My parents inherited my grandfather’s house along with 2 other siblings. The house is vacant while under going repairs to be put on the market. How does this property affect the FASFA and applying for financial aid? Do I have to add 1/3 of the value of the house on my FASFA?
Yes, you have to report 1/3 of the value of the house as an asset of your parents.
Yes, if it is owned outright.
A little more information about the property. If the house is valued at $200,000 but needs approx $20,000 work is the value 1/3 of $200,000 or $180,000? My parents are also paying 1/3 of the taxes on the house. Does that count for anything?
The property taxes don’t matter.
The repairs don’t matter.
What matters is the value of the house. If there is no mortgage on this house, your oarents must list their share of the value on the FAFSA.
The reasoning is that this is property that can be sold or borrowed against for college expenses. They don’t give you aid so you can keep a second house, which is the situation at this time. After it is sold, it is a cash asset that you have that will also count as part of the asset formula. The timing isn’t your parents fault or the college’s problem. It is what it is-- at the moment you fill out the fafsa. Either a property or cash that you have as an asset.
What is the rest of the financial situation? For govt aid only, you have to be pretty low income to get any grant, under 40k at least–less even. And FAFSA entitles every student to a limited student loans. But for schools to give their own aid, some do use the FAFSA info only and some want more info. So different schools will count the value of the house differently. They have their own formula to use.
Can she reduce the market value by 20% for quick sale bringing the value to 1/3 of $160,000?
Our income hovers around $60k and my son got a small Pell grant (~$1k). It was enough to cover his books for the year and he had a couple hundred left over. We don’t have any assets other than our primary home, though, and I don’t believe that’s counted when determining eligibility for federal aid.
Post #5 - yes, you should list the price the property is valued at today, prior to repairs. How much could you sell if for today.