How to split equity with family

[Mohamed Alli]

 I am fortunate enough that my mother has created a trust for me to go to college, however, I've convinced her that we should use those funds to acquire an investment property via an FHA loan under my name I have the money necessary for the down payment on a 250,000 property and would use the money she's saved for the past 21 years to cover the closing fees or the other half of the down payment. However I am not sure how to give her a portion of the equity of the property, every example I've looked up has talked about "the gift of equity" from a family member but we won't be buying from a family member. Any suggestions will help

[Bruce Lynn]

FHA is for owner occupied homes only, so to buy an investment property you will need a conventional investment loan with approximately 25% down payment in most cases. You also need income to pay the mortgage in most circumstances, so your lender will want to see your W2s and tax returns for the past two years. Your first step should be to get to a lender and see if you can get prequalified for a loan. Your lender will instruct you on how to use gift funds. Normally a letter from the provider stating the money is a gift and not a loan. They may even have example letters for you to use.

Now you might be able to work it, if you buy a house near the college you want to go to, live in one room and rent the others.

Both you and your mom could be on the loan.  Mom as a co-signer.