How should non-occupying co-signers and non-occupying co-borrowers be treated when calculating household income?
A co-signer on a loan agrees to be legally responsible for a debt should the borrower default. They are generally not on title and they do not have an ownership interest in the property. The FHLBC does not require that their income be included in the household income unless they are assisting the borrower in making monthly loan payments or regularly providing funds to the borrower to supplement the borrower’s household income. A co-borrower is on title and is considered to have an ownership interest in the property. The FHLBC requires that a co-borrower’s income be included in the household income.
