Private money loan questions

[Corbin Jones]

If my friend buys a house for me in my name and we have a personal loan on the amount used to purchase the home, is there anything illegal about that?

As a second option, if we go the route of him lending me the money, and then I buy the home myself, is that considered a gift over $15,000 that will be taxed? I’ll be paying interest on both scenarios.

[Tom S.]

@Corbin Jones  I would see it as the second option, he/she lends you the money, just like a bank would, and you purchase the house.  Then you pay him back principal + interest each month.  There shouldn't be any gift tax as that person isn't giving you anything for free.  

For your friend, it shouldn't be a personal loan.  Ideally that person would have a 1st lien against the property as collateral, again much like a bank would.