My father in law has two properties here in upstate NY: his primary home and a rental. His primary home he built with his own hands over the past 30 years. It is where my wife grew up and it is really special to us. It is a beautiful secluded piece of property that almost has a story book feel and we want to keep it in the family and have our children get to grow up with this house. The rental is a 4 plex that is in great shape. It brings in about $2400 a month. He owes about $60,000 on the note which is held by the previous owner. Both properties are in great shape and all the work done on them is to code because My father in law is a contractor.

A few years back my father in law had to have surgery which put him out of work and we was not able to afford his mortgage payment on his primary home. The credit union worked a deal with him that if he made all his interest payments on time over the next few years that they would refinance his loan since at the end of two years. But if they didn't refinance, the payment would balloon. Well, that time has come and his payment has doubled. The current loan on the house is about $296k, but the payment is about $4k (not including NY prop taxes). Since interest rates hiked around the time his payment ballooned it created a perfect storm.

He can no longer afford the monthly payment. He has tried refinancing his rental but has not had much luck. His credit is not great and is contributing it to being hard to get a refinance. He was planning to use some of the money on the refinance of his rental to help pay down the principal on his primary home so he could have a more manageable payment. But since the bank wont refinance his rental, that is not an option.

He has been working with the credit union that holds the mortgage on his primary home but they are moving really slow and he has not heard back from them for a while. They have done a appraisal on his primary home and it came in at $320k. He is getting really scared he is going to loose his properties since he can not make the payments.

My wife and I ultimately want to end up with these properties but worry that he is going to loose them both because he can not make his payments. Our thought was to purchase at least his beautiful primary home ourselves and let him continue to live there but we are not really in a place to put down a down payment on his primary home. We asked a bank if we could do a gift of equity on my father in laws primary home and get it that way but the underwriters will not except a gift of equity on a investment property (It has to be classified as an investment property because we will not be living in it. It also can not be considered a second home because it is not 100 miles away.)

I need some guidance as to how my wife and I can get these properties so they don' get taken by the bank. My thought is maybe there is a play with his rental property. He currently only owes $60k on it and it is probably worth $180k-$200k. Since the note is held with the previous owner, is there a way that I could just take over the property and note and refinance it myself, pull the equity and put a down payment on the primary home? Or could I purchase the rental at a discount or find someone to loan me $60k and I could refinance and pay back the $60k and put a down payment on his primary home? Please help me understand how we can save my father in laws home.

Upstate New York, New York

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