Rental Property Investor · FL · Member since 2016 · 271 posts · 92 votes
Steps:
1-Live in and hold mortgage on primary SFH
2-Add additional persons to title only
Scenario, additional person on title gives closing cost $$ of 3.5%, add the person to title as 7% ownership and rides it out until a future sell of the home occurs or refi and buy them out.
Lender · West Palm Beach, FL · Member since 2017 · 306 posts · 122 votes
2y
Hi Joshuam,
If you put someone else on the title, they will have an equal ownership share as you. To specify that they are only a 7% owner of the property, you would need to create an entity such as an LLC with you having a 93% share and them 7%, and then using that to buy the property. That would complicate things quite a bit however.
Are you trying to use a FHA loan to buy a primary residence, with someone else covering your down payment? This is only possible if the person gifts you the amount--it can't be any type of loan or equity transaction. A better option could be using a 100% LTV FHA program. Essentially the same lender that makes the FHA loan also gives you a loan for 3.5% to cover the down payment, leaving you with only the closing costs (which you can get a credit from the seller to cover). I know lenders that offer this in Florida--feel free to reach out if you're interested.
Rental Property Investor · FL · Member since 2016 · 271 posts · 92 votes
2y
In regards to the mortgage you are correct John, It cannot be a loan. A letter must be written to show it as a gift.
In regards to who you put on title it is separate. But yes, I did missed the equal shares, vs specific shares via LLC.
It is NFCU, zero down-payment product, they do not care about seasoned funds in accounts. But underwriters would ask about big deposits , to make sure is non-criminal activities they required a letter stating is a gift and not a loan from such party.
Regardless of the loan product, and using your explanation as an example would this be the outlook: Title to include Person 1 (mortgage holder) + LLC (93% Person 1 + 7% Person 2)