1. Borrower, Coborrower and Cosigner Eligibility Requirements

Introduction

This topic contains information on borrower, coborrower, and cosigner eligibility requirements, including

•	who is eligible for the Federal Housing Administration (FHA) mortgage insurance

•	borrower age limits

•	determination of creditworthiness

•	borrower and coborrower requirements

•	cosigner requirements

•	additional coborrower and cosigner requirements, and

•	military personnel eligibility.

Change Date

May 10, 2009

4155.1 4.A.1.a Who Is Eligible for FHA Mortgage Insurance

FHA insures mortgages made

•	to individuals with a valid Social Security number (SSN), and

•	under the conditions described in this section, to
	–	state and local government agencies, and
	–	approved nonprofit organizations.

4155.1 4.A.1.b Borrower Age Limits

There is no maximum age limit for a borrower. The minimum age is the age for which a mortgage note can be legally enforced in the state, or other jurisdiction where the property is located.

4155.1 4.A.1.c Determination of Credit Worthiness

When determining the mortgage creditworthiness of borrowers, coborrowers, and cosigners, the following is taken into consideration:

•

income

•

assets

•	liabilities, and

•	credit history.

4155.1 4.A.1.d Borrower and Coborrower Requirements

Both occupying and non-occupying borrowers and coborrowers

•	take title to the property at settlement

•	are obligated on the mortgage note, and

•	must sign all security instruments.

Note: FHA does not permit any individual to take an ownership interest in the property at settlement without signing the mortgage note and all security instruments.

Reference: For additional borrower and coborrower eligibility requirements, see HUD 4155.1 4.A.1.f.

4155.1 4.A.1.e Cosigner Requirements

Cosigners

•	do not hold ownership interest in a property

•	are obligated on the mortgage note and liable for repaying the obligation, and

•	must complete and sign all loan documents except the security instruments.

Reference: For additional cosigner eligibility requirements, see HUD 4155.1 4.A.1.f.

4155.1 4.A.1.f Additional Borrower and Coborrower Eligibility

The table below describes additional requirements and conditions for coborrowers and cosigners.

Condition/Requirement	Description
Financial Interest Prohibited	A coborrower or cosigner may notbe a party that has a financial interest in the mortgage loan transaction, such as the
	•	seller
	•	builder, or .
	•	real estate agent.
	Exception: Exceptions may be granted when the party with the financial interest is related to the borrower by blood, marriage, or law.
Basic Ineligibility for Participation	An individual signing the loan application must not be otherwise ineligible for participation in the mortgage loan transaction for reasons as described in HUD 4155.1 4.C. Note: This condition applies to all borrowers, regardless of occupancy status.
Principal United States (U.S.) Residence	Non-occupying coborrowers or cosigners must have a principle residence in the U.S., unless exempted
	•	due to military service with overseas assignments, or
	•	as a U.S. citizen living abroad.

4155.1 4.A.1.g Military Personnel Eligibility

Military personnel are considered occupant-owners, and eligible for maximum financing if a member of the immediate family will occupy a property as the principal residence, whether or not the military person is stationed elsewhere.

Reference: For information on eligibility documentation requirements for FHA-insured mortgages to veterans, see HUD 4155.1 4.A.1.h.

4155.1 4.A.1.h Veteran Eligibility Documentation Requirements

A completed Certificate of Veterans Status (CVS, VA Form 26-8261) issued to a veteran borrower is the only document that may be used for program eligibility. The Department of Veterans Affairs is solely responsible for determining eligibility for a CVS and its subsequent issuance.

Requests for a CVS must be sent on VA Form 26-8261a, along with proof of military service, to the appropriate VA Eligibility Center. This form is available at http://www.va.gov/vaforms/