Has anyone used a "family opportunity mortgage"?


We are starting to look into a "family opportunity mortgage" to purchase a home near us for my parents. I'm wondering if anyone has gone through the application process.

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You'll need 20-30% down and a really good credit rating. Fannie Mae created this product for buying homes for parents, or students away at college.
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I also had to dig for some information. This would work if the adult children are able to afford to pay a mortgage on two houses.... their own house [unless paid off] and on the property for their parent. It can be structured as a "second home".

It might be better to structure the parent's new house as a rental, then that way if the parents are paying the going rate for rent, then the adult child can take advantage of the IRS deductions for owning a rental property. The only draw back would be the down payment would be higher and so would the interest rate, but with the deductions one might break even.
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I hadn't heard of this mortgage product either, so I did some quick checking. Apparently it's a method for adult children to purchase a home for their parents, who are subject to certain restrictions (can't afford a mortgage themselves and aren't working), but as a residential as opposed to a second home or an investment property.

Terms are more akin to those for residential properties. The home isn't subject to distance restrictions or a higher down payment, higher interest rates or more strict qualification criteria (as they would be for investment properties).

I found articles at the BankRate website and one which provides a good basic description at the "My Mortgage Insider" website. I can't post a link b/c the filters delete portions of the URL, but if you do a google search, you'll get hits on these websites.

What I found interesting was the my search brought up names of lendes, none of which I would ever consider for loans. One has a less than stellar reputation, and the others I haven't even heard of. It's not entirely clear if Fannie Mae grants the loans or other lenders grant it on Fannie Mae's terms.

My concern would be the caliber of these lenders, as well as the long term obligations, i.e., if the house has to be sold when one or both parents have died, or if they move to living facilities out of the house (such as IL, AL, or other commercial care facility).
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I don't think it is state specific since it is a Fannie Mae product. My realtor just let me know about this as a way to purchase the home without having to set up an S-corp or LLC and purchase it as in income property. Here is one link I found.
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FoxMeadow, I have never heard of the "family opportunity mortgage" and here I work in the real estate field.

I wonder if this is only available in certain States?
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