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.

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Blue Water Mortgage is licensed in New Hampshire, Maine, Massachusetts, Connecticut, Florida, and North Carolina.

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