Opening HELOC on Parent's LA Home, My Name Not on Title

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Opening HELOC on Parent's LA Home, My Name Not on Title

Account Closed
Santa Barbara, CA · Member since 2019 · 2 posts · 1 vote

Hey BP, making my first post here!

I'm looking to open a HELOC on my parents home here in Los Angeles, and use the money to fund rehabs to make their property rent ready. Currently my parent's home is my primary residence. I applied for a HELOC through Third Federal but was declined as although my credit score (>700) and income are great, my dad has 0 income as he's retired and a very low credit score (~500).

I would look into adding my name to our house's title, but I'm wondering if that will trigger a re-appraisal from LA city. My dad has built several unpermitted additions which will definitely incur us significant fines if re-appraised. Any recommendations on HELOC lenders which would allow me to apply for a HELOC despite not being on title? Or maybe a lender with which I can include my dad as he has title, but primarily rely on my credit score+income? Maybe some other form of financing altogether?

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    7y

    YOU can not mortgage the property because you are not an owner, period.  You dad could perhaps get a loan, with you as a co-signer.

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  • Stephanie MedellinBusiness Member
    Mortgage Broker · CA · Member since 2014 · 1k+ posts · 644 votes
    7y

    Hi @Account Closed - you wouldn't be able to take a loan out on a property you don't own.  If your Dad adds you to title, you would be able to refinance.  Due to your Dad's credit score, you have the right idea with only putting the loan in your name to qualify for better rates and terms.   

    An appraisal from a lender has nothing to do with an appraisal by an assessor - they are not shared.  You may want to check out this page from LA county - http://lacountypropertytax.com/portal/list/faq.aspx?faqID=52 that talks about transfers between parents and children. 

    The unpermitted construction may or may not be an issue for the loan.  

    I believe if you add square footage or improvements to your home, those improvements can add to your assessed value for property tax purposes:  

    What causes a supplemental bill?
    Supplemental bills are generated due to qualifying changes in ownership or new construction. Well known types of changes in ownership are those changes involving a buyer and seller. However, change in ownership situations also include removing or adding someone's name from title even when monetary consideration is not exchanged. Typical new construction events include adding square footage or a swimming pool. However, new construction also includes, but is not limited to, adding baths, fireplaces and air conditioning when they did not previously exist.

    The Assessor generally discovers these events two ways: 1) Changes in ownership are discovered through publicly recorded deeds; 2) New construction is discovered when copies of building permits are sent to the Assessor's Office. These bills are in addition to the regular annual tax bills. Please see Supplemental Assessments.
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  • Account Closed
    OP
    Santa Barbara, CA · Member since 2019 · 2 posts · 1 vote
    7y

    Amazing, thanks @Stephanie Medellin! Something like Prop 58 is exactly what I was looking for, I definitely need to be reading these FAQ's way more thoroughly. Part of the motivation to secure a HELOC is to bring our property 100% up to code and avoid any future headaches with unpermitted additions.

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