Can a person sell a home to a family member and remain a co-borrower to help them qualify?

A party who has a financial interest in the mortgage transaction, such as the seller, builder or real estate agent, may not be a co-borrower or a cosigner. Exceptions may be granted when the party with the financial interest is a family member.

For non-occupying borrower transactions, the maximum LTV is 75 percent. The LTV can be increased to a maximum of 96.5 percent if the borrowers are family members, provided the transaction does not involve:

  •     a family member selling to a family member who will be a non-occupying co-borrower; or
  •     a transaction on a two- to four-unit property.

A family member is defined as follows, regardless of actual or perceived sexual orientation, gender identity, or legal marital status:

  •     child, parent, or grandparent;

-   a child is defined as a son, stepson, daughter, or stepdaughter;

-   a parent or grandparent includes a step-parent/grandparent or foster parent/grandparent;

  •     spouse or domestic partner;
  •     legally adopted son or daughter, including a child who is placed with the borrower by an authorized agency for legal adoption;
  •      foster child;
  •     brother, stepbrother;
  •     sister, stepsister;
  •     uncle;
  •     aunt; or
  •     son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law of the borrower.

For additional information see Handbook 4000.1 II.A.1.b.ii.(A); II.A.2.b.ii.(B); II.A.2.b.i.(C) available at