1031 Exchange scenario with low credit score

[Ed Yuen]

Hello everyone,

I have a client with a credit score below 620 which makes it tough to get a loan. Can they do a 1031 exchange and use their funds towards the down payment of a property and have their daughter take out a loan alone for the remainder of the purchase price (since she has a higher credit score)?

They would essentially gift the money from the lenders perspective, but from the 1031 perspective the funds will be transferred directly to escrow at closing so it may satisfy both sides. Thoughts?

Many thanks in advance!

[Ed Yuen]

Thanks again for the input and the follow up, @Dave Foster. I'll see if I can figure this one out!