Cary and Jim Skinner want their kids to have “a place to land,” as Cary, 67, put it. So when their daughter needed a home after a divorce, the Texas couple lent her $200,000 for the down payment. They also cosigned her mortgage on a $1.05 million home. The loan dented their retirement savings for a while. Their daughter has since paid it all back, they said.
The Skinners have plenty of company. Nearly a quarter of first-time buyers got loans or gifts from family or friends for the down payment, a 2025 National Association of Realtors report found. High rates add to the pull. Wednesday's paper put the 30-year fixed mortgage at 7.4% this month, its highest in nearly three years. Friday's paper brought a small break, as Freddie Mac's weekly average fell to 7.32%. Terell Wright's Personal Journal piece walks through how parents can help without a family fight.
Three ways to help, three kinds of risk
A gift is the simplest. It should be money you can afford to lose. Each parent can give $19,000 per child a year without telling the IRS. Give more and you file Form 709. The extra comes off a lifetime estate and gift tax exemption of $15 million per person this year. Gifts can go sideways in a divorce, though. Without a prenup or loan papers, courts often treat down-payment cash as a gift to the couple and split the equity.
A loan keeps more control, if it's written down. A family loan over $10,000 must charge at least the minimum rate the IRS sets each month, or gift-tax rules kick in. Parents can forgive a loan later, but the forgiven part becomes a gift. Paul Ross, 60, a retiree in Wayne, N.J., and his wife made piggyback loans to two of their kids. They wrote a full mortgage for another daughter's $350,000 Delaware home in 2024. Ross said he wanted to “replace the bank” without letting the kids live beyond their means.
Cosigning keeps the least control. Miklos Ringbauer, who founded a California accounting firm, lays out the catch. A cosigner doesn't own the house and can't stop a sale unless added to the title as a co-borrower. If the child misses payments, the parents' credit can suffer. It's still more common than it used to be. Among buyers 25 to 34, the share with an older cosigner rose to 3.7% in 2022 from 1.6% in 1994, Freddie Mac says.
Our read
This is a Housing (M6) story with an Estate twist. Our read is that family help works when it's planned, and the plan starts with the parents' own retirement. The Skinners refilled their nest egg. Not every family can. Pick the route on purpose, then put it on paper to match. For families who avoid interest on faith grounds, the loan routes may not fit. The gift is the route in the piece that charges no interest.
Here's where it touches your money. Before you write the check, find the account it would come from. Ask what it's meant to pay for once you retire. If it's part of your retirement paycheck, give less, or lend it with a repayment plan like the Skinners' and put it in writing. If you've already lent money to a child, write a one-page note this week with the amount, the rate and the due dates. If it's over $10,000, look up the IRS minimum rate for the month you made the loan. Nobody shops for a roof in a rainstorm. If you'd like a second set of eyes on a family loan, bring the numbers and we'll go through them.