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Long story short it is likely that in the next 12 months a relative will need to be moved from several states away to live near me. The problem is that I will need to find them a place to live, and likely provide most of the funds for it. I have been thinking about renting an apartment for her but lately have been wondering if, as I will have to pay for it and the situation is likely to last for 10-20 more years, it might make better sense for me to purchase a small property for her to live.

I am trying to find out what lenders typically require with regards to down payment and interest rate so that I can do some quick calculations on expected costs and price range. But I can only find info for that for primary residences.

Also, will it matter to the lender that this is essentially a rental/investment not a vacation home?

Any help/advice is appreciated.
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Hi Ed,
Sounds like this relative is currently, or will soon become, a tax dependent of yours, yes?

If so, you may qualify for financing colloquially known as "kiddie kondo terms" through either FHA, or Fannie/Freddie (in other words, all the lenders you'd normally be talking to anyway.)

This allows for the "responsible" family member(s) to apply for and qualify as non-occupants at PRIMARY RESIDENCE rates and terms, as co-buyers/co-borrowers with the financially weaker family occupants. This is one of those rare cases where you are allowed the rates, terms & privileges of primary residence financing on more than one home (in fact, if the ratios work, you could potentially do this on multiple homes for multiple dependent family members.)

If this won't work this way, you'd be financing on terms as an investment property, basically requiring 20% down, at rates 1/4% to 1% above primary residence rates.

Helpful?
Dave Donhoff
Leverage Planner
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In what state does your relative live? Do they have 55+ housing developments? They're often quite nice and relatively inexpensive.

Here's an example…

http://www.delwebb.com
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Not sure about the tax dependent status. I think you have to provide more than 50% of living expenses or some such, and to be frank I just do not know. But thanks for the reminder to figure it out.

The information about the rates was very helpful.
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The issue is as much moving someone away from a bad situation with regards to "friends" as it is moving them out of the currently crappy apartment. Keeping them in the same state may solve one but not both issues.

We have 55+ housing in the local area here and that is one option we are looking into. The big issue that I have is that if I am paying for it in either case building an equity position makes sense over perpetual rent. But I need to run all the numbers and look at risks, time frames, etc. to make a final decision.
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Not sure about the tax dependent status.

Among other things, a dependent must actually live with you. The one exception is your parents. So unless this is a parent, they're not going to qualify as a dependent for tax purposes.

--Peter
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We have 55+ housing in the local area here and that is one option we are looking into. The big issue that I have is that if I am paying for it in either case building an equity position makes sense over perpetual rent. But I need to run all the numbers and look at risks, time frames, etc. to make a final decision.

One thing about old people is that they have a tendency to die. If you are planning to buy a house for them to build up equity, better make sure the numbers still work okay if they die in 5 or 10 years and the house becomes vacant. Or if they get seriously ill and have to move into a nursing home.

My mom was in a DelWebb 55+ community for several years. It was okay, but we really learned the meaning of "condo commando".
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Rayvt: "My mom was in a DelWebb 55+ community for several years. It was okay, but we really learned the meaning of "condo commando"."

Ray, will you elaborate?

Regards, JAFO
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I know exactly what Ray's talking about re "condo commando." I need my head examined for ever moving into housing that's governed by a homeowners association board.
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My mom was in a DelWebb 55+ community for several years. It was okay, but we really learned the meaning of "condo commando".

My father moved to a DelWebb 55+ community about 10 years ago. Note that "55+" only means that group activities are offered (cruises, trips to shows & ball games, dances, etc). No assistance is offered!

Dad's pretty close to needing an assisted living situation. The community offers nothing; we've had to privately hire companies whenever he's needed help cooking, cleaning, dressing, etc. He's very happy where he is now (except for the HOA), and doesn't want to move again, so as time goes on we'll just have to hire companies more & more often.

If I had it to do over, I never would have shown him this community. I would have brought him to CCRC's (independent living thru nursing home) to tour, until he found one of those he liked. It's nuts to have to move every few years as one's needs change. Moving is hard, especially as people get older.
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Rayvt: "My mom was in a DelWebb 55+ community for several years. It was okay, but we really learned the meaning of "condo commando"."

Ray, will you elaborate?


The one case that really struck me is this:

Mom had one of those fake topiary plants with the globes, like http://st.houzz.com/simgs/90517f5f01364aa4_3-2550/modern-pla... on her front porch.

One February she got an official notice bringing to her attention that holiday decorations are required to be removed within 2 weeks after the holiday, and that Christmas was 6 weeks ago.

We couldn't figure out what the complaint was about, and then we realised that it must have been about that NON-HOLIDAY topiary plant.

Cr*p like that happened all the time. Old folks with nothing to do drove around on their golf carts looking for something to tattle about.
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My parents retired early at 55 and 53 and moved into a 55+ community in the late 90's. They sold and moved out a couple years ago because it was depressing being around old people just waiting to die.
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We couldn't figure out what the complaint was about, and then we realised that it must have been about that NON-HOLIDAY topiary plant.

Cr*p like that happened all the time. Old folks with nothing to do drove around on their golf carts looking for something to tattle about.


I keep saving and saving. Some day I'll retire with enough money to live out my dream. Which is violating as many little piddly HOA rules as possible, and just paying the fines instead of ever correcting the violations.

Oh yeah, all this will be in a second house that's vacant. I won't even live there. I'll just buy a house in whatever neighborhood has the most persnickety HOA, and visit it occasionally to make sure it's as annoying as possible and pick up the violation notices/fines from the mailbox.

xtn
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