Making a mortgage loan to a family member can be a win-win deal.
Proper documentation prevents tax problems and protects relationships.
How It Works in Four Easy Steps
Complete our simple online application
Documents emailed for review & signature in 7 business days
Lender disburses funds & documents registered with government authority
Optional loan management & annual IRS tax data
Real estate loans and financial gifts with relatives can be a win-win for both sides, but should be documented properly. 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 many of the same situations you might use a traditional bank mortgage, including:
- To help purchase a home: From primary financing to secondary financing, or even 100% financing.
We want to help you make a loan that you feel good about, that prevents tax problems, and protects your relationship. We want to help your Borrower 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 lend? How much interest are you going to charge? How much can your Borrower afford to pay each month? Our free Family Mortgage Guide has lots of tips and advice on how to work with your Borrower to structure your loan to be 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 Borrower have agreed upon loan terms, it’s time to make the agreement legally binding. Either you or your Borrower may submit your loan details through our secure online Application, with the following exceptions:
(1) If the Borrower’s subject property is in Kentucky, Maryland, Pennsylvania, or Virginia, then the Borrower must submit our online Application and submit our one-time setup fee.
(2) If the Lender lives in North Carolina, then the Borrower must submit our online Application 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 records how the debt is going to be repaid.
Mortgage / Deed of Trust / Security Deed: This is the legal security instrument through which your Borrower offers their property as collateral to you in exchange for the loan. Attached to the Mortgage / Deed of Trust / Security Deed is a legal description of the property that we will obtain from the County authority where the subject property is located.
Within one business day of submitting your online Application, a Family Mortgage Advisor will call you to confirm the details of your loan. Within seven business days of submitting your online Application, we will email you your customized, state specific mortgage documents for review and approval. We will also include setup forms for our optional Family Mortgage loan servicing program.
When you’re ready, you may disburse the purchase funds directly to the Borrower’s closing attorney, title company, or escrow company that will conduct the real estate settlement.
Register the Loan
National Family Mortgage ® will coordinate the government registration of your loan with the Borrower’s closing attorney, title company, or escrow company. This will allow your Borrower to legally deduct their mortgage interest payments from their federal tax return — just like with a bank mortgage.
Manage the Loan
With our optional Family Mortgage loan servicing program powered by FCI Lender Services, Inc., expectations are clear, relationships are protected, and year-end tax reporting is simple.
- Monthly payment reminders and statement
- Electronic payment processing and online account access
- IRS 1098 and INT-1099 tax reporting
- Toll-free customer support