A little help from the parents…

“First-Time Buyers Can Get Help From Parents, Perks”
Investor’s Business Daily (04/03/09) P. A6; Doler, Kathleen

Significant home-price declines in many markets are making it possible for first-time buyers to achieve ownership. The National Association of Realtors (NAR) says affordability has hit an all-time high, with a family earning the U.S. median income for $59,800 eligible for a mortgage on a $266,700 property with a small down payment. First-time buyers also have access to a federal tax credit of up to $8,000, and many are receiving help from their families. NAR notes that 26 percent of first-time buyers make a purchase with a gift from family, and Internal Revenue Service rules allow parents to give monetary gifts of $13,000 without paying taxes. Experts say first-time buyers generally find FHA loans to be the most flexible, allowing down payments of just 3 percent, making it possible to finance FHA mortgage insurance, and permitting family members or nonprofit organizations to contribute the full down payment and closing costs. Furthermore, FHA loans allow any number of family members to act as co-signers, though co-signers must be aware that they will be held responsible for paying the loan if the borrower defaults.