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You are here: Home / Homes Near Light Rail / FHA Kiddie Condo: A Popular Option For ASU Parents

FHA Kiddie Condo: A Popular Option For ASU Parents

May 16, 2011 by Rail Life 2 Comments

The FHA Kiddie Condo program has become a popular option in Arizona for many parents with children attending Arizona State University. (photo credit)

FHA Kiddie Condo Loan ASU Students

As the end of the school year and graduation approaches, many parents are making plans to help send their children to college. Most parents who would like to help send their child to college realize that student housing is potentially a substantial portion of the cost of a college education.

The good news is that student housing expenses can become reduced and be a strategic investment opportunity through the utilization of the FHA Kiddie Condo program.

Own For Less than the Cost of Rent
The combination of mortgage rates near an all-time low and the large supply of affordable houses has created an opportunity to own for less than it costs to rent.

The FHA “Kiddie Condo Program” is a nickname given to the FHA loan program where mortgage guidelines allow an FHA lender to work with a non-occupant co-signer to qualify for the loan. The actual occupant of the home does not have to have employment, income or assets. However, the occupant’s credit must meet FHA’s qualification standards.

The “program” became popular as a method for parents who were sending their children away to college to buy them a home (or condo) to live in as opposed to paying rent – hence the nickname “kiddie condo”. However, the occupant is not required to actually be a college student. Note: The property does not have to be a condo.

The benefits of the program included the fact that the home can be purchased as a primary residence for the occupant. As such, the non-occupying parent only has to invest a minimum down payment amount into the property.

Consider the following scenario:

  • Daughter or son will be attending Arizona State University
  • Current rent for a decent 2 bedroom 1 bathroom apartment is around $850
  • There are currently over 300 homes listed for sale within ½ mile of the light rail
  • A home selling for $100,000 would have a total monthly payment around $760.00
  • FHA “Kiddie Condo” program allows the parent to buy the home with as little at 3.5% down ($3,500)
  • Seller pays the majority – if not all – of the closing costs (max seller concession towards closing costs is 6%)
  • Child lives in home for 3 years. The down payment spread over 3 years equates to $97 a month

Now consider the cost savings if the occupying child rents out the extra bedroom for $300 a month. In this scenario, they will be paying a net amount of $557 a month and own the home.

A parent should consider using the FHA “Kiddie Condo” program and taking advantage of the current FHA interest rates and low housing costs when determining how to efficiently help send their child to college.

Search now for condos near the light rail!

For more information about Kiddie Condo Loans, contact Shane Hollenback at 480.270.4820. To see any of the homes for sale near ASU, contact Nick Bastian at Realty executives. Nick can be reached at 602-803-6425

**Update: The pricing scenario is several years old. Please contact us for more information about the average prices of homes near ASU and the surrounding areas.***

Filed Under: Homes Near Light Rail Tagged With: FHA Kiddie Condo, FHA Kiddie Condo Loan, Homes near ASU, Homes Near Light Rail

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