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!