Need Help with Creative Strategy

[RaSheem Barnett]

Hello All...I have a friend (she actually works for me as well) that bought a foreclosed home and paid cash for it. A few years later, she ran into some medical issues and needed some money. She found a private investor that loaned her $26K, using her home for collateral. That was working well. Now that she has finished her schooling, they want their money too, so she approached me for help about how to get more money to pay her school loans. She also stated that she was thinking about selling her home, but not for another 1.5 years when her daughter gets done with high school. So, I looked into the value of her home and found it is worth about $170K. I told her to go and get a HELOC. She could pay off the private investor and all of her student loans and the monthly payment would actually be about $50 less than what she pays the private investor alone. She like the idea, but she was hesitant because she is not familiar with HELOCS. I went with her to the bank where I have my HELOC and they said she has enough income to make the payment, but credit score too low. They require a 600 min. Her score is sub 500. I didn't think you could get a score that low. Apparently, she doesn't have any credit. The only things that are on her report are the student loans and a JCPenny credit card that was opened in 1981 and closed the same year.

I'm looking for a creative way to help her.  I mentioned that I may be willing to buy her home, but considering I have lots of money tied up in other investments, i can't give her full price for it, especially considering she doesn't want to move yet.  I would appreciate any out of the box creative ideas to accomplish this.  Thanks