<p>What about TWO primary residences? For instance, married parents living separately due to jobs, or divorced parents, each with their own houses? How does this go on the FAFSA? Especially if the married parents file jointly? And what about contributions to a Roth IRA? That's a retirement plan that is not shown/deducted on taxes at this point. How does FAFSA know where that money is being put?</p>
<p>FAFSA is for the custodial parent and that parent's spouse, so the ex's house, assets, etc. don't matter. If you're divorced, it's unlikely that you'd be filling out the FAFSA with your ex. :)</p>
<p>The assets in the Roth don't count; the money deposited into the Roth THAT YEAR (for which the FAFSA is filled out) does, just as you would expect it to.</p>
<p>OK, what if parents are married, file jointly, but live is separate owned houses/residences? Both residences being PRIMARY residences for them? Of course both being declared on their taxes for interest, taxes, etc? Neither property is rented out? Of course I realize these are unusual circumstances, but Im sure they happen often enough.</p>
<p>The money put into a ROTH that year was not subtracted from your AGI, therefore it is not added back...it never affected it.</p>
<p>churning, in the case you posit, IMO, the primary residence would be the one that the student lives in. The second residence would be considered an asset. The fact that the parents live separately is a choice, be it for jobs or whatever, and it is that choice that is considered.</p>
<p>How much of home equity do the profile schools consider as an asset? </p>
<p>I think some have a cap on the primary residence equity like 1.5 times income but is there any uniformity or just up to each school's FA department on how they treat home equity?</p>
<p>"How much of home equity do the profile schools consider as an asset?"</p>
<p>Not much uniformity. </p>
<p>Some consider full equity (value less mortgage) as a reportable asset. The strict Institutional Methodology works that way.</p>
<p>Some privates cap the amount of equity that's a reportable asset at 2.4 X AGI minus mortgage debt. Some at 2.0 X AGI minus mortgage debt.</p>
<p>Some cap equity at 1.5 X AGI (not subtracting mortgage debt). </p>
<p>So for folks that are otherwise eligible for need-based aid, but are house-rich and income-moderate, best to find out early what the policies are of the Profile schools you're applying for. Not all finaid staff are able to answer this question intelligently, though.</p>
<p>The treatment of home equity can make the difference between no financial aid, and a significant generous aid package.</p>