Buying a home from a family member can be a win-win deal.
Proper documentation prevents tax problems and protects relationships.
How It Works in Four Easy Steps
Gather information & submit online Setup Form
Documents emailed to family for review within 7 business days
Documents emailed to Borrower's closing agent for execution/recording
Lender disburses money to closing agent. Optional loan management & IRS tax data
Real estate loans and financial gifts with relatives can be a win-win for both sides, but should always be documented. National Family Mortgage ® helps minimize the legal and federal tax consequences that can occur when family real estate loans and financial gifts are documented improperly – or not documented at all.
You can use a National Family Mortgage ® in lieu of traditional financing to facilitate:
- Seller Financing: Finance the entire purchase price of the home, or offer a second mortgage to compliment a primary bank loan.
We want to help Lenders make loans that they feel good about, that prevents tax problems, and protects family relationships. We want to help Borrowers fund their dreams and stay on track with payments. Our goal is to make family mortgage lending and borrowing safe, easy, secure, and successful.
Please be sure to review our company Standards for complete restrictions and limitations.
Structure the Loan
How much are you going to owe your Seller / Lender? How much can your Borrower afford to pay each month? Our free Family Mortgage Guide has lots of information on how to work with your Lender to ensure your National Family Mortgage ® is a complete success. We also have some great calculators on the Products / Pricing page to help you get started.
Document the Loan
Once you and your Seller / Lender have agreed upon loan terms, either you or your Seller / Lender may submit your loan details through our secure online Setup Form, with the following exceptions:
(1) If the subject property is in Kentucky, Maryland, Texas, or Virginia, then the Borrower must submit our online Setup Form and submit our one-time setup fee.
All National Family Mortgages ® have two crucial components:
Promissory Note: The Promissory Note establishes the legal debt between the parties and documents how the debt is going to be repaid.
Mortgage / Deed of Trust / Security Deed: This is the legal security instrument through which you will offer the property as collateral to your Seller / Lender in exchange for the financing.
Within one business day of submitting your online Setup Form, a Family Mortgage Team Member will call you to confirm the details of your loan. Within seven business days of submitting your online Setup Form, we will email your comprehensive loan documents for your review and approval. We will also include setup forms for the optional Family Mortgage loan servicing program.
Register the Loan
National Family Mortgage ® will coordinate scheduling details and expectations with your closing attorney, title company, or escrow company that will otherwise conduct your real estate settlement. Please note, there is generally only one settlement agent, be it an attorney, title company, or an escrow company. The type of settlement agent is determined by state regulations and customs.*
After you have reviewed and approved your loan documents, the documents are emailed to your settlement agent. The settlement agent will oversee the execution and government recording of your Family Mortgage.
* If your property is in Texas, we require your real estate closing must be conducted by either a Texas law firm or a Fee Attorney. A Fee Attorney refers to a lawyer who has entered into a contractual relationship with a title insurance company, or who serves as an agent of a title insurance company, to close real estate transactions on its behalf in exchange for a portion of the title insurance premium.
Manage the Loan
Optional Family Mortgage loan servicing program, powered by FCI Lender Services, Inc., sets clear expectations, protects relationships, and makes year-end tax reporting simple.
- Monthly payment reminders and statement
- Electronic payment processing and online account access
- IRS 1098 and INT-1099 tax reporting
- Toll-free customer support