Ashburn, VA asked in Civil Rights, Consumer Law and Real Estate Law for Virginia

Q: Hi, Can i gift out my newly FHA/VA Loan house to my parents?

I bought the house but want to gift out this house to my parents

1 Lawyer Answer
Richard Sternberg
Richard Sternberg
  • Potomac, MD
  • Licensed in Virginia

A: If it is yours, you can surely gift it. Either a quitclaim deed or a warranty deed will do the trick. I'd have to check, but the transaction may be tax-free, like a transfer between spouses. If not, there will be transfer and recordation taxes. The mortgage loan to a near certainty has a due-on-sale clause, so you will need to pay off the note in order to record the deed.

If you want your parents to live in the house while you pay the mortgage loan, there are a number of other arrangements, including a trust, which many lenders do not consider a sale or a lease with option to buy including favorable rent and purchase terms.

There are serious issues of inheritance, taxes, and loan fraud to discuss here, and doing this as a DIY project is just plain foolish. Consult with a lawyer.

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Anthony M. Avery agrees with this answer

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