DD is applying to colleges and with our income and assets she won’t qualify for need based aid and we will be full pay wherever she attends. However, she is pursuing merit scholarships where available and will likely be eligible at a few of the schools on her list. A couple schools require the FAFSA for merit applications.
We recently purchased a new home and are renovating it to live in and we still own our current home and it is on the market but hasn’t sold yet.
Does anyone have any tips on completing the FAFSA in this situation? Neither home is an investment property, they both are/will be our primary residence. I would like to just wait until our current home sells but that may be after the deadline for some merit applications. I’m not trying to game anything or shelter assets, just want to honestly represent our financial situation.
Unfortunately, there is no way around filling out the FAFSA that you own two homes. It happens sometimes. You have to fill out the forms with all the information it requests and one of those two homes (probably the one you are working on) is a second home and will be counted as an asset. Maybe you don’t have much equity in it yet if you will pay off a bridge loan when you sell your current home?
Since you won’t get need based aid, it probably won’t matter. Her EFC might go from $30k to $50K, but if you aren’t getting need based aid, it won’t matter (you weren’t getting any at $30k, you won’t get any at $50k). If you think it might make a difference, you can ask for a special circumstances review from the school she picks to attend. You fill out the FAFSA and answer all questions, and then present your situation. You can’t explain on the FAFSA.
@twoinanddone. Thanks, makes sense. It would probably be a wash anyway. The equity in the new home would have been other assets if we hadn’t bought it. Even not considering the equity in the second home, income and remaining assets will still be too high to matter.
Both are not and both won’t be your primary residence. Your own words that you have one on the market implies that one will not be your primary residence.
The truth is, only one of those homes is your primary residence. The one you’re currently living in while filing FAFSA is your primary residence. The one that you’re renovating and not living in, is not your primary residence. (The question of being or not being investment property is irrelevant. Many people have second homes, vacay homes, that are not investment properties…so that aspect isn’t relevant. I also purchased another home that’s being remodeled for future living; it’s not right now my primary home. If I were to file FAFSA today, the home I’m living in would be my primary residence.)
As mentioned above, the one that you’re remodeling may not have a lot of equity in it so it may not impact FAFSA much.
This is a case where filing the FAFSA a little later might help…you might sell that home that’s for sale. BUT will you have money profit from that home sale? If so, will you be immediately putting that money into home 2?
If there is a chance your home will sell, I suppose you could wait. BUT you are saying you won’t qualify for need based aid anyway…so I’m not sure this would matter…at all.