House Hacking with a Partner

2 Replies

I have a question for the BP knowledge base: my brother wants to house hack but doesn't have money for a down payment and may not qualify for the loan.  I want to purchase a duplex but would rather not have to come up with the 20% down payment.  Would it work for us to partner up?  Say I put up the down payment and get the loan and my brother lives in the duplex for a year plus.  He gets discounted rent and a small 1-3% ownership stake and I get into the duplex for less down.  Does this work?

How would the mortgage work out?

Does he have to be on the loan for it to be owner occupied?

Does he have to be on the tile for it to be owner occupied?

Does the partnership sound fair?

Thanks for the help.

@Devin Stott

I think this sounds like a brilliant plan. Call a bunch of mortgage brokers to ask their opinion. My only concern is that sometimes the person on the mortgage, which would have to be your brother to get the OO status (I think), has to have seasoned money to use as the down payment. This might have relaxed in the past few years, but I'd definitely call a bunch of brokers to see whether this is possible. Sounds like a win win.

Devin -

I am thinking about pursuing the same type of set-up with my younger sister. (Maybe something more like 50/50 compared to your majority/minority stake, but still similar idea...) 

I am wondering if you and your brother ended up pulling the trigger on this? If so, would you mind sharing the details? How'd the mortgage work, who paid/pays for what, etc.

Thanks!

Ryan

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