A Structured Framework for
Intra-Family Mortgage Planning

What types of advisors work with National Family Mortgage®?
We work with financial advisors, estate-planning attorneys, CPAs, trust officers, and real-estate professionals whose clients are considering structured intra-family mortgage or seller-financed home transactions.

We support advisors and professionals in qualified situations in whatever capacity is most appropriate. Some advisors prefer to be closely involved, while others take a more hands-off role. Our goal is to support both advisors and families in a way that is clear, efficient, and aligned with everyone’s expectations.

What types of family relationships qualify?
At least one lender and one borrower must be immediate family members (parents, grandparents, children, or siblings, including adoptive and step relationships). Seller-financed transactions may also include aunts, uncles, nieces, or nephews. Trusts may be involved where the trustee and counterparty share a qualifying family relationship.

What transaction types does National Family Mortgage ® support?
We support intra-family financing for home purchases, seller-financed family sales, refinances, and home-equity transactions involving residential real estate.

Each product Guide includes a Top Ten Dealbreakers section to help families and advisors assess whether a particular situation can be supported.

How do AFRs factor into family mortgage planning?
Federal tax rules require adequate stated interest on certain related-party loans. Many families use IRS Applicable Federal Rates (AFRs) as a benchmark to help align loan terms with federal expectations and reduce the risk of imputed interest or unintended gift characterization.

Is AFR compliance sufficient by itself?
No. AFRs address interest adequacy only. Proper documentation, repayment behavior, security, and consistent tax reporting all matter. Advisors should evaluate the transaction holistically.

How are interest income and deductions handled?
Interest income is generally taxable to the lender. With a properly documented and recorded mortgage, borrower home loan interest (purchase money debt, refinanced purchase money debt, and certain home improvement debt) is generally tax deductible on the first $750,000 of loan principal. Home-equity debt not used for qualifying improvements is generally not deductible.

Reporting should be coordinated with the client’s tax advisor. Many National Family Mortgage ® clients participate in optional, Dodd-Frank–compliant loan servicing powered by FCI Lender Services, Inc., which supports year-end reporting.

Will my clients need a settlement agent or title company?
Yes. Even family transactions involve real property and typically require a settlement agent or title company to handle the loan closing, funds flow, document recording, and title matters. National Family Mortgage ® connects with the borrower’s settlement agent to support a smooth transaction.

Are advisor-involved transactions more complex?
They can be. Refinance and home-equity transactions often require clients to source and educate their own settlement agent, unlike purchase transactions where agents are typically introduced by real-estate brokers. The Guides address these differences in detail.

Can family loans exist alongside bank mortgages?
Sometimes. Institutional lender policies vary, and family loans must be disclosed and documented properly. Advisors should review bank requirements early in the process.

The applicable Guide discusses these coordination issues in detail.

Is loan servicing required?
Loan servicing is not legally required, but it helps maintain accurate records, consistent payments, clean tax reporting, and can reduce family friction—particularly over long loan terms.

How does optional loan servicing work?
When families elect servicing powered by FCI Lender Services, payments are processed, records are maintained, and annual tax forms are issued. Optional API integrations may support advisor dashboards and reporting workflows.

Does servicing help with estate and reporting continuity?
Yes. Professional servicing creates a documented payment history that can simplify estate administration, advisor oversight, and long-term recordkeeping.

Will this reduce assets under management?
Family loans are not securities, but they are income-producing assets secured by real property. Many advisors incorporate them into broader planning, reporting, and management frameworks.

Is this defensible if reviewed by the IRS?
No structure eliminates audit risk. Proper documentation, AFR-compliant interest, consistent payments, and accurate reporting strengthen defensibility.

What happens if the borrower or lender dies?
The loan generally becomes part of the estate and continues according to its terms unless modified. Clear documentation simplifies administration and reduces disputes.

When is an intra-family mortgage a good planning tool?
It can be appropriate when families want to:

preserve wealth within the family

avoid unintended gift treatment

create predictable cash flow

maintain enforceable expectations

When may it not be appropriate?
It may not be a good fit when:

repayment is not realistically expected

family dynamics make enforcement untenable

clients are unwilling to document or administer the loan properly

the transaction has already occurred informally

the situation is too complex or unusual for the platform

Advisors should assess both financial and relational suitability before recommending this approach.

Clients should review the applicable National Family Mortgage ® Guide in full before moving forward. The Guides provide detailed explanations of structure, process, costs, and limitations for each use case and are intended to support informed decision-making by both families and their advisors.

If, after reviewing the appropriate Guide, you or your clients still have unanswered questions, we encourage you to Contact Us. We are happy to clarify anything that may be unclear or to address questions that are not fully resolved by the Guides.