Family Opportunity Mortgages Explained
There is a little-known but wonderfully flexible mortgage product specifically designed for families who want to buy a home for their disabled son or daughter called a Family Opportunity Mortgage. We attended a webinar on Oct. 22nd presented by Consolidated Planning Group in which Dwayne Graham of New American Funding, LLC explained the attributes and benefits of this financial product.
Many of the residences in our Autumn Hills Village community are for-sale properties and we often field questions from families about how they could afford to buy a home for their disabled son or daughter, often because they already have a mortgage on their primary residence.
We are already making our homes affordable by making them smaller and we can show families how the incremental cost of a residence for their adult child is within reach of their budget, but the key attributes of a Family Opportunity Mortgage really make it possible.
Here are some of the key features of a Family Opportunity Mortgage:
Loan amounts up to $802,000 and going higher in 2025
Down payment as low as 3% (a straight 2nd mortgage is typically 10%; an investment property 15%)
Competitive interest rate because the property is considered owner-occupied and the borrower’s primary residence
Lower minimum credit score requirement of 620
Fixed and adjustable options
Borrower can get 50 percent of the Homestead exemption on the property (not 100%)
Offered and guaranteed by Fannie Mae and Freddie Mac
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.
Important additional considerations:
Borrower must have some form of guardianship or protection of the disabled individual who will occupy the property. The Borrower cannot be the disabled adult child.
Borrower still must produce the down payment, closing costs, and escrow fees at the time of closing.
The property cannot be used as an income property.
Not every bank offers the Family Opportunity Mortgage product, but a Google search using the term “family opportunity mortgage lenders” will produce a substantial list of lenders who do offer it.