Yes. FHA, Fannie Mae and Freddie Mac all allow a co-borrower who will not live in the home on a principal-residence loan, but with lower loan-to-value limits and, for manual underwriting, ratio tests on the occupying borrower. FHA limits a non-occupying borrower transaction to 75 percent LTV, or up to 96.5 percent when the borrowers are family members, except on two- to four-unit properties or when a family member sells to a family member who will be the non-occupying co-borrower. Fannie Mae allows up to 95% LTV through DU and 90% when manually underwritten; Freddie Mac allows up to 95% for Accept Mortgages and 90% when manually underwritten, and only on purchases and no cash-out refinances.
FHA
- A non-occupying borrower transaction has a maximum LTV of 75 percent, which can rise to 96.5 percent when the borrowers are family members. FHA 4000.1 II.A.2.b.ii(B)
- The 96.5 percent limit does not apply when a family member sells to a family member who will be the non-occupying co-borrower, or when the property has two to four units. FHA 4000.1 II.A.2.b.ii(B)
- All occupying and non-occupying borrowers must take title, be obligated on the note and sign the security instruments; at least one borrower must occupy the property within 60 days and intend to stay at least one year. FHA 4000.1 II.A.1.b.ii(A)(4) FHA 4000.1 II.A.1.b.iii(A)
- Non-occupying co-borrowers must be U.S. citizens or have a principal residence in the United States. FHA 4000.1 II.A.1.b.ii(A)(6)
- For manually underwritten loans, qualifying ratios for borrowers with no credit score are computed using income only from borrowers who occupy the property and are obligated on the mortgage; non-occupant co-borrower income may not be included. FHA 4000.1 II.A.5.d.viii
Fannie Mae (conventional)
- Non-occupant borrowers are credit applicants on a principal residence transaction who do not occupy the property, sign the note and have joint liability; they may or may not be on title. Fannie Mae B2-2-04
- Guarantors, co-signers and non-occupant borrowers are permitted on purchase, limited cash-out and cash-out refinance transactions. Fannie Mae B2-2-04
- Through DU, the maximum LTV, CLTV and HCLTV ratio with a non-occupying co-borrower is 95%, and DU considers the income, assets, liabilities and credit of every borrower. Fannie Mae B2-2-04
- For manually underwritten loans that use a non-occupant borrower's income, the maximum LTV, CLTV and HCLTV ratio is 90%. Fannie Mae B2-2-04
- In those manual cases the occupying borrower must make the first 5% of the down payment from their own funds unless the LTV or CLTV is 80% or less, or the occupant is buying a one-unit principal residence and meets the rules for using gifts, grants or employer funds; the occupant-only DTI may not exceed 43%. Fannie Mae B2-2-04
Freddie Mac (conventional)
- A primary-residence loan with a non-occupying borrower must be a purchase or "no cash-out" refinance, and the non-occupying borrower must not be an interested party such as the builder, seller or real estate agent. Freddie Mac 5103.1
- Accept Mortgages: LTV may not exceed 95%, and the occupant borrower's own housing and debt ratios need not be calculated. Freddie Mac 5103.1
- Manually Underwritten Mortgages: LTV may not exceed 90%; the occupant borrower's housing ratio should not exceed 35% and debt-to-income ratio must not exceed 43% of their stable monthly income or qualifying asset amount. Freddie Mac 5103.1
Quick comparison
| Loan type | Automated underwriting | Manual underwriting | Source |
|---|---|---|---|
| FHA | 75 percent LTV; 96.5 percent for family members (not 2-4 units) | Same LTV limits | Handbook 4000.1 II.A.2.b.ii(B) |
| Fannie Mae | 95% LTV/CLTV/HCLTV (DU) | 90%; occupant DTI 43%, first 5% from occupant unless LTV 80% or less | Selling Guide B2-2-04 |
| Freddie Mac | 95% LTV (Accept); purchase or no cash-out refinance only | 90%; occupant ratios 35% and 43% | Guide 5103.1 |
Sources
- FHA Single Family Housing Policy Handbook 4000.1, August 12, 2026 version: II.A.2.b.ii(B), LTV Limitations Based on Non-Occupying Borrower Status (p. 181); II.A.1.b.ii(A)(4), Borrower and Co-Borrower Ownership and Obligation Requirements (p. 152); II.A.1.b.iii(A), Principal Residence (p. 159); II.A.1.b.ii(A)(6), Principal Residence in the United States (p. 152); II.A.5.d.viii, Approvable Ratio Requirements (Manual) (p. 359)
- Fannie Mae Selling Guide, September 2, 2026 version: B2-2-04, Guarantors, Co-Signers, or Non-Occupant Borrowers on the Subject Transaction (p. 230); B2-2-04, LTV Ratio Requirements for Loan Casefiles Underwritten through DU (p. 231); B2-2-04, LTV Ratio Requirements for Manually Underwritten Loans (p. 231); B2-2-04, Down Payment and Qualifying Ratio Requirements for Manually Underwritten Loans (p. 231)
- Freddie Mac Single-Family Seller/Servicer Guide, September 16, 2026 version: 5103.1(a), Mortgages including a non-occupying Borrower: General eligibility requirements (p. 5103-1, 5103-2)
Agency guides set the baseline; individual lenders can add stricter overlays. Sources are the guideline versions in Zeitro Strata as of October 29, 2026.