Parents supplying property for daughter and her spouse

[Christopher Hydrick]

Hello all:

I have a question that is giving me quite a bit of difficulty. I figured that this would be a good last stop before paying for a real estate attorney consultation.

My wife's parents are buying us a condo for our move to Miami. They plan to finance it, rather than a cash buy, and we are curious as to the best way to go about it, so as not to run into any sort of legal trouble down the road. I realize a cash buy would makes things infinitely easier, but they don't want to liquidate current assets to do that.

*Disclaimer* The following information has only been obtained from one lender and could very well vary by lender. I don't know simply because I have yet to have the opportunity to speak with multiple lenders.

We were told that if anyone other than the borrowers occupy the residence, it is considered an investment property. Consequently, they will not finance an investment condo at all, regardless of down payment size. They will finance a vacation home (second home) but require a 25% down payment for that set up. Given that we are looking in the $450,000-$500,000 range, that is a sizable increase from the 20% (or less) we were anticipating putting down.

My question is: do family members occupying the residence qualify that situation to be considered an investment property? My wife and I would not be responsible for any fees or payments and would be all but completely unassociated with the unit, at least on paper (the only thing I could think might be registration at the concierge desk as a resident?) However, she is still their daughter and would have a right to occupy the vacation home, no?

Any clarification on this would be greatly appreciated! Judging by the lack of information everywhere, I wouldn't guess this situation comes up too terribly often, hah.

Thank you guys in advance!

-Chris

[Account Closed]

@Christopher Hydrick I would think its classified as investment property

A cheaper option is a non-occupant co-borrower. FHA type Kiddie Condo loan. For blood relatives it was only 3%. Down compared to 20/25%

You can check it online

here is one link

http://www.mortgage101.com/article/fha-kiddie-condo-loans-first-homes-young-adults

I know you could do them 2/3 years ago

Also smaller bank or credit union may have something a big one doesn't offer