My wife's niece want to purchase a rental home that I have for sale by owner. It will appraise for more than I am selling it to

It depends on which lending program your wife's niece is using to purchase.. Lenders will require an "Identity of interest" form where they ask about the relationship between buyer and seller (arms length/non arms length)... .. This type of transaction is allowed, however the lender will limit the Loan to Value (LTV).. for FHA it's 85%, for conventional it's 80%... .. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

There is no restriction on sales to a family member. If your intention is to give her a gift of some of the equity in the home, you can do so. Simply execute a Contract to Buy and Sell Real Estate with her for an amount in excess of the price that you would offer it to her and write a letter stating that you are providing her with a gift of equity for the difference between the stated sales price and the price at which you would have offered it to her without this wrinkle. The Lender will accept that gift as the down payment under most circumstances so long as the home appraises for at least the sale price. Please be in touch should you need more information

There is no restriction on sales to a family member. If your intention is to give her a gift of some of the equity in the home, you can do so. Simply execute a Contract to Buy and Sell Real Estate with her for an amount in excess of the price that you would offer it to her and write a letter stating that you are providing her with a gift of equity for the difference between the stated sales price and the price at which you would have offered it to her without this wrinkle. The Lender will accept that gift as the down payment under most circumstances so long as the home appraises for at least the sale price. Please be in touch should you need more information

This would be seen as an indentity of interest transaction and the loan to value for the buyer would be limited to 85%. Depending on the value of the property, you can gift the required down payment if you have that much equity. I hope that helps.

FHA defines an "identity of interest" as any relationship where the purchaser and seller are related. When you have an identity of interest the buyer has to put down 15%. However, you can gift her the 15% equity to solve this issue. You can reach me at 303-521-7169 to run the numbers and see if it will work or not.