Best Way to Buy a House for a Family Member

This is a great (but often overlooked) strategy for helping a family member get into their own home. Thisbuy-home applies to the following situations:

  • Your parent is on a fixed income and cannot afford to buy his or her own house.
  • You have an adult child with disability income that is insufficient to qualify.
  • You have another family member who is tired of renting but is on a fixed income too small to qualify.

How It Works

You present the family member’s income documentation to show they need help in qualifying for a mortgage. (The family member must be on a fixed income, not a low-paying job that could soon change into a higher paying job.)

You are then eligible get approved to buy the home using your own income and credit–without having to take the higher interest rate and larger down payment required for a non-owner occupied or investment property.

Advantages

  • The house is owned and occupied by family.
  • You do not pay any more for the loan than if you were going to occupy it yourself.
  • You can put as little as 3% down.
  • You enjoy the tax benefits of ownership.
  • Your family member stops paying for someone else’s mortgage in the form of rent.
  • You benefit from increased equity.
  • In the future, you may be able to sell at a profit or rent the house to someone else.

Disadvantages

  • You must be able to afford the payment, along with your own obligations. However, with 26% of Americans owning their homes free-and-clear, this option becomes a realistic opportunity. (Statistic Source: StatisticBrain)

Would You Like My Help?

I can help home buyers in the Western states. I am personally licensed in California and Washington (NMLS # 1284134) and I work with colleagues in Oregon, Idaho, Nevada, and Colorado. You can contact me here. If you are in another part of the U.S., contact your local full service mortgage lender.

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2 responses

  1. Carolyn can any lender do this loan? I don’t think I’ve heard of a lender talking about this creative way to finance.

    1. Yes, Tom, this is a Fannie Mae rule for a conventional loan. Not all loan officers read the guidelines, so many are unaware. If you want to recommend me to your home buyers, I will get them the best loan for their situation.

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