<p>I am in the process of completing my FAFSA. For the past 2 years in college, I have received full financial aid due to my parents' low income. However, the problem with this year is that my parents recently bought a new house. We took a mortgage on the new house, but we are in the process of selling our old one (it's paid-off). Would owning two houses affect the availability of my financial aid even if we are not receiving rent from the old house? Should I do my FAFSA after we sell the house? We might not sell our house in time. I am running on a deadline here so that's why I want to know if having two houses would affect my financial aid. Thanks.</p>
<p>Well, if they sell the house then they’ll have a bunch of money… so not sure how that would be better than having the second house. Either way --house or money-- it’s an asset. Your parents will have some asset protection, that will shield part of the value at least. Any remaining portion that is not shielded would only be assessed at 5.6% as available to pay for college.</p>
<p>Anyway, in this market I wouldn’t be optimistic they can sell it very quickly.</p>
<p>Are they planning to sell the old house and immediately put any profits from it into the new house? That would then be good.</p>
<p>Problem is…even IF the house sold to someone today, it can be up to 90 days before the closing takes place and your parents no longer own the house. Did they mortgage the OLD house, perhaps, to pay for the new one? That would diminish the equity in that old house which is what you show on the FAFSA.</p>
<p>The reality is…your family now has two houses, something most families can’t afford to own.</p>
<p>WE have a rental condo that also is paid off. So although my DH is a state worker, our efc was about 1/4 of the value of the condo. The condo is valued at 250K and our efc is 63K this year for my son. It is clear FASFA wants us to sell the condo in this down market and use all the proceeds on our DS. Of course, I am sure his younger sister would have something to say about that scenario. We realized the condo would be counted against us so we had our son apply to schools with good merit aid, we just didn’t realize how big a hit it was going to be. Like your parents, our primary home has a mortgage on it.</p>