529 Plan Used to Invest in RE

[Zachary Rodgers]

I will be a college sophomore next year and I currently am on a full scholarship to attend university. My parents have a 529 plan for me and are using that to pay for my rent at my off campus apartment. I want to buy a property and use that 529 plan money to help pay for the mortgage instead of the money disappearing. My parents are fully on board with this idea and will co-sign and help with a small percentage of the down payment. I'm aware I can't use this money to help fund the downpayment but since I'm a first time home buyer I would get an FHA loan and put down less than 20%.

If I put the property in my LLC, can I put myself on a lease and charge rent to myself and my other roommates without getting a penalty from the 529 plan?

Or would it be smarter to have my parents own the property and charge me rent which can then be paid by the 529 plan?

Do I have to be the beneficiary of the 529 plan for this to work? I think my mom is currently the beneficiary.

My parents want to reward me with some of the money in the 529 plan for receiving a full scholarship. My whole idea is to avoid paying the penalty fee from the 529 plan and I want to be the primary home owner. Any suggestions to go about this or if this is even legal?