We have a daughter that is a freshman in a VA public university. We live abroad in a rented house. We own two homes, one in VA and one in MD. Both are mortgaged and rented. We have been paying off the MD home since it has less resale value. Last year, while filing FAFSA, we listed the equity of both houses as investment (I am thinking now it was a mistake since we should have used the equity of the MD home as principal residence equity). As a result, our share of college was about 30k. This year, when our second daughter goes to college, we were making the same mistake again to realize that we should declare MD home as principal home and ignore its equity. It’s close to being paid off. I have two questions:
Can we be domiciliary residents of VA and still claim the MD home as principal home for financial aid purposes?
Can we even call a home whose equity we have been aggressively building while living abroad from where we plan to return (we don’t plan necessarily to live in this MD home)?
We need to refile FAFSAs and CSSs since now we have two 30k payments lined up for two students because of the house we have nearly paid of.
Sounds to me like you’ve correctly completed the forms but are unhappy with the EFC. I would contact the CSS help desk and ask them about reporting both homes. I’ve found them to be helpful when I was confused on what numbers to report. Later if you are questioned you can refer to the answer provided. As far as your specific questions:
VA has strict rules on claiming in-state residency, I'd step through them. They require things like a VA drivers license, VA job, taxes paid as a VA resident, voter registration and where you voted, etc.
Listing your MD home as primary will present other questions. For sure it will eliminate in-state tuition. Do you report both houses as rentals on your US taxes?
Both FASFA and the CSS Profile use your US taxes to verify the info provided. CSS will also require paystubbs, plus they use the equity in your primary home anyway. Sounds to me like your strategies don’t meet their criteria but a quick phone call to the school can answer that.
Thanks. I checked with the VA school just now. They say the house that you live in is the principal residence. I think the best alternative is to move to US and have the house in MD sold to pay off the one in VA. The VA school excludes equity in primary home and doesn’t count it as asset. It’s much cheaper this way than to work one’s back off abroad and paying $60k plus in tuition because of house equity counted as asset.
Are you still considered residents of VA even if you don’t (temporarily) live there? Are you still paying VA taxes?
Are the girls considered instate students?
Can you declare the VA or MD home as your principal residence if you don’t occupy them and rent them out?
Seems like you don’t qualify for any need based aid with even two in college so your EFC must be pretty high.
We pay VA taxes. We don’t own anything abroad and live in employer provided housing. It’s true that some income is exempted. I guess we just need to crunch numbers to see if the income abroad minus exemptions could be less than what we are paying for two students since our paid house is considered an asset.
Congrats homer for your D getting merit scholarship. Our third daughter also has a part merit scholarship so we are tilting towards that. This college is not adding the rental value of our employer provided housing abroad but it is using our equity in both houses as assets. The competitor college is adding the value of employer provided housing but might consider one of the houses in US as principal (we will find out). So in the end a lot of calculations exist.
If you own a house, but you don’t live in it, and someone else pays you rent to live there, that house is not your principal residence. It’s an income producing rental property.
You didn’t make a mistake. Your primary residence is where you reside…which is abroad. The two houses here are rental properties…rented to others. A house rented to others cannot be YOUR primary residence. Think about that.