Financing first investment property - family

[Matt Z.]

My wife and I have been searching for a duplex within the surrounding Philadelphia suburb area. We have our eye on a few with our realtor; however before we move forward, we are trying to nail down a solid game plan for financing. We have already been pre-approved for the loan amount desired, and are attempting to seek OPM. We do have a soft deal in place with a family member, where they would give us a loan for the down payment in exchange for an equity ownership percentage of the house. The second option would be to take the loan for the down payment from that family member and pay them back monthly with interest. Either way, it would be a loan for the down payment, and we would have a mortgage in our name. I just wanted to confirm if there were “gift” rules or any agreements that had to be documented for something like this to take place. Is this a common practice?