Question selling to family

Hi, that could possible be true for that particular lender. We allow gift equity for the down payment, you would sell the home for $230k and gift them the $30k in equity as a down payment. Please feel free to give me a call and I can explain the details.I am a local Colorado mortgage broker and have been in the business for 14 years. Thanks, Corey 970-672-0496

The lending rules have an "identity of interest" section that require a minimum of 15% down if the parties are related..which in this case they are. The exception to that rule is if the borrowers rent the subject property for a minium of 6 months (with proof of rental history)...then they can do minimum down payment investment guidelines. I would be happy to discuss in more detail with you if you have additional questions. You can reach me at 303-907-9813. I am here to give you straight and accurate answers to your questions :) Natasha

FHA defines an "identity of interest" as any relationship where the purchaser and seller are related. When you have an identity of interest the buyer has to put down 15%. However, you can gift her the 15% equity to solve this issue. You can reach me at 303-521-7169 to run the numbers and see if it will work for you or not. From the numbers in your question it looks like it would be very tight, but worth a look.

Either your not getting the complete story, or they need to find another loan officer.. Non-Arms length transactions are allowed.. For FHA, it's 85%.. If the property is worth $235K, and you sell it for $200K, your at 85% Loan to value... this would be acceptable with a "Gift of Equity" letter.. if the home appraised for less, then the borrower can bring cash to close to get the LTV to 85%.. or you could lower the price of the home, but in any scenario, it's completely allowed.. If you're not willing to lower the price and it doesn't appraise high enough, then you could do "Seller Financing" such as "contract for deed", "lease option", "rent to own, etc., but some sort of sale agreement.. by selling the home this way, your Niece could pay you monthly, and after 6 to 12 months, she could "Refinance" and pay off their loan with you, but renting the home for 6 months will not do anything as far as helping her get 100% financing.. .. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

It is dependent on the Lender- Try you local community bank or lender- theyshould have a program that allows a gift of equity.

There are a few ways to make this work... Gift of equity is probably the easiest if the value really is $25 - $30k higher than what you are willing to accept in your pocket. Talk to another lender - and avoid banks.

First - find a new lender. If they only told you the restriction and not an alternative they are either not motivated or not well versed in options. If you believe it would appraise for $230,000, then they could finance 85% of it with a gift of equity from you. This is likely the best option. You were given correct information about them living there for 6 months to get around this 85% limitation. All of this is assuming an FHA loan, a conventional loan may be a better option. The best thing to do is sit down with an experienced lender and talk about options. If you don't know who a good lender would be, check with a Realtor that you trust - they always know the best Lenders.