FHA loan + Mother helping w/ either 1031 or additional loan

Member since 2022 · 1 post · 0 votes

My mother has offered to help me buy a house. I am approved for a small owner occupied FHA loan. She has offered to sell one of her rental properties and do a 1031 exchange and/or take an additional loan. Since I have an FHA loan, its tricky. What are the possibilities to accept my mothers help, but be able to occupy the property either immediately or in a few years? Would it be best for her to not sell the rental she has and instead be a cosigner? WOuld it be even better if I tried to get a loan for an investment - so the two of us invested together, to later occupy? Thank you

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Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
4y
@Jennifer Kappelman, You have not restrictions on how you use the property you buy. Your mother must purchase investment property for her if she does a 1031 exchange. And she needs to take title to at least as much real estate as she sells.
She could sell and do a 1031 to buy a property with you. She can go on the note. She has to go on the deed. FHA will work with this. But she does have to take title to at least as much as she sold. So, if she sold a property for $250K and you are wanting to buy a house for $500K she has to take title to 50%. You can take title to the other 50%. And she can rent her 50% to you. So she is using it for investment (arms length with lease and reporting of rent etc). And you get the FHA terms.
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Brad HammondBusiness Member
Real Estate Agent · Portland, OR · Member since 2016 · 1k+ posts · 605 votes
4y
This one is tricky. If your mom is going to 1031, it will need to be in her name. Maybe she could purchase it and give you a lease to own.
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