Good Luck with your purchase.
Hope you got grandpa's house :)
Highly suggest you get a estate/trust or real estate attorney and ask these questions. You may have tax consequences to consider in getting the equity gift which could cost you out of pocket at tax season. Most lenders should be able to clear up whether the equity can qualify as down payment--but your own lender will have to do their own appraisal and determine the loan to value they seek--which may be around 80% of value. You might try either George Carberry (Corp) or Bill Ferngren (real estate), both attorneys in Valparaiso.
The Matt Evans Team
Keller Williams Realty Leaders
About is it allowed for financing, yes, both conventional and FHA loans allow the entire down payment to be in the form of a gift of equity. Here is the blurb from my conventional underwriting manual:
A gift of equity is permitted for purchase of a primary residence The LTV should be calculated based on the purchase price or appraised value whichever is less. (The gift equity may not be deducted from the sales price before calculating LTV). With a gift of equity, no cash changes hands. Instead, the seller agrees to donate a portion of the equity in the subject property in lieu of all or a portion of the down payment.
Gift policy criteria must be met. If the LTV exceeds 80%, at least 5% of the down payment must come from the borrowerâ€™s own funds.
The following documentation must be obtained to verify funds:
Demonstrated family relationship; and
Gift letter explaining the type of gift is required; and
Gift of equity must be identified in the Sales Contract
Hope this is helpful.
Info on Rent to Own:
Info on the criminal side of Credit Repair:
Info on Down Payment Assistance in Kentucky:
Monty Willis Team PC