Properly Establishing an Intrafamily Loan?

Washington, District of Columbia
Creative Real Estate Financing
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Properly Establishing an Intrafamily Loan?

Sally Pearson
Rental Property Investor · Member since 2022 · 9 posts · 6 votes

Hello! I am doing an intrafamily loan with my father for a home purchase in DC and need to make sure it is viewed as a creditor-debtor relationship to the IRS so he doesn't get a gift/inheritance tax. To my understanding, I need to work with an attorney to get a Promissory Note to line out the terms, as well as a Deed of Trust before settlement (which is in 2 weeks)! I also believe I need to record this with the DC Recorder of Deeds. Does anyone know what other steps I may need to take? 

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
3y
Quote from @Sally Pearson:

Hello! I am doing an intrafamily loan with my father for a home purchase in DC and need to make sure it is viewed as a creditor-debtor relationship to the IRS so he doesn't get a gift/inheritance tax. To my understanding, I need to work with an attorney to get a Promissory Note to line out the terms, as well as a Deed of Trust before settlement (which is in 2 weeks)! I also believe I need to record this with the DC Recorder of Deeds. Does anyone know what other steps I may need to take? 


 The title company closing the transaction can do this.

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  • Kevin Von Storch
    Rental Property Investor · Dallas · Member since 2023 · 19 posts · 10 votes
    3y

    @Sally Pearson I'm not sure about specific steps to your situation, but I found this website to be incredibly helpful with regards to an intrafamily mortgage for both buyer and seller. https://www.nationalfamilymort...

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    3y
    Quote from @Sally Pearson:

    Hello! I am doing an intrafamily loan with my father for a home purchase in DC and need to make sure it is viewed as a creditor-debtor relationship to the IRS so he doesn't get a gift/inheritance tax. To my understanding, I need to work with an attorney to get a Promissory Note to line out the terms, as well as a Deed of Trust before settlement (which is in 2 weeks)! I also believe I need to record this with the DC Recorder of Deeds. Does anyone know what other steps I may need to take? 


     The title company closing the transaction can do this.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group546 Reviews
    WebsiteView Page
    1Reply
  • Chris Davidson
    Real Estate Agent · Boise, ID · Member since 2016 · 1k+ posts · 888 votes
    3y

    @Sally Pearson reach out to the title company or closing agency as they should have a boiler plate agreement that should suffice for your needs.

    Best of luck!

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