Always invest
in family®

Prevent IRS scrutiny. The current IRS annual gift tax exclusion is $18K per person. If you simply transfer the deed to your home to a relative, the IRS may treat the fair-market value of the property as a reportable gift. In order to prove the exchange of value is a legitimate loan and not a potentially gift, you must both properly document the transaction as “Seller Financing” and also report earning interest at a rate equal to or above the minimum rate required by the federal government, called the Applicable Federal Rate (AFR). Even if you document the loan, but report earning less than the appropriate AFR, the IRS may impute the interest as income and also view the forgone interest as a financial gift.

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. The government recording of the mortgage will allow your Borrower to legally deduct their mortgage interest payments from their federal tax return — just like with a bank mortgage.

See IRS Publication 936 or
IRC 1.163-10T(o)

Proper documentation sets clear expectations and prevents future misunderstandings with your loved ones. If anything happens to you, your registered mortgage documentation also protects the interests of your other children or family members who could be affected by the proper accounting of the loan. Optional, Dodd-Frank Act compliant, loan servicing platform reduces awkward conversations, processes monthly payments, provides year-end tax statements for the IRS, and keeps everything business-like.

What are bonds, CDs, or savings accounts paying these days? Invest in a loved one; loaning money to a trusted family member can earn solid returns. Spread out the capital gains tax from the sale of your home. From primary financing or secondary financing, we have a solution that fits. The emotional returns are strong, too!

Your National Family Mortgage ® will generate a recurring monthly cash revenue stream from payments by your Borrower. This is an attractive feature relative to many other conservative investments. Reinvest the money or spend it however you choose.

People get divorced. Sometimes, loved ones die unexpectedly. It’s no fun to think about, but it happens. Protect your family wealth from disagreements with your loved one’s ex-spouse or surviving spouse. With a National Family Mortgage ® the Borrower’s shared responsibilities are clear and your investment is protected, just like a bank, by a registered mortgage lien secured by your old home.