requirements.
- More competitive interest rates.
- Lower monthly mortgage payments.
- Owner-occupied financing instead of investment property financing.
- The opportunity to help a loved one purchase or live in a home that better meets their needs.
Who Can Qualify?
Generally, this financing is intended for borrowers purchasing a home for:
- An aging parent who cannot financially qualify for a mortgage independently.
- An adult child with a disability who cannot financially qualify for a mortgage independently because of that disability.
As with any mortgage, the borrower must also meet the lender’s requirements for income, credit, assets, and the property itself.
Is This Considered an Investment Property?
No.
That’s one of the biggest advantages of this program.
Although you won’t be living in the home, eligible Family Opportunity transactions may still qualify for owner-occupied financing under Fannie Mae guidelines.
That distinction can make a significant difference in the required down payment, interest rate, and overall cost of financing.
Common Questions
Can I buy a home for my parents?
Possibly.
Family Opportunity Financing may be available when you’re purchasing a home for an aging parent who cannot financially qualify for a mortgage on their own and the transaction meets the program guidelines.
Can I buy a home for my adult child?
Possibly.
Family Opportunity Financing may be available when your adult child has a disability and cannot financially qualify for a mortgage independently. The lender will evaluate the specific circumstances and documentation to determine whether the transaction meets the program guidelines.
Do I have to live in the home?
No.
That’s one of the unique features of Family Opportunity Financing.
Although you won’t occupy the property yourself, eligible transactions may still qualify for owner-occupied financing if all program requirements are met.
Is a larger down payment required?
Not necessarily.
Because eligible Family Opportunity transactions may receive owner-occupied financing, the required down payment is often lower than it would be if the property were financed as an investment property.
Is this available through FHA or VA loans?
Family Opportunity Financing is most commonly associated with conventional loans that follow Fannie Mae guidelines.
Other loan programs have different occupancy requirements and may not offer this same financing option.
Bottom Line
Family Opportunity Financing can be an excellent solution for families who want to help an aging parent or an adult child with a disability purchase a home.
By allowing eligible transactions to receive owner-occupied financing, the program may offer lower down payment requirements and more favorable loan terms than purchasing the property as an investment.
If you think your situation may qualify, speaking with an experienced mortgage professional can help you determine whether Family Opportunity Financing is the right option for your family.
Related Articles
(Coming Soon)
- What Is a Conventional Loan?
- How Much Down Payment Do I Need?
- Understanding Owner-Occupied vs. Investment Property Financing
- Mortgage Options for First-Time Homebuyers
Need Personalized Advice?
Every family’s situation is unique.
If you’re considering purchasing a home for an aging parent or an adult child with a disability, I’d be happy to discuss your situation and help determine whether Family Opportunity Financing may be an option for your family.
Mortgage guidelines, loan programs, interest rates, and eligibility requirements are subject to change. Please consult a qualified mortgage professional regarding your specific situation.
Tom Houston
Mortgage Advisor Since 1997
Direct: 813-601-0964
NMLS 225040 FL Lic LO9924
Equal Housing Lender