May 12, 2011
In our last blog post we discussed FHA options that apply to military members who might explore FHA insured loan options when a VA loan isn’t available. Military families often face unique circumstances which affect the ability to meet some obligations as an FHA home loan applicant.
For example, a military member could be sent to a war zone for an extended period of time–which could lead to worries about fulfilling FHA occupancy requirements. Such situations are usually covered under FHA rules and don’t necessarily mean problems with an FHA mortgage.
FHA rules also address circumstances a borrower might find themselves in when applying for an FHA insured loan with a non-occupying co-borrower. Did you know FHA requirements state that all non-occupying co-borrowers and/or co-signers must have a principal residence in the United States? This precludes allowing someone who lives overseas co-signing or co-borrowing on an FHA mortgage.
That would seem to prohibit a military person from co-borrowing or co-signing on an FHA home loan, but again, FHA rules make provisions for military members stationed overseas.
According to the FHA official site, “Unless otherwise exempted (e.g., military service with overseas assignments, U.S. citizens living abroad), any non-occupying co-borrowers or co-signers must have a principal residence in the United States”.
Military members are specifically exempt from the primary residence rule in this case, no doubt based in part on the fact that military assignments overseas are not permanent (although many last for several years) and a military member has a “home of record” in the USA listed in his or her military records. A military member currently stationed overseas is permitted to co-sign or co-borrow with a qualified FHA loan applicant.
The FHA encourages borrowers to seek counseling for unique situations such as these to learn more on how to proceed. You can contact a HUD-approved counseling agency by choosing one from the list at www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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