Renting to family member with owner-occupancy mortgage : personalfinance


Hi everyone,

Long story short my mom is currently living with me in my primary residence. It’s my house as in I am the sole mortgage (conventional) holder and title holder to the house. I bought the house in Nov 2019. If it helps I’m in Seattle, WA.

However I am getting married and will be moving to a different state in June 2022 due to my fiance’s continued education in another state. I do not want to sell my house because 1) I would like my mom to continue living here until she passes, as she speaks very limited English and does not know anyone outside of this neighborhood 2) I just bought my house recently and the price has not gone up enough for me to profit, and I would like to hold for at least 10 more years.

My mom will be paying me 50% of the mortgage directly and I will make the payment from my account. And I know there are a ton of concerns regarding drama over renting to family members, reasonably so, but both mom and I are capable of making payments (even 100%) for each other and I assume all responsibility on this front.

I mention the dates above to address the mortgage fraud concerns – there is an owner occupancy clause in my mortgage contract that says something along the lines of “I certify that I will move in within 60 days of closing and reside in the property for at least a year”. And I’ve been here for more than a year already, so I assume there won’t be issues on this front? Do I still need to talk to my lender and let them know that I will no longer be living in my house 100% of the time?

Also tax-wise I know I’ll be considered to be renting “below fair market value” and this would be considered “not for profit rental income”, and I won’t be entitled to certain deductions.

Is there anything else I should consider, or anything I am not understanding correctly? I just want to make sure I’m not doing anything illegal unintentionally. At this time I don’t care too much about profiting/tax benefits, I just care that I get to keep the house with my mom renting it even if I have to move away to another state.

Thank you in advance.



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