So this isn't something that's on the immediate horizon for me, but I've been thinking about the future when my parents can no longer work and will have to rely solely on SS. (Unfortunately they have zero savings and have always been terrible with money.)

So what I'm thinking is I'd like to buy a house, under my own name, for them to live in. It would not be my primary residence. (Would probably be my first house purchase, too.)

So I'm wondering what the best way to go about this would be, in order that:

1. I don't create any tax events for my parents, such as gift or property tax.
2. They're able to live in the house rent-free, without having to declare any income.

What is the best course of action for how to achieve this? Ideally I'm hoping that they have zero financial burden or negative tax implications such that their benefits get limited by living in the house rent-free.

Would there be any reason for them to have to pay a small amount of rent in order to do this?

I plan to talk to a tax professional of course, but just figured I'd throw this up in case people have any experience with this.

Do you plan on making real estate/rental properties part of your investment portfolio as you get older? Or would you sell the property once they passed/were unable to live on their own anymore?

That'll hopefully be pretty far down the line, but I would most likely sell the house once they are no longer able to live in it.

Not planning on making real estate a part of my portfolio outside of this.

Keep the hose in your name. If your attorney seems nervous make them pay utilities.

You will buy the home as an investment property. So 20-25% down and about half a point in rate above market rate for primary. You will need to qualify with enough income to cover both your housing expense and theirs. Housing is principal+interest +taxes+insurance. Not utilities.

Of course you could pay cash. The how is it your name an on your taxes. They do not have to pay rent or other expenses if you decide not to receive any.

I don't know if it's still a thing, but back in 2012, my wife and I bought a house for my parents. We procured a special kind of mortgage that was suited for buying a home for parents or children. It was considered "owner-occupied", so we were only required to put down 5% or so. It wasn't treated as an investment property.

Twelve years is a long time, so I don't know what might have changed since then.

I've never seen that loan marketed by a lender. Note the article was updated 9/24 but does not say when it was originally published. Might have to really search to find it if it is out there. Jay may have it.

Another option is put one of the parents on the loan. Then it becomes a primary. But then debt and credit score of the parent factors into the loan approval.

Did not know about this, thanks for that info. Will definitely look into it.

And thanks for the link Chris.

Pretty much a middle of the fairway mortgage product. Find someone that is familiar with the guidelines.

https://www.dsldmortgage.com/blog/fannie-maes-family-opportunity-mortgage/

I'm remembering this morning that it was through Regions Bank. Both of my parents are no longer alive and we've long since sold that house. I never throw anything away, so I might have some kind of documentation at home with more info. Again...twelve years is a long time...

Doug Cellner at Amegy Bank has done a number of these family opportunity mortgages which offer primary home terms.
832 816 9374.

Family across the street lived in the house for a few years, I assume on a primary mortgage. They bought a bigger one down the street recently, assuming on a new residential mortgage, and didn't sell the old one. His parents just moved into the house.

Is you buying it for you to live in first an option?

Yes

SteveBott said:

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Yes

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Thanks for answering OP

Where is the poster who pimped his kids when they bought homes? He had the answers.

That's what I was going to ask. Especially if you have enough cash to buy it outright. Maybe you could set it up where your parents buy it with a loan from you? The gift tax minimum is likely high enough that you could officially have them pay you $1 per month and goft the rest and maybe be okay. That would save on the property taxes (homestead exemption, freezing taxable value) and then you would receive it back on the other side as long as they arent prone to beinging scammed.