Co-signing FHA loan has strings attached

Flickr photo by ethorson.

Q: We have income that we are unable to document on our FHA loan application. We need to qualify for just $50,000 more than we are approved for. We have elected to have a co-signer, but we would like to have a co-signer release after 12 months of on-time payments built into the loan. We do not want our co-signer to have any ownership interest in the property and he will not be on the title. Is it possible to do this with FHA loans?

And if he co-signs on our FHA loan and is removed after 12 months of on-time payments, will he need to wait three years from that point before he can apply for his own FHA loan or could he apply immediately once removed?

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