Can I exclude debts that I co-signed (contingent liability)?

This question is incredibly common, especially for parents who have been a co-signer for one of their children — either for a car loan or a student loan.

If you’re a co-signer on a loan, and you’re looking to get approved for a mortgage, you may be able to exclude that debt provided that you meet certain criteria. See below:

• Fannie Mae (Conventional): The borrower must be the co-signer and not primary obligor. The borrower must also provide 12-months of proof of payment by the primary obligor. Fannie Mae’s Desktop Underwriter has been known to accept less than 12 payments on a case-by-case basis.
• Freddie Mac (Conventional): The borrower must be the co-signer and not primary obligor. The borrower must also provide 12-months of proof of payment by the primary obligor.
• FHA: The borrower must be the co-signer and not primary obligor. The borrower must also provide 12-months of proof of payment by the primary obligor.
• USDA: Contact a mortgage expert for more info.
• VA: Contact a mortgage expert for more info.

To learn more about specific mortgage requirements, be sure to speak with an experience mortgage broker.