as far as a loan from your parents goes, the short answer is sure, why not! if they are willing and able to make the loan this is easily accomplished.

the more complex question is whether they are willing to pay taxes on the interest you would have to pay to a third party lender. IRS has specific regulations on this, which set out the specific floor (minimum) interest rate threshold.

Secondarily, I understand that the IRS will impute a gift from your folks to you in the amount of the interest that you are not paying (and for which your parents would be obligated to pay income tax). this could (likely would) trigger a gift tax liability as well.

i'd more formaly consult with a lawyer and/or tax advisor before taking action.

if they are buying the condo with you (or for you) there would not necessarily be income tax consequences, although there could still likely be gift tax consequences.

either way, your parents will definately want to consult a tax advisor for a formal opinion/guidance.

cheers!

Tom,

Yes you are correct. As to whose name it would be in, that's part of the question. Obviously I'm looking for whichever way it would work better, or if this is even possible.

Jim,

I would talk to a tax accountant but it seems pretty straightforward. It would be a simple loan that would be repaid without interest to your parents in the same way you'd repay the bank. You wouldn't receive any tax deductions but you're also not paying any interest on the loan amount. Everything would likely need to be in your parents name so that it doesn't appear as a gift. However, a gift may be triggered once the $500,000 cost basis is take into consideration and subtracted from the value of the asset at the time you become the owner.
I'm not a tax advisor or an accountant and have not advised anyone in such a transaction and am intrigued to see other answers to your question.

Good luck, Ken.