I can go into detail if need be, but the gist of it is that we moved from our home my parents bought when I was born, to another house which we are currently renting across the country for my father’s job. He can afford to pay the rent here, and he’s pinching around to pay the mortgage there as well since we don’t have a tenant in it currently. How can we reflect this living situation on the FAFSA or other financial aid forms. We’ve already submitted the FAFSA not including this information, and my financial aid package reflects us being expected to pay more than we can afford.
You can only have one primary residence. You get no ‘credit’ for renting a place to live as they assume everyone has the cost to live, either in a rented apartment, an owned home (with a mortgage), etc.
If your old home is not your residence, you must claim it as a second property (the value as an asset, any rental income, etc). If it is still your permanent residence, then you don’t have to claim it (but nothing extra for the rental costs).
It’s actually financially worse if you do rent it, because then it isn’t your residence. The question may be are you going to qualify for need based aid anyway, and that depends on the schools you are applying for. Sometimes people worry about things like this and in the end they don’t make any difference if the income is too high to qualify for need based aid anyway.
“my financial aid package reflects us being expected to pay more than we can afford”
Unfortunately this is relatively common in cases where a family’s financial situation does not fit into “normal” categories. Having rental property is one thing that often makes a family unable to pay as much as the financial aid computations think you should pay, and having a home which you own but don’t live in is likely to have a similar effect.
Renting your other home is going to increase your family’s income, which will also increase what you are expected to pay. Renting out property also comes with significant risk.
In cases such as this, many families that I have known or talked to have needed to stick with their in-state public schools (or in a few cases go to university in Canada – where some schools are about the same price for international students as in-state public schools are for local students). Unfortunately, moving between states can also complicate the issue of figuring out which universities would consider you to be in-state.
That other home is a secondary piece of real estate…it’s not your primary residence. So it’s counted as an asset on the FAFSA…well…the equity is.
Your parents could sell that other house. Why aren’t they doing so?
Need based aid is NOT awarded so that families can maintain ownership of homes they don’t live in.
Just selling the house would not help as it just transform the asset into another form.
@thumper1 Thanks for the info all of you. I am one of five children. My parents don’t want to sell the house as they feel they’ve invested too much already (about 70,000 of the 150,000 due I believe), and also the fact that they don’t feel they should have to pay for my college at all. Another long story but to make it short as we are a minority family (African-American), when my parents went to college it was easier to guarantee them a full-ride to the in-state college of their choice because they were minorities and if they could have whatever grades they wanted and still get in (this was 20 years ago). Though times have changed and schools aren’t handing out money like they use to, my parents still have that mindset that people should be throwing money at me because of my semi-decent grades.
If you have good grades and test scores and aren’t picky about where you go to college, you might find some good options in the thread about guaranteed scholarships at the top if this forum. Many of the cut-off dates are past, but you could take a gap year and work and save a bit of money then apply for fall 2019.
Is your current rented home a temporary situation with your dad’s job? Is the intent to return to your owned home at some point?
I’m not sure that the owned home would be counted as a second home since you only own one home and you’re not renting it out.
When i was a kid, my dad’s job took us to florida for a bit. My parents kept their Calif home, we rented a place in Florida, and when the job was finished, we returned to our home in Calif. It was like a long business trip.
If that happened today, i don’t think my parents would consider their Calif home as a second home. It was their primary residence…not rented out…and with full intention to return.
I suspect some military families find themselves in similar situations…owning their primary home…and being stationed/renting elsewhere for periods of time. I doubt their homes (their only property owned) would be considered a second residence on fafsa, but maybe i’m wrong.
@kelsmom can you weigh in here.
Your parents won’t pay for any of your college costs at all? What state are you currently residing in? If you have high stats, you may get merit aid but it’s going to be difficult to find a full ride. Do you know your family’s EFC?
Were you accepted to Cornell during the ED round? They are not going to ignore the house. Did you run the net price calculator and have a discussion as to how much they are willing to pay for you to go to college?
It does not matter that your family is AA. It does not matter that they are sending money to take care of relatives. Your parents made a choice to have a house in one place and work in another place. They are still first in line to pay for you to attend college. As others have stated colleges are not going to give you other parent”s money (where do you think funding for financial aid comes from—the generosity of other people’s parents who contribute to the school), so that they can fund a second home
If your parents are not willing to pay, you need an affordable option, which is your local college where you can live at home
It’d help if you indicated what state you live in.
What’s your EFC?
How do your parents expect college to be paid for?
(Full rides aren’t common at all anymore. Some depend on stats but deadlines were in December, and some depend on finances ie., depending on your EFC. And loans are limited to 5.5K for a freshman. Since a full ride is highly unlikely, do your parents expect you not to go to college?)
Did you indicate your primary residence as the house you own or the apartment you rent on FAFSA? Did you apply to a CSS Profile school?
I suspect some military families find themselves in similar situations…owning their primary home…and being stationed/renting elsewhere for periods of time. I doubt their homes (their only property owned) would be considered a second residence on fafsa, but maybe i’m wrong.>>
I don’t know of anyone who can afford to let a second home sit empty for several years while stationed elsewhere. They rent it out to try to cover expenses.
Your whole family has relocated across the country to live in a new state. You will graduate from high school in that new state, right? Your primary residence is in that NEW state. @mom2collegekids your story is a generation old…and even your situation might not be ignored in the college institutional need based formula now by most places.
To the OP…how much equity does your family have in that house? That is the current selling value minus the remaining mortgage?
I also feel like we are missing some of this story. What is your family income? It might not just be the house.
And FYI…there are a lot of colleges that will consider the equity in this house even as a primary residence…at least a portion of it. Schools that use the Profile very often consider primary home equity in their calculations to some degree. A few very generous schools don’t use it at all…but others do.
And…you knew about this second home situation and how it might affect need based aid…back in August. Here is your thread from that time.
The home you are talking about is in Kentucky. What is the equity in that home?
@thumper1 sorry for the late reply, I had some other matters this week. The Equity of that home is I believe around 73,000. My father is the sole breadmaker, and he makes about 106,000 a year. I redid my FAFSA not to include their house, as I did some research and I’m not legally obligated to include it as it isn’t my primary residence and is a liability to us rather than asset. That brought the EFC down to around 11,000. 10,000 difference much more manageable. I should be able to work through college now to pay that off.
I’m confused…you excluded that secondary piece of real estate from your FAFSA?
I believe you are REQUIRED to list it…because it’s not your primary residence. It is a piece real estate your parents own and it’s NOT your primary residence. It’s an asset for FAFSA purposes…and Profile as well. That $73,000 in equity is an asset.
Or am I missing something.
What makes you think you don’t need to include this on your FAFSA?
You do understand that if you receive need based aid by knowingly withholding financial information…it’s considered fraud.
Thumper’s confusion is understandable, because based on what you’re saying, you have this backwards. You are obligated to report the property because it’s not your primary residence, and since there is $73k in equity it is an asset and not a liability.
$73,000 in additional assets will add about $4000 to your family contribution.
Well, she said there was a mortgage owed on the property, so the asset may not be valued at $73k.
@twoinanddone the equity is $73,000. Home was purchased for $150,000.
In reality…the equity MIGHT be more than $73,000. It sounds like the OP subtracted the loan balance from the original mortgage amount…when really equity is the CURRENT value minus the remaining mortgage. So if the property has appreciated in value…the equity could be higher!
ETA…regardless…this home MUST be listed on the FAFSA as an additional piece of real estate…unless there is something the OP has neglected to share here…like they sold the house.