Fannie Mae Family Opportunity Mortgage | Guidelines 2025

Buy a home for aging parents

Typically, mortgage lenders offer the best interest rates to homebuyers looking to purchase a home they plan to live in as a primary residence. These mortgages are known as “owner-occupied” loans.

But there is one situation when lenders will allow borrowers to purchase an “owner-occupied” residence, even when they don’t plan to live in it: when the borrower is purchasing the home for an elderly parent.

The Fannie Mae Family Opportunity Mortgage is intended to make it possible for a family member to purchase a home without the same occupancy requirement.

What is the Fannie Mae Family Opportunity Mortgage?

The Fannie Mae Family Opportunity Mortgage allows a borrower to purchase a home with all the advantages of an owner-occupied loan, even when they do not plan to live in the house.

For a parent with insufficient income to secure a mortgage loan themselves, the Family Opportunity Mortgage offers a path to independent living. It’s also possible that purchasing a home could be a cost-effective option, and the mortgage payment may be significantly less expensive than the cost of a nursing home or assisted living facility.

Those advantages are significant and include more flexible loan terms, lower down payment requirements, reduced closing costs, and lower interest rates.

Without the Family Opportunity Mortgage loan program, borrowers would have to purchase a home for their parents as a second home or investment property, which can cause added complications and expenses.

Other home loan options for elderly parents

• Second home loans — also known as vacation home loans — generally include a distance requirement, specifying that they must be at least 50 to 100 miles away from the borrower’s primary residence.
• Investment property loans generally have a down payment requirement of 20 to 30 percent, stricter qualifying financial requirements, and higher interest rates.

Co-borrower agreements could be an option for children looking to co-sign their parent’s purchase or refinance mortgage. In this instance, the loan officer will also review the child’s assets and income during underwriting, making it easier for the parents to qualify, without requiring that the child live in the home

Family Opportunity Mortgage program requirements 2025

According to Fannie Mae, borrowers must demonstrate that the parent “is unable to work or does not have sufficient income to qualify for a mortgage on his or her own.”

Because the property is designated as an owner-occupied home, the down payment can be as little as 5 percent of the purchase price.

To access this type of mortgage, you’ll need to meet the conventional loan eligibility requirements established by Fannie Mae and Freddie Mac, including:

• 620 minimum credit score
• 45% maximum debt-to-income ratio (DTI)
• Steady employment and the demonstrated ability to afford the costs of a new mortgage in addition to your current housing costs
• Documentation that the family member cannot afford the home on their own, typically pay stubs or Social Security award letter

These documents demonstrate for the loan that your loved one cannot qualify for the loan amount on their own, and that the borrower can afford the commitment of a new mortgage.

Family Opportunity Mortgage benefits

The Family Opportunity Mortgage offers significant benefits for borrowers looking to purchase a home for a family member, including:

• Lower down payment and mortgage rates. Borrowers can access lower mortgage interest rates, and qualify for a lower down payment requirement, than with a second home or investment property loan.
• No occupancy requirements. Borrowers can enjoy the benefits of an owner-occupied loan without needing to actually live in the house.
• No distance requirements. Unlike the minimum distance requirements for a second home loan, the Family Opportunity Mortgage allows borrowers to purchase a nearby home for their parents.

Fannie Mae Family Opportunity Mortgage FAQ

Is there such a thing as a Family Opportunity Mortgage?

Yes, the Fannie Mae Family Opportunity Mortgage program is intended to provide a more accessible option to borrowers seeking to buy a home for their aging parents.

Can you buy a primary residence for your parents?

Yes, the Family Opportunity Mortgage program gives borrowers a loan option to purchase a home for their parents as a primary residence.

What is an Opportunity Loan?

The Family Opportunity Mortgage allows borrowers to purchase a home as an owner-occupied residence, even when planning for someone else to live in it.

Can I buy a home for a disabled adult child with the Family Opportunity Mortgage?

While the Family Opportunity Mortgage is most commonly used to buy a home for aging parents, it can also be used to purchase a home for a disabled adult child with sufficient documentation that the child is not able to afford the home on their own.

Is the Family Opportunity Mortgage right for you and your elderly parents?

Whether or not the Family Opportunity Mortgage is right for your family will depend on your financial situation, your local real estate market, and your homeownership goals.