good afternoon...ask a tax accountant the tax question..but i can help you with how to finance it.........assuming your credit is okay....go for conventional financing....you don't need fha unless your debt ratios are a bit high or credit issues...ask a local lender to figure the amount of closing costs and pre-paids, and add that amount to the amount you plan to give the parents for the home, add also any seller costs such as seller's title and possible transfer tax, etc...........the difference betweeen that total and the current market value, can be written as a gift-of-equity...that will also avoid pmi and escrows being required...assuming the ltv is under 80%..list the $ amt. of the required seller concessions just as any other concession...on the pa. any tiel company can help you thru the disclosures, p.a. etc, etc.....depending on the ltv.the allowable seller concession should about zero you out.....the only out of pocket expense you will have is the first year's hazard insurance and possibly the appraisal...the rest can be rolled into the deal........if the gift of equity exceeds 20% then having 5% of your own funds is typically waived........good luck.....bob mcclure- success mortgage partners- plymouth, michigan.....

good afternoon...ask a tax accountant the tax question..but i can help you with how to finance it.........assuming your credit is okay....go for conventional financing....you don't need fha unless your debt ratios are a bit high or credit issues...ask a local lender to figure the amount of closing costs and pre-paids, and add that amount to the amount you plan to give the parents for the home, add also any seller costs such as seller's title and possible transfer tax, etc...........the difference betweeen that total and the current market value, can be written as a gift-of-equity...that will also avoid pmi and escrows being required...assuming the ltv is under 80%..list the $ amt. of the required seller concessions just as any other concession...on the pa. any tiel company can help you thru the disclosures, p.a. etc, etc.....depending on the ltv.the allowable seller concession should about zero you out.....the only out of pocket expense you will have is the first year's hazard insurance and possibly the appraisal...the rest can be rolled into the deal........if the gift of equity exceeds 20% then having 5% of your own funds is typically waived........good luck.....bob mcclure- success mortgage partners- plymouth, michigan.....