Non-Occupant Co-Borrower Guidelines 2026: LTV Limits, Agency Rules, and Income Counting

A non-occupant co-borrower is on the loan but does not live in the property. Their income and debts count in the DTI calculation, and their credit is pulled. They provide additional qualification strength when the occupying borrower cannot qualify alone. But each agency has specific rules about when they are allowed and what happens to LTV when they are added.

Fannie Mae

Fannie Mae allows non-occupant co-borrowers on 1-unit primary residences. If any borrower is a first-time homebuyer, maximum LTV is 95%. If the non-occupant co-borrower owns the property jointly (on title), no LTV restriction applies beyond standard limits. DU must approve the file. Non-occupant co-borrowers are not allowed on HomeReady at LTVs above 95% without the occupying borrower having their own qualifying credit profile.

FHA

FHA is the most flexible agency for non-occupant co-borrowers. They are allowed on 1-4 unit primary residences with standard 3.5% down (580+ FICO). The co-borrower must be related to the occupying borrower by blood, marriage, or law. If not related, both parties must document that they have lived together for at least 12 months. The non-occupant co-borrower's income counts in full and their debts count in DTI.

Freddie Mac

• ✦Home Possible: maximum LTV is 95% when a non-occupant co-borrower is present
• ✦Standard conventional: non-occupant co-borrowers allowed at up to 95% LTV on 1-unit
• ✦LP findings drive the decision; the AUS evaluates the full risk profile

VA and USDA

VA does not allow non-occupant co-borrowers who are not the veteran's spouse. The property must be the veteran's primary residence. A non-veteran spouse can be a co-borrower. USDA also requires all borrowers to occupy the property. Non-occupant co-borrowers are not an option on these programs.