Note that in the two instances mentioned above, the family member relationship is exempt from the identity-of-interest 15% down payment requirement IF the borrower is buying the principal residence of the seller for her own use as a principal residence. A lease or other written evidence to verify occupancy is required.” a Property owned by another Family Member in which the Borrower has been a tenant for at least six months immediately predating the sales contract. the Principal Residence of another Family Member or “The 85 percent LTV restriction may be exceeded if a Borrower purchases as their Principal Residence: Who is exempt from paying a 15% (of the adjusted value of the home) down payment when the seller is a family member or colleague? The confusion comes in over who this applies to.įHA Loan Rules For Down Payments When The Seller Is A Family Member Or Business Associateīecause identity of interest transactions require a higher down payment, naturally borrowers want to know if there are exceptions and how they may be obtained. In such cases, the general rule is that a 15% down payment is required. What do you need to know about FHA loan down payment rules and identity of interest transactions? We’ve been covering this topic more recently due to some reader questions about how it all works we’ve noticed some confusion about the rules in this area and who those rules apply to.įHA identity of interest transaction rules are specifically for borrowers who have a family or business relationship with the seller. What You Need To Know About Identity Of Interest Transactions
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