January is a Good Time for Planning Housing Decisions

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As 2025 has recently ended and 2026 has begun, January is a natural time for planning. For some in high school, the end of school is within sight. For others in college, it means thinking ahead about housing for the upcoming academic year. If a student prefers a residential setting, parents often face the decision of renting versus buying. Like any rent versus buy analysis, there are advantages and disadvantages. When the analysis leans toward buying, a knowledgeable mortgage broker can help guide the decision.

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Understanding Kiddie Condos for College Housing

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Often referred to as “Kiddie Condos,” this scenario involves a college bound son or daughter living in a one unit second home purchased by their parent or parents. There are several key requirements to consider. Typically, the child must be enrolled in college, and documentation verifying current enrollment is required. The property must be located within reasonable proximity to the university the child attends and far enough from the parents’ primary residence to qualify as a true second home.

The subject property may provide the parents with a place to stay while visiting campus, but it will serve as the child’s primary residence during the school year.

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Occupancy, Ownership, and Loan Requirements

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In most cases, the property cannot be rented and must be occupied by the child for a minimum of one year. Borrowers generally may not own additional second or vacation homes in the same area. A letter from the borrower explaining the purpose of the purchase is required, and the property must be registered, underwritten, and priced as a second or vacation home.

Parents apply and qualify for the mortgage. The child is not required to be an applicant and does not factor into loan qualification. While the parents own the property, if the child is of legal age they may be added to title, though this is not required.

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When Buying Makes Sense for Families

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In some situations, purchasing a property can be a smart long term decision, especially if more than one student will benefit from the home or if the student plans to attend graduate school. In these cases, buying may provide greater value than renting over multiple years.

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Co Borrowing to Build Equity and Credit

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In another common approach, parents and their child purchase a property together, often in a college town or near a first job after graduation. The student or young adult lives in the home while the parents co sign or co borrow on the mortgage. This structure allows the child to begin building credit and homeownership responsibility while leveraging the parents’ income and credit profile for more favorable loan terms.

Potential benefits include building equity instead of paying rent, establishing credit history, possible rental income from additional bedrooms, and potential tax advantages.

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Key Considerations Brokers Help Navigate

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There are important considerations brokers understand well. Lenders often require the student to occupy the property as their primary residence. While the parents’ income and credit can strengthen the loan application, the child may also be listed as a borrower depending on the structure. Families should clearly define responsibilities related to mortgage payments, maintenance, and roommate management.

There are additional factors to review, and this is where an experienced mortgage broker can provide valuable guidance on program options, qualification requirements, and long term planning strategies.

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