If you have family members willing to lend you money for a mortgage or down payment, you can take out a loan from them with an applicable federal tax rate. This option lets you pay less interest and keeps the money from being considered a gift by the IRS. This way, the loan is legal for everyone, and the lending family members get a stake in the mortgage by getting the interest paid back to them. It’s an excellent option for older family members willing to help first-time homebuyers invest in the market without just gifting them the money.
