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FHA Restrictions on Non-Occupying Co-Borrowers in Cash-Out Transactions in Georgia

Mar 21, 2024

Did you know that FHA does not allow a non-occupying co-borrower (NOCB) on a cash-out transaction in Georgia? It’s true! Even when the non-occupying co-borrower is already on the title, FHA will not allow any income from them to be used to qualify for the loan.

When it comes to FHA loans in the great state of Georgia, there are specific guidelines and restrictions in place to ensure the financial stability of the borrower and the lender. One of these restrictions is the limitation on non-occupying co-borrowers in cash-out transactions. A non-occupying co-borrower is someone who is listed on the title of the property but does not live in the home as their primary residence.

In a cash-out transaction, the borrower refinances their existing mortgage for an amount higher than the current loan balance. This allows the borrower to receive cash back from the equity in their home. However, when a non-occupying co-borrower is involved, FHA has strict rules in place.

FHA does not allow any income from the non-occupying co-borrower to be used to qualify for the loan. This means that the borrower in Georgia must meet all income and credit requirements on their own without relying on the income of the non-occupying co-borrower. This can make it more challenging for some borrowers to qualify for an FHA loan, especially if they were counting on the income of the non-occupying co-borrower to meet the requirements.

Borrowers need to be aware of these restrictions when considering an FHA loan with a non-occupying co-borrower. By understanding the guidelines and requirements set forth by FHA, borrowers can make informed decisions about their mortgage options.

FHA does not allow a non-occupying co-borrower on a cash-out transaction, even if they are already on the title. This restriction is in place to protect the financial stability of both the borrower and the lender. Borrowers should know these guidelines when considering an FHA loan with a non-occupying co-borrower.

Contact us to see how we can qualify you for a loan in Georgia.