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Conventional loans · Fannie Mae B2-2-04Non-occupant co-borrowers and co-signers: how parents help a buyer qualify

Fannie Mae lets someone who will not live in the home – often a parent – sign the note on a buyer's principal residence. A guarantor or co-signer signs the note and is jointly liable but is not on title; a non-occupant borrower signs the note, is jointly liable and may or may not be on title. Neither can have an interest in the sale – the seller, builder or real estate agent cannot fill this role – and they must meet the general borrower eligibility rules. They are allowed on purchases and on limited and cash-out refinances. Through Desktop Underwriter, all borrowers' income, assets, debts and credit are analyzed together and the maximum loan-to-value is 95%. On a manually underwritten loan using the non-occupant's income, the maximum is 90%; the occupant's own income alone must support a DTI of no more than 43%; and the occupant must pay the first 5% of the down payment from their own funds, unless the LTV is 80% or less or the occupant is buying a one-unit home and qualifies to use gifts, grants or employer assistance for the minimum contribution.

Who is who

  1. Guarantor / co-signer

    Signs the note, jointly liable, not on title.

  2. Non-occupant borrower

    Signs the note, jointly liable, may be on title, does not live in the home.

  3. Not allowed

    Anyone with an interest in the sale – the seller, builder or real estate agent.

Limits by underwriting method

  1. DU

    All borrowers analyzed together; max 95% LTV/CLTV/HCLTV (105% CLTV with a Community Seconds where allowed).

  2. Manual – LTV

    Max 90% when the non-occupant's income is used.

  3. Manual – DTI

    Occupant's own income only: DTI no more than 43%.

  4. Manual – down payment

    First 5% from the occupant's own funds, unless LTV ≤ 80% or a one-unit purchase qualifying for gifts, grants or employer help.

What the TC can do

  • Add the co-borrower as a party early – the lender will need their documents too.
  • Ask the lender whether the co-borrower will be on title; the title company needs to know before preparing the deed.
  • Plan signing for every person on the note, in person, by remote notarization or by POA.

Questions buyers and parents ask

Can my parents co-sign my mortgage without living in the house?

Yes. Fannie Mae allows guarantors, co-signers and non-occupant borrowers on a principal residence purchase; they sign the note and are jointly liable (Selling Guide B2-2-04).

What is the maximum LTV with a non-occupant co-borrower?

95% for loans underwritten through DU; 90% for manually underwritten loans that use the non-occupant's income.

Does a co-signer have to be on title?

No. A guarantor or co-signer is not on title; a non-occupant borrower may or may not be.

Related guides

Add the co-borrower as a party on the deal in ClosingCode and request their documents with their own upload link – in English or Spanish.

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Source: Fannie Mae Selling Guide B2-2-04, Guarantors, Co-Signers, or Non-Occupant Borrowers on the Subject Transaction (09/02/2020), selling-guide.fanniemae.com, read October 25, 2026.

General information about Fannie Mae conventional loans, not legal advice. State law governs powers of attorney, and the lender and title company decide whether a specific POA is acceptable. ClosingCode is software; it is not a law firm, lender or title company and is not a substitute for the advice or services of an attorney. This guide is not a substitute for the advice or services of an attorney.