FHA Kiddie Condo loan program allows relatives to help college students and others get their first homes.

Worried about student housing costs when you send your child off to college? Consider purchasing a condo with an FHA Kiddie Condo loan!

Kiddie Condo loans allow blood relatives to co-borrow with the student, thus allowing them to qualify for the loan using the income and assets of the parents (or grandparents or siblings). Both parties take title to the property, and one person is required to live in the home.

Here are the advantages of buying with a Kiddie Condo loan:

• Low down payment (as low as 3%).
• Lower owner-occupied interest rates (non-owner occupied or investor rates are higher).
• Helps the student establish a credit rating.
• Allows the student to rent out rooms to others to help pay the mortgage payments.
• Provides an alternative to the dorms, and often a better quality place to live.
• Provides income tax deductions for interest and property taxes.
• Can be used to purchase a 1-4 unit building.

Assuming that the condo is sold for a profit at some point, the Kiddie Condo can be a great stepping stone into a "real" home for your student later on. Or you can use the profits for graduate school or other costs.

Kiddie Condo loans are generally originated under the FHA 203(b) program.

Be sure to check with your tax advisor about tax deductions and the income generated from renting out rooms to other students.

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