My mom wants to buy a small home valued at $35,000 and put it under my name. At the moment I am receving financial aid and a pell grant of $6,000 for school. That home that she is buying will be our primary home. Would i lose my financial aid and pell grant if it goes under my name?
Thanks
Why does your mom want to buy a house and put it in your name?
To be honest, this isn’t probably a good idea for you. It has nothing to do with financial aid, but everything to do,with the liability of owning a house…including paying bills associated with it.
In my opinion, the house should be in your parent’s name.
I don’t think the parents’ primary residence is counted as an asset, but student assets are assessed at 20% of value. So if your mom puts $10k down on this house, I think it would add $2k to your EFC (you’d lose $2k of Pell).
Whether or not it affects your financial aid, it’s not a good idea. You’d be responsible for the taxes, home insurance, etc., as Thumper pointed out. If someone were injured on the property, you could be liable, not your mom. If the mortgage is defaulted on, it affects your credit, not hers. I wouldn’t do it; I’m not even sure you can do it unless she pays cash because I don’t see how you can get a mortgage.
@austinmshauri for fafsa purposes, the parent primary residence is not counted…at all…as an asset.
To be honest, I’m not sure about what happens if this is held on the student’s name. It’s still thei primary residence of the student. But really, most dependent students do NOT have houses in their names. They just don’t.
To the OP…how exactly does your mom plan to do this…but more important…why?
Also, just curious…you live in CA…where in CA can you buy even a “small home” that is valued at $35,000?
Thanks @Thumper. I didn’t think the parents’ primary residence was counted. It would be interesting to learn if homes owned by teens/young adults are counted.
I also think the OP is confused about the value of the home and the down payment… Is the entire value of the home $35000, or is that the down payment? If she’s buying it outright, is it habitable? If $35k is the down payment, no lender will put it in your name alone since you have no job to repay the mortgage.
how low is mom’s income? If it’s low enough, then your assets won’t count at all.
Why is your mom putting her purchased home in your name? For inheritance purpose? Is your mom not a citizen here, so she thinks the property needs to be in your name?
The mom’s primary residence (assuming the student lives with the mom) is never an asset for FAFSA purposes.
the student listed instate public universities in CA which require the FAFSA only.
Hoping the OP comes back and tells why this house needs to be in the student’s name.
@thumper1 The story is odd here. It sounds like the house will ONLY be in the child’s name.
I don’t know if because the mom “lives there” without owning it, makes it “not an asset” on FAFSA…
I don’t know what the FAFSA rule is for that.
@kelsmom What are the rules for that? House NOT owned by parents…only owned by student.
Its a mobile home this is why its 35k and we are currently renting an apartment but we are planning to move. But at the moment she cant purchase any large assets in her name due to ongoing court issues. I am still living with her and I am her dependent at the moment. Right now I am receiving the full pell grant since her income is around $20,000 a year. I’m just not sure if I do this I will lose my school aid.
If it is a titled mobile home, it is a vehicle and not a home. It is as if you own a $35k car. If it is affixed to land, it may be deeded as real estate.
I would strongly suggest this not happen. If your mom has ongoing court issues and someone determine she hid assets in your name (the mobile home), do you really want to be in the middle of that?
Also, if it’s in your name, it’s yours. Younaremthe ine who will be liable for this.
Also, unless your name is also on the mortgage (which would be less smart than just on the deed), YOU will be responsible for payment of the mortgage, real estate taxes, insurance, etc.
If your mom’s income is that low, and you either qualified for a means tested benefit like SNAP, or mom could file a 1040A or 1040 EZ, or mom was a dislocated worker, you would have an auto $0’EFC.
Now…if she buys real estate and that second qualifier is the 1040A or EZ, and she is then required to file the long form 1040, you would no longer be eligible for the auto $0 EFC unless you met one of the other criteria.
I’m sorry but I think this is a very poor idea. Your mom sounds like she is trying to hide assets of hers from someone else by putting this in your name. Bad idea! Bad. Tell her that you can’t jeopardize your need based aid. And let her figure out a better way to do this.