Help with purchasing parents home, need financing suggestions

[Jonathan Cole]

My parents currently owe $80k on their SFH, my fiance and I were wanting to purchase the home from them. The house is in need of repairs so we were going to apply for a Homestyle Renovation loan such as; Fannie Mae, 203k or Upsell. We ran into a roadblock when we told the lender that we have lived in the home for 3 yrs. We are not eligible for any FHA loans that offer 3.5% considering we are within arms length of the seller, it will take us too long to raise the 15% needed since we are not eligible for FHA.

Our ultimate goal is to put a little money into our parents pocket, get them out of their mortgage, as well as repair and update the home as quickly as possible and building equity into the home.

We are trying to view this as an investment purchase and we would like some feedback on creative ways to solve this problem.

We live in Ga so please advise state laws.

Thanks in advance for your help!
 

[Nathan P.]

Give your parents the 3.5% down that you would be putting toward the FHA. Have a title company transfer the home over to you either by contract for deed or all-inclusive trust deed and note (this kind of depends on the state you are in and the lender you will use in a second.) Take out a personal loan or use 0% interest credit cards to do your repairs. Go out and find a lender that will cash out refinance you at least 80% LTV and use the cash out to payoff your repair costs. If you have money left over then come to an agreement with your parents how much they should get. When its all said and done you should be into it for no money down.

Make sure you do your math, get multiple bids, be conservative, plan ahead, and communicate with your lender what you plan to do. Your on your way!