Buying A House — For A Relative To Live In

: 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

: Typically requires the home to be a certain distance from your primary residence (often 50+ miles) and may have higher rates than a primary mortgage. 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 act as the bank, lending the

How you hold the title determines what happens if someone passes away or if you decide to sell: Helping a family member buy a home - Merrill Lynch Buying a house for a relative to live