ALEXANDRIA, Va. (9/30/10)--Can a credit union member get a long-term mortgage loan to purchase a second residence for a family member to live in while attending college, a New Orleans federal credit union recently inquired of the National Credit Union Administration (NCUA). With housing in many colleges and universities not guaranteed after a college student’s sophomore year, a growing number of parents are seeking to fill the college housing gap by purchasing digs for their son or daughter. So this question may be on the rise at credit unions. In its query, Shell New Orleans FCU stated that the borrower’s family member would be the primary resident of the dwelling while studying and may share the residence with a roommate paying rent for space in the house. NCUA Associate General Counsel Hattie Ulan, in the agency’s reply said that the credit union can make this loan under the long-term mortgage lending authority--but only if the house is intended to be the future principal residence of the member. So if the parents want to retire eventually to College Town, USA, then the credit union can write the loan up to the NCUA's 40-year maturity limit. Ulan wrote that the credit union must determine if the “principal residence” requirement has been met when the loan is made. In what effectively was a clarification of the agency’s mortgage rules, the NCUA also stated that if the “future residency” requirement is met, it would not then matter if the temporary college-aged occupant was a member of the credit union making the loan. Also, the dwelling in question would “still qualify as a future principal residence if space in the home is rented out” until the parents move in. If the loan for the student's lodging will not be the borrower's future residence, the credit union could make a loan subject to NCUA's general lending rules, including the 15-year maturity limit. For the full NCUA letter, use the resource link.