The answer is “NO”, but a borrower cannot have an ownership interest in any other property at the time of closing.
Congratulations to Tom Sharpe (past customer) who correctly answered this week’s Mortgage Trivia.
There are exceptions to this rule. The borrower may have an ownership interest in another residential property if they do not occupy the property, and the Seller documents that the borrower meets at least one of the following conditions:
They inherited an ownership interest in the property and share ownership with another party.
They own the property with another person who has been assigned the debt associated with the property by court order, such as a divorce decree.
They are a cosigner or guarantor on a mortgage, and someone other than the borrower has made payments on that mortgage for at least the most recent 12 months.