Buying A House For A Relative To Live In -

Buying a house for a relative to live in involves choosing a financial structure that balances your budget with your desire for control and potential tax benefits. Because these are "non-arm's length transactions," lenders and the IRS often provide closer scrutiny. 1. Choose a Financing Strategy

: You get the same favorable interest rates and low down payment requirements (as low as 5%) as a primary residence, even though you won’t live there. buying a house for a relative to live in

: This is a specialized conventional loan option that allows you to buy a home for an elderly parent or a disabled adult child who cannot qualify for a mortgage on their own. Buying a house for a relative to live

: You act as the bank, lending the money directly to your relative at a minimum interest rate set by the IRS, known as the Applicable Federal Rate (AFR). 2. Understand Ownership and Legal Structures Choose a Financing Strategy : You get the

: If the relative doesn't meet the "disabled child" or "elderly parent" criteria, you can buy the home as a second residence or investment property.